Throughout the pandemic, CarGurus has kept a pulse on consumer sentiment around car shopping through its Covid Sentiment Study. The Q3 edition, which surveyed 600 US consumers in July, found good news for dealers: consumer confidence is up 17 percentage points among respondents. Seven in ten (69%) say the pandemic did not negatively impact their ability to afford a vehicle today, vs. just five in ten (52%) in June 2020.
However, the pandemic continues to have a lasting impact on the industry, shaping attitudes around car shopping. Below, we explore which trends are temporary and which are here to stay.
While the pandemic caused a huge industry-wide disruption in 2020, we’ve seen shopper demand for vehicles bounce back quickly and consumer confidence return with decreased spending and stimulus. Despite the return in demand, most (58%) consumers are feeling the pinch of high vehicle prices, and many have had their buying experience disrupted by ongoing supply and demand issues. In fact, 30% of recent buyers said a vehicle they were planning to see in person was sold before they got there, while 31% of current shoppers said they delayed or pushed off shopping for a vehicle because prices were/are so high.
Overall, today’s shoppers are much more comfortable than last year with shopping in stores; however, many still expect dealers to provide a safe experience. Over half (51%) still expect dealership employees to wear face masks.
Since the start of Covid, use of shared transportation has taken a hit with consumers growing accustomed to relying on personal vehicles to replace these services. Only six in ten (59%) of previous users plan to resume their pre-pandemic activity with ride sharing and half with public transportation (47%) in the long term. Instead, more than a third (40%) expect to use their personal vehicles more overall going forward—up from 33% in 2020.
Just as vehicle usage has changed due to the pandemic, so have consumers’ preferences around shopping for a vehicle. Now more than ever, the majority of buyers (60%) would love to do more of the process from home for their next vehicle purchase. Still, some of the most popular contactless services, including dealership appointments and solo test drives, that arose from the pandemic are likely here to stay to accommodate those that do come into the dealership.
What can dealers do to adapt?
- Prioritize digital retail in your sales process. With most shoppers eager to do more of the process online, it’s important that dealers are equipped to handle these preferences. Implement digital retail products, such as Convert, to allow buyers to take the transaction online as far as they want – and make sure your staff is trained to handle this new online business.
- Test new ways of acquiring inventory. With demand up and the chip shortage continuing to impact inventory levels, you can’t rely on auctions to keep your inventory stocked anymore. Consider investing in technology that allows you to acquire in-demand vehicles more efficiently in your local market, and perfect your trade-in process to keep your supply of used vehicles up.
- Continue to provide a safe, convenient buying process. The dealership experience is crucial to winning more sales and many buyers expect contactless services to stick around long term. Continue to offer services like dealership appointments, solo and at-home test drives, and at-home delivery to ensure consumers feel comfortable buying at your dealership.
There’s no doubt that the current selling environment will continue to evolve as attitudes and preferences continue to change. But, by identifying processes and services that help you meet consumers’ expectations and increase convenience, you’re sure to get ahead.