Online Shopper: New Car Intenders
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- Oswald Davidson
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1 Online Shopper: New Car Intenders Market Intelligence Highlights h
2 Background Objectives To determine: How consumers shop online when researching for their next automotive purchase Value of different types of automotive information online Amount of time spent shopping online prior to dealership visit What type of information consumers seek When certain types of information are most valuable to the shoppers Sample Size (New Car Intenders) 2010 N = N = 571 2
3 3
4 Consumers Further Delay Purchase in 2011 Average 2011 Average Months New Intenders 5.9 Months Months CPO Intenders 5.6 Months Used Intenders 4.7 Months 13% 14% 18% 15% 19% 17% 14% 16% 13% 20% 14% % 10% 10% Next week Next 2-3 weeks Next month Next 2-3 months Next 4-6 months Next 7-12 months 12 months + 4 BASE: New and Used Car Intenders Q: When do you plan on purchasing or leasing your next vehicle?
5 Shoppers Plan to Keep Next Vehicle Longer Last Vehicle Purchase Years Plan to Keep Next New Vehicle Purchase Years Q: When was the last time you purchased a vehicle? Q: How long do you plan to keep the next vehicle you purchase?
6 Over Half Plan to Trade-in Current Vehicle at a Dealership 56% Plan to trade-in vehicle at a dealership 19% Plan to sell their vehicle 17% Plan to keep their vehicle 6 Q: Are you planning to trade-in your existing vehicle at a dealership? 6% Plan to do something else with vehicle 2% Do not have a car
7 Decision on Specific Make/Model/Mileage for Next Vehicle Yet to Be Made Stage in Shopping Process Ready to buy, decided on make/model, 19% Ready to buy, not decided on make/model, 23% Just looking, not ready to buy, 58% Vehicle price (66%) Category/ type (62%) I ve decided mostly on the price and type of vehicle I m going to buy Make (38%) Mileage (34%) Model (26%) 7 Q: Which statement best describes where you are in the vehicle shopping process? Q: Which of the following decisions, if any, have you made a...
8 Average Time Spent Researching & Shopping Online For A New Vehicle Are Extended Average Time Spent Researching Next Vehicle Months Average Time Expected to Spend Online Shopping Hours Average Time Expected to Spend At Dealership Hours Q: How long have you been researching for your next vehicle? Q: Please select the statement below that best describes the total amount of time you expect to spend shopping for your next vehicle online. Q: Please select the statement below that best describes the total amount of time you expect to spend shopping for your next vehicle at a dealership.
9 Over Half View Inventory Online Along with Using Multiple utpestes Sites Activities Shoppers Plan On Before Visiting Dealership View inventory online Visit manufacturer website 60% 67% Itemized, exact, vehicle equipment listing for each vehicle in current inventory Pictures of actual vehicles that are currently available (not stock photos) Visit dealer website Visit 3rd party website 54% 51% Find reviews about dealer online Request an online quote from dealer's website Request an online quote from 3rd party Review/participate in internet discussion board Other 15% 10% 8% 30% 27% 9 Significantly lower than 2010 at the 95% confidence level. Q: What online activities did you do or do you plan to do before actually visiting a dealership?
10 10
11 Shoppers Want to Be Informed Before Visiting a Dealership 91% Search for a vehicle that meets their needs before proceeding to locate a dealer 43% Prefer to obtain Detailed vehicle info Vehicle pricing Then proceed to dealership 11 Q: When shopping for a vehicle which of the following are you more likely to do? Q: When I shop for my vehicle online my goal is to obtain
12 Shoppers Are Going to Multiple Sites to Search Inventory, Compare Dealerships, Find the Best Deal, and Conduct Research Avg. # of Dealer Websites Used to Conduct Research For New Vehicle Q: How many different dealer web sites have you or do you plan to use to conduct research on your vehicle? Q: What are the reasons why you decided to use more than one dealer web site to conduct your research?
