While overall car shopping traffic is still significantly down compared to previous years, we’re starting to see some positive signs that consumers are beginning to return to their car purchasing plans. Demand has started to return as consumers realize that they can still research and sometimes purchase that vehicle they need.
Here are some of the indicators we’re watching:
- Site traffic showed week over week improvements throughout April in almost all regions.
- Consumer behavior is indicating high-intent shopping: leads per user, VDP views per session, and time on site are all at or above pre-COVID levels
- As posted here earlier, a recent study we ran showed that 79% of US auto shoppers now expect to purchase later than they initially planned. However, most are just waiting for economic activity to resume: only 8% of those who were planning to buy this year have delayed their plans indefinitely.
There are two underlying factors driving this uptick:
- Most buyers are need-based: We know from our own research that around 2/3 of consumers buy a car out of need – and those needs aren’t going away. We expect to see that pent up demand in delayed purchases as we emerge out of lockdowns. Even among those delaying their purchase, 68% are currently actively researching.
- Most buyers research for over a month: Research (ours and others’) shows that most consumers spend on average a month to six weeks researching their vehicle purchase, so shoppers with intent to buy are doing the research now for future purchases, even during the COVID-19 crisis. Now is the time to nurture those customers and build your pipeline.
What happens next?
The biggest unknowns remain the timeline for this crisis and the overall lasting economic impact – both will dictate the pace of recovery, as well as how this increase in shopper behavior translates into car sales.
We do expect there to be changes in how consumers shop, though. For example, we’re already seeing signs of a greater acceptance of online purchasing: before the global health crisis, just 32% of US car buyers said they were open to buying a vehicle online. Now, 61% of buyers are open to the idea.
While we don’t want to downplay the impact COVID-19 is having on automotive, we’re encouraged by what we’re hearing from dealers about how they are adapting as well as by these early indicators of consumer interest. Stay tuned – we’ll continue diving into the data to keep you informed.