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Role of the Internet in Vehicle Purchase Process. Report By Polk/Autotrader Feb 2011
1.
www.polk.com PolkView © 2011 R.
L. Polk & Co. All rights reserved. R. L. Polk & Co. makes no representations or warranties with respect to the contents hereof and specifi- cally disclaims all implied warranties of merchantability or fitness for a particular purpose. R. L. Polk & Co. reserves the right to make changes to this report without notice or obligation. Polk is a registered trademark of R. L. Polk & Co. FEBRUARY 2011 1 The Internet has become an increasingly important component of the vehicle purchase process. Consum- ers shopping for new and used vehicles can find a wealth of information and tools on auto manufacturer, dealer and third-party websites. How much time do consumers spend online during the vehicle purchase process? How does the Internet compare to other channels in terms of influencing purchase? Why do shoppers use the Internet? To answer these and related questions, Polk and AutoTrader.com recently teamed up to conduct a study of recent car buyers: 4,005 U.S. consumers who had purchased a new or used vehicle from a dealer- ship within the prior six months. The findings provide insights into the role, usage and perceived helpfulness of the Internet in the vehicle purchase process. Internet is Most Used and Influential Media For all vehicle buyers, the Internet is undoubtedly the most heavily used and the most influential channel. Today, seventy-one percent of consumers use the Internet while shopping for new and used vehicles, more than double the usage of any other information source. More importantly, the majority of buyers said the Internet was the most influential source leading to their purchase decision. (See Figure 1). In addition to being the most influential, the Internet is also seen as the most helpful information source. Two- thirds of consumers rated the Internet as “extremely helpful” (score of “9” or “10” on a 10-point scale). In comparison, only about one-half of used and new vehicle shoppers rated a referral from a friend or family as extremely helpful and other sources (e.g., TV, radio, direct mail) scored much lower. This study also revealed an interesting finding regard- ing the influence of social media sites: 97 percent of buyers who used the Internet to shop indicated that social media did not influence their vehicle purchase. More Time Spent on Third-Party Sites than on OEM, Dealer Sites For the first time, this research quantifies the length of the vehicle shopping process for consumers who use the web as part of the process. Used car buyers spend about 18 total hours, while new car buyers spend roughly 19 hours shopping for a new car or truck. For both groups, roughly 60 percent of that time is online, with the remainder spent visiting dealerships and engaging in other offline activities. Of the time online, consumers shopping for both new and used vehicles spend more time on third-party sites than on dealer or manufacturer sites: 7 hours for used vehicle buyers and 3.5 hours for new vehicle buyers. Both types of shoppers also visit dealer and automo- tive manufacturer websites; however, new vehicle buyers distribute their time more evenly across third- party, OEM and dealer websites. Given that 60 percent of the time spent shopping for a car takes place on the web, it is critical for websites to provide consumers with relevant content, information and tools to support their decision-making process. This is particularly important given the multitude of resources that the Internet makes available. Search engines are also commonly used during the vehicle shopping process, with Google being by far the most prevalent. New and used vehicle buyers primarily use search to access a dealer website, to find a dealer’s address or phone number or to access an automotive manufacturer’s site. About half of buyers who visited a dealer site arrived at the site via search. This indicates that shoppers use search engines as a convenient way of looking up a dealer after that dealer has become a part of their consideration set. continued The Role of the Internet in the New and Used Vehicle Purchase Process BRUCE GIFFIN Corporate Market Research Manager bruce_giffin@polk.com JOE RICHARDS Sr. Manager of Research Joseph.Richards@autotrader.com Figure 1: Most Influential Sources Leading to Vehicle Purchase “ ” Half of new vehicle buyers and 58 percent of used vehicle buyers said that the web was the most influential information source in their purchase decision. *TV, radio, direct mail, magazine, outdoor ads, and write-in answers NOTE: Based on the 71 percent of new and used car shoppers who used the Internet to shop for their vehicle. Q: Which media, if any, led you to the dealer you purchased from?
2.
www.polk.com PolkView © 2011 R.