13 Shoppers Find Dealer Websites Valuable to Vehicle Shopping Process 70% 20% 10% 13 Q: How valuable are dealer web sites to your shopping/buying process? (scale: very/somewhat valuable, neutral, somewhat not/not at all valuable)
14 Traditional Price Quotes are Preferred by Nearly a Third of Shoppers 30% Prefer to obtain Detail vehicle info Vehicle pricing Request price quote Then proceed to dealership 14 Q: When I shop for my vehicle online my goal is to obtain
15 The Primary Reason For Submitting a Price Quote Request Was to Compare Multiple Quotes Reasons For Submitting or Planning to Submit a Price Quote Request From Dealer Website (N=155) Reasons For NOT Submitting or Planning to Submit a Price Quote Request From Dealer Website (N=382) Quota comparisons To decide if the dealer is reasonable or overpriced Have an estimate of how much the car will cost 60% 74% 68% Prefer to go to dealership & negotiate in person Don't want to be contacted by the dealerships Don't trust online price quotes 18% 39% 62% Convenient and saves time 47% Undecided on type of car 13% Comparison to what the sticker price is 47% Bad experience with a previous price quote request 7% Help choose choose a dealer 49% Price quote request from dealers don't include a vehicle price 6% Other 6% Not convenient 3% 15 Q: Why have you submitted or plan to submit a request for a price quote on a vehicle from a dealer s web site? Q: Why have you not submitted or do not plan to submit a request for a price quote from a dealer s web site?
16 Inventory Details and Photos Are Very Valuable to Shoppers on Dealer Websites Very valuable Itemized, exact, vehicle equipment listing for each vehicle in current inventory Pictures of actual vehicles that are currently available (not stock photos) Valuable Trade in policies 7.6 Kelley Blue Book values on a dealer's web site Industry reviews on each model 7.5 Dealer specials/incentives 'Build your car' configurator Ability to check the value of your trade in Somewhat valuable Providing specific condition photos/details of pre owned vehicles Appearance of KBB logo signifying dealer is a participating KBB dealership Videos of actual vehicles that are currently available (not stock videos) 6.1 Contact information for dealership staff Special event (customer appreciation) Not as valuable Map to dealership Dealer amenities (e.g. customer lounge, shuttle service, etc.) 4.3 Consumer reviews and ratings from prior dealership customers degree view of inside of the dealership. 3.5 Financing options. 3.3 Instantchat with a salesperson Photos of dealership staff Q: On a scale of 1 to 10, how valuable are each of the following features on a dealership's web site to your decision to purchase from that dealership?
17 Non-Stock Vehicle Photos Drive Consumers to Dealership Likelihood of Doing the Following if Consumers Were Able to View Non Stock Photos of Vehicles % Much/Somewhat More Likely on a 5 Point Scale Go to a dealership 76% Average Number of Photos Consumers Would Like to See on a Dealer s Website 18 Purchase the vehicle from a dealership Call or e mail a dealership Submit a price quote request to a dealership 41% 51% 61% 17 Q: When searching for your next vehicle, is it important for you to see pictures of each of the following on a dealer s web site? Please select the pictures below that are important for you to see on a dealer's web site. Q: When searching for your next vehicle, if you were able to view a picture of an actual vehicle that is currently available at a dealership (not stock pictures that manufacturers provide), what effect would it have on your likelihood to do each of the following activities?
18 Specific Interior & Exterior Photos Most Important to Over 60% of Shoppers 1 Full body view 18 Q: When searching for your next vehicle, is it important for you to see pictures of each of the following on a dealer s web site? Please select the pictures below that are important for you to see on a dealer's web site. DETAILS IN APPENDIX
19 Top 3 Ad Components Dealer Must Have Are Inventory, Specific Specials, and Dealership Address & Phone Number 28% Dealer sales event 63% 26% Operational hours 56% 25% Financing offers 47% 14% New vehicle arrivals 23% 19 Significantly higher than 2010 at the 95% confidence level. Q: Thinking about online ads for dealerships, please select the top 3 things you would like to see in a dealership ad.
