I had a very interesting conversation with a friend the other day that confirmed my beliefs about online car shopping. We were discussing how people use the internet when they're ready to buy a car. He mentioned that he had just purchased a car and how the internet helped a lot with the process. In fact, he said it was "Great!"
I wanted to find out more. Everything I've read about internet car shopping has pointed to inherent weaknesses, frustration and the proverbial 'run-around'. A recent industry survey found that 3 out of 4 car buyers had said that the process was unsatisfying. Polk, J.D. Power and others have found that online car shoppers are looking for several key pieces of information; Inventory, Price and Response. Seems reasonable enough.
Back to my friend. He went on to tell me about how he had first gone to one of the big "research" sites to find out more about his selections. Like most buyers, he had already narrowed his search to 2 vehicles. So after learning more about trim, options, MPG etc he settled on the Honda Pilot. He then visited one of the big "buying" sites to get a fast, free quote. He entered his contact information and hit 'submit'. While waiting for the fast, free quotes, he decided to visit the local Honda dealer's website. Then another, after all there was inventory to browse, video test-drives and moving images!
After just a few hours he received roughly 13 emails from 3 different dealers. The first several were auto-responses acknowledging his request. He never did get his fast, free quotes but each email promised that he would be contacted as soon as possible to determine:
1. The kind of car he wanted
2. What’s available
3. Schedule a test drive
4. Work up the price
5. Discuss finance options
Sure enough, the phone began to ring, despite the fact that he expressly indicated that his preferred contact method was email. He talked with 2 of the 3 dealers and decided to visit the dealer closest to his home. He was assured they had the color he wanted and the price would be great. So he went to the dealer, negotiated a price and bought the car.
How did the internet help? Why was this experience acceptable? If he were buying a camcorder would he accept this? I think not. Imagine having to go through this process to get a price and availability for a camcorder or a TV.
The bar has been lowered to the point where it is considered a 'good experience' to not get a simple price on a car without having to first speak to a salesperson. Virtually every other industry has responded to consumer expectations and has embraced the inherent benefits offered by the internet to improve the buying experience. From consumer electronics to insurance to real estate, the internet offers transparency, selection, anonymity, and research. And sales have not declined as a result of this consumer empowerment, in fact they have increased.
So why hasn't the car business done the same?