The motto for online auto shopping could very well be "Here Today, Here
Tomorrow." If there is one thing that analysts and writers agree on when
it comes to shopping for cars online, it is that the online car shopping experience
is a force to be reckoned with and is only going to get better. A lot better.
Or is it?
To be sure, car shopping has evolved. More and more consumers now use the Internet
to make smarter purchasing decisions. Smart sellers use it to better meet customer
needs. And value chain providers, from vehicle history services to insurance
companies, employ the Web to make the buyer-seller trip more enjoyable, every
step of the way.
Understanding the evolution of online car shopping-both the technology and
the behavior-can enable your credit union to offer a more meaningful member
service experience, not to mention generate more car loans.
Back in the Day
Online shopping is a new phenomenon, of course, with the briefest of track records.
Prior to the Web, we did our research the old fashioned way: we read car magazines
and books, talked to our friends and neighbors, visited show rooms, kicked tires.
But by now the trend is obvious. In 1999, 40% of new car shoppers used the
Internet while only 26% of used car shoppers used it (with 2.7% of shoppers
actually making their purchase over the Internet). By 2000, 54% of new car shoppers
and 30% of used car shoppers used the Web. Two years later, the numbers jumped
again, with 60% of new car and 47% of used car shoppers doing their research
Clearly, online shopping is here to stay.
Are We There Yet?
Unfortunately, it's just as clear that all car shopping online experiences are
not equal. In fact, some are downright poor.
The Wall Street Journal's "Cranky Consumer" column by Eileen P. Gunn
recently evaluated five leading online car shopping services and found disparities
in service and usage. That said, the Gunn still recognizes the power of the
Web to generate car sales and even cites a dealer who claims ൜% to 25%
of his dealership's sales" are the direct result of customers seeking a
If online car shopping is here to stay, why can't we get it right?
I think we can and we will. But what's missing today from many sites is an
appreciation of what I call the Online Auto Buying Funnel. This "funnel"
addresses three online shopping stages: Awareness, Consideration and Purchase.
What, Why, Where
The technological contribution to the Awareness phase first occurred circa 1998
with the online introduction of basic vehicle specs and photos in a static format.
Awareness in the behavioral half of the funnel is best represented by the simple
question: "What are my choices?"
Around 2000, technology and data providers introduced the Consideration stage,
empowering shoppers with more tools, such as side-by-side comparisons, vehicle
configurations, advanced searching capability and richer content. These tools
helped shoppers to answer their second critical purchasing question: "Why
And by 2002, technology was able to take the shopper even further down the
funnel, by offering dealer locator and vehicle locator tools. From the sales
half of the funnel, this answered the key "action" question: "Where
can I find it?"
Today, the most successful sites offer a dynamic consumer-centric sales process
that enables the shopper to remain in control of his or her purchasing decision.
To a credit union, this means providing all of the tools necessary for members
to do their research.
Driving through the Funnel
Why does it help to view online car shopping as a funnel? The answer lies in
how well your credit union helps its own members make their next vehicle purchase.
Here are several ways to ensure your members enter the funnel and exit with
Stage 1 - Awareness
- Place your credit union at the beginning of each member's research phase
- Provide members with the service they need to make an informed decision
- Market this valuable service to them
- Educate them on using the Web to their advantage
Stage 2 - Consideration
- Make sure they trust the information you're providing
- Give them tools to leverage the information
- Let them fully research and compare vehicles
- Offer one-stop shopping
Stage 3 - Purchase
- Offer real inventory from your local dealers
- Provide online financing options
- Make it easy, make it fast
You Can't Go Home Again
Yes, shoppers will still want to kick tires, touch upholstery, take it for a
spin. But there's no going back. Internet classifieds will ultimately outnumber
print classifieds, if they don't already. Technology will appear more and more
seamless. Accurate, complete vehicle content will be expected and, therefore,
required. In short, your members will be doing more and more of their shopping
online. That's the inevitable part. The profitable part is up to you.
Chrome Systems, Inc. pioneered the technology behind electronic vehicle configuration
close to 20 years ago and continues to lead the industry. Today, Chrome's complete
and accurate vehicle descriptions and prices facilitate online loan origination
and enable lenders to better understand the true value of their collateral.
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