20 Most Consumers Prefer to Interact With a Dealer in Person Prefer to contact t Dealer Among a small percentage of those who did not want to contact a dealer (3%) 45% are more willing to contact a Dealer if their personal info was protected by a 3rd Party* 20 Q: In which of the following ways would you prefer to contact a dealer? *Q: Would you be more likely to contact a dealer if your personal contact information was protected from the dealership by a trusted third party? (N=14)
21 Customer Expectations Continue to Rise 49% of consumers saying they would like a response from a Dealer within 3 hours after initial ta contact Most Important When Calling a Dealer Responds with accurate information Able to speak to a salesperson directly 23% 28% No sales tactics 21% Phone call is directed to the correct person 19% Quick response 5% Short wait time 4% 21 Q: How soon would you want to be in touch with a dealer? Q: What is most important to you when calling a dealership for information? (N=166)
22 22
23 Ease of Negotiation & Dealer Price Quote Are Influential in Choosing a Dealership Be Transparent Top Factors Influencing Choice of Dealership % Very Important on a 5 Point Scale Ease of negotiation 68% Dealer price quote 68% Selection of vehicles 66% Dealer reputation 63% Staff professionalism/knowledge Providing detailed product information/specifications Dealer specials/incentives 63% 59% 53% 23 Q: How important would each of the following be to your decision to purchase a vehicle from a specific dealership? DETAILS IN APPENDIX
24 26% of Shoppers Were Planning to Purchase From the Same Dealership They Have Purchased From Before Planning to Purchase From Same Dealership From Which Respondent Has Purchased Fromin the Past* Yes No 26% 25% Reasons for Purchasing From Same Dealer Reasons for NOT Purchasing From Same Dealer 24 Familiarity with the dealer Convenienceof of the location Dealership service Dealership staff Ease of negotiation Dealer reputation Wide selection of vehicles Other 10% 31% 44% 57% 56% 52% 49% 65% Looking for a different Make/Model Inconvenience of the location Dissatisfaction with previous transaction Difficulty of negotiation Dealership is no longer in business Dealership service Dealership staff Dealer reputation Small selection of vehicles Never purchased from a dealer before Unfamiliar with the dealer *Data not shown. Answer option - Maybe = 49% Q: Are you planning to purchase your next vehicle from a dealership you have purchased or leased from before? Q: What are some of the reasons why you are planning to purchase or lease your next vehicle from the a dealership you have bought from before? Q: What are some of the reasons why you are not planning to purchase or lease your next vehicle from a dealership you have bought from before? Other 29% 39% 16% 12% 12% Will purchase from dealer that offers best 10% deal 9% No longer reside near previous dealer. 6% CARMAX does not have 5% new cars Dealer sold me a lemon 2% Tired of dealing with 1% Crooks 20%
25 Shoppers Are Unlikely to Complete a Vehicle Transaction by Phone, , or Online Likelihood to Use Full Service Transaction Via Phone/Mail/Online 47% 20% 33% Unlikely Neutral Likely Willing to Pay a Flat Fee For Service 69% 25% 6% No Maybe Yes 25 Q: If a dealer offered a service to complete the entire vehicle purchase or lease transaction by phone/ /online, and have the vehicle delivered to you, how likely would you be to use this service? (Scale: Very likely, somewhat likely, neutral, somewhat unlikely, very unlikely) Q: Would you be willing to pay an extra flat rate for this service? (Among those likely/neutral to use transaction N=302)
26 Summary 26 Shopper Mindset KBB.com visitors are further delaying their plans to purchase a vehicle by one month in 2011 (from 4.1 months in 2010 to 5.3 months on average) and plan on keeping their next vehicle longer. They plan to spend more time researching (2.5 months) and shopping online (13 hours) for their next vehicle upfront, so they can spend less time at the dealership (3 hours). 56% of visitors plan to trade in their current vehicle, while one third plan to either sell or keep their vehicle. 