L. Polk & Co. All rights reserved. R. L. Polk & Co. makes no representations or warranties with respect to the contents hereof and specifi- cally disclaims all implied warranties of merchantability or fitness for a particular purpose. R. L. Polk & Co. reserves the right to make changes to this report without notice or obligation. Polk is a registered trademark of R. L. Polk & Co. FEBRUARY 2011 2 Despite Heavy Internet Usage, Initial Contact with Dealer Occurs Offline According to the research, 67 percent of used vehicle buyers and 69 percent of new vehicle purchasers establish initial contact with the dealer by walking into the dealership. Given that the majority of buyers do not email or call the dealer in advance of their initial visit, it’s important for dealers to look beyond the number of phone calls and emails they receive to assess the true value of their advertising. The Internet Delivers Pricing Information and Ability to Compare To invest wisely in their online presence, it’s impor- tant that dealers, manufacturers and third-party sites understand how and why consumers use the Internet during the vehicle shopping process. About 45 percent of new and used vehicle buyers use the Internet to research vehicle pricing and to compare models across different makes. The ability to obtain information on special offers, dealer rebates and incentives was more important to new vehicle buyers (42 percent) than to used vehicle buyers (28 percent). (See Figure 2) Implications of the Automotive Buying Influence Study The Polk/AutoTrader.com Automotive Buying Influence Study has a number of implications for dealers and auto manufacturers: • Develop Internet strategies that deliver upon shop- per needs: We all recognize the influence of the Internet during the shopping process. The implica- tions to dealers and automotive manufacturers are clear: leverage the Internet to influence a shopper’s consideration set and create visibility for your brand. Give shoppers what they want (detailed vehicle information, accurate pricing, relevant content, abil- ity to compare vehicles) and promote your inventory and brand throughout the entire shopping process. • Make sure your SEO and marketing strategies are solid: Most shoppers use search to locate dealer and OEM sites. In many cases, they also use search as a Yellow Page-like service to locate the dealer phone number and/or address. It is therefore critical that dealers and OEMs effectively employ Search Engine Optimization strategies to drive customers to their sites. To make it easier for shoppers to find them, dealerships should also effectively market themselves on third-party websites. • Determine what drives walk-in traffic: Seven out of 10 shoppers don’t establish contact with the dealership prior to visiting it, indicating that dealers need to look beyond the number of phone calls and emails they receive and establish methods to assess which advertising sources were most influential in driving buyers into their dealerships. ABOUT POLK Polk is the premier provider of automotive information and marketing solutions. Polk collects and interprets global data, and provides extensive automotive business expertise to help customers understand their market position, identify trends, build brand loyalty, conquest new business and gain a competitive advantage. Polk helps automotive manufacturers and dealers, automotive aftermarket companies, finance and insurance companies, advertising agencies, media companies, consulting organizations, government agencies and market research firms make good business decisions. A privately held global firm, Polk is based in Southfield, MI with operations in Australia, Canada, China, France, Germany, Japan, Spain, the United Kingdom and the United States. For more information, please visit www.polk.com. “ ” Seven of the 11 hours spent researching used vehicles occurs on third-party sites. Figure 2: Why New and Used Vehicle Shoppers Use the Internet ABOUT AUTOTRADER.COM Atlanta-based AutoTrader.com, created in 1997, is the Internet’s ultimate automotive marketplace and consumer information website. AutoTrader.com aggregates in a single location millions of new cars, used cars and certified pre-owned cars from thousands of auto dealers and private sellers and is a leading online resource for auto dealers, individuals and manufacturers to advertise and market their vehicles to in-market shoppers. The company also provides a robust suite of software tools for dealers and manufacturers to help them manage and market their vehicle inventory and display advertising on the Internet. AutoTrader.com also owns used vehicle management software companies vAuto, HomeNet Automotive and Kelley Blue Book. About the Automotive Buying Influence Study The study contains findings from 4,005 U.S. respondents who purchased a new or used vehicle from a dealer. The study was conducted in September and October of 2010. Our research focused on U.S. vehicle buyers who purchased in the prior three months, but allowed participation of those who purchased in the prior six months. Quotas were set to ensure a representative sample based on the vehicle make purchased.
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