81% of consumers are undecided on the make or model they plan to purchase next, but have narrowed down the category and price range they are willing to pay. Before visiting a dealership, more than half of shoppers are, or plan on, viewing inventory online and visiting multiple (manufacturer, dealer, and 3 rd party) web sites. New Vehicle Shopping Process 91% of shoppers search for a vehicle that meets their needs before locating a dealer. 43% of consumers prefer to eliminate the price quote request out of the vehicle shopping process, while 30% prefer the traditional process which includes a price quote. Consumers generally submit a price quote in order to compare multiple quotes. Consumers plan to use an average of 10 dealer web sites to conduct research for their next vehicle (compared to 6 sites in 2010). 70% of visitors find dealer web sites valuable to the vehicle shopping process. Exact vehicle listing (details of specific vehicle on lot) and non stock photos (similar to used car listings) are most valuable to consumers. Non stock photos would most likely draw consumers to a dealership, purchase from a dealership or phone/ contact with a dealership. Consumers prefer to see as many non stock photos of vehicles they are considering as possible (average = 18). Most consumers (62%) prefer to interact with dealers in person, but are also open to (36%) and phone (29%) as well. 49% of consumers expect a response from a dealer within 3 hours after they have contacted the dealer. Purchase Process When choosing a dealership, ease of negotiation and selection of vehicles are the most important factors to consumers. One quarter of shoppers plan to purchase from the same dealership they have purchased before since they are familiar with the dealer. 47% are unlikely to complete a vehicle transaction by phone, e mail or online they still see the dealership as a very important part of the vehicle purchase process.
27 27 APPENDIX
28 Consideration of Pre-Owned Vehicles Regardless of CPO Status More Than Doubled From Q to Q Consideration of Pre Owned Vehicles Q Q Q % 44% 43% 32% 35% 28% 25% 21% 15% I would consider pre owned only if part of CPO program I would consider pre owned whether or not it was CPO I would not consider pre owned 28 Q: How would you best describe your opinion about pre-owned vehicles?
29 For Over 6-in-10 It s Important to See Specific Interior & Exterior Photos Full body view 99% Front grill 53% Driver interior 95% Sound system 51% Engine 93% Gear shifts 51% Dashboard 85% Odometer 50% Passenger interior 71% Tailpipes 48% Rear seat room 68% Head room 47% Gauges 66% Interior door panels 44% Rear exterior view 66% Front headlights 42% Front exterior view 66% Front ¾ view 42% Side exterior view 65% Rear headlights 39% Console 61% Power window switches 38% Exterior features (e.g. sunroof, 61% Ventilation system 38% Trunk space 59% Towing features 35% Interior features (e.g. navigation 56% Cup holders 34% Steering wheel 55% Truck bed 29% Interior ergonomics 53% Gas tank 28% Wheels 53% Door handles 23% 29 Q: When searching for your next vehicle, is it important for you to see pictures of each of the following on a dealer s web site? Please select the pictures below that are important for you to see on a dealer's web site.
30 Ease of Negotiation & Dealer Price Quote Are Influential in Choosing a Dealership Top Factors Influencing Choice of Dealership % Very Important on a 5 Point Scale Ease of negotiation 68% Guaranteed trade in 36% Dealer price quote 68% Seeing the same value on Kbb.com 35% Selection of vehicles 66% Financing options 33% Dealer reputation 63% Providing background product 28% Staff professionalism/knowledge Providing detailed product information/specifications 63% 59% Kelley Blue Book values on the Convenience of the location 26% 24% Dealer specials/incentives 53% Familiarity with the dealer 24% Dealer response time 49% Kelley Blue Book branding/logo on 22% Guaranteed vehicle pricing below Kelley Blue Book values 39% Dealer amenities 22% Trade in policies 38% Referral from friends/family 21% 30 Q: How important would each of the following be to your decision to purchase a vehicle from a specific dealership?
31 On Average, Consumers Felt That $1,527 Was a Fair Profit Per Vehicle For Dealers Fair Profit for Dealers Per Vehicle $1,527 Average Actual Profit Per Vehicle*: New: $1,371 Used:$2, *Source: 2010 NADA Data Q: Recognizing that dealers have to make money to stay in business, what do you feel is a fair profit for them to make per vehicle?
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