Home Contact Offices Alumni Client login Subscribe INDUSTRY EXPERTISE CONSULTING SERVICES INSIGHTS ABOUT CAREERS People and values What we do Client results Bain Alliance Ecosystem Social impact World Economic Forum Worldwide offices Press Contact us The future of car sales is omnichannel: customers shift between online, offline channels at least four times when shopping for a new car September 14, 2017 THE FUTURE OF CAR SALES IS OMNICHANNEL: CUSTOMERS SHIFT BETWEEN ONLINE, OFFLINE CHANNELS AT LEAST FOUR TIMES WHEN SHOPPING FOR A NEW CAR Car buyers are increasingly making key purchase decisions online Dealers remain pivotal, but their role is changing More than 25 percent of customers could become potential online buyers over the next years The future of car sales will depend on the seamless interaction between online and offline channels Munich/Zürich, 14 September 2017- Digitalization is also having radical consequences for car sales. Nearly half of all car buyers globally start the search for their next new car online. And even nearly two thirds decide on brand, model and price before visiting a dealer for the first time. The dealer only becomes important again in the end phase for test drives, final configuration and orders. All in all, customers typically shift between different online and offline channels at least four times during the purchase episode. These are the findings from the latest Bain & Company brief, The Future of Car Sales Is Omnichannel, which includes results from a survey of more than 5,000 car buyers in Germany, the UK, India, China, and the U.S. “Automakers and dealers must adjust to the changing expectations and needs of the digital natives, whose importance to the broad automobile market continues to grow,” explains Bain partner Dr. Klaus Stricker, co-author of the brief and head of the firm’s global Automotive Practice. "Enabling customers to seamlessly interact between digital and traditional channels requires enormous investments in omnichannel concepts." Automakers that adapt well may also reduce their sales and marketing costs. Bain estimates that up to a fifth of these costs can be cut with an integrated, seam¬less model. Major significance of personal recommendations Auto dealers will continue to play an important role for most car sales. Car buyers visit physical dealerships an average of 2.4 times throughout the buying experience. Most buyers still prefer to complete complex tasks, such as the vehicle’s final configuration, in person at the dealership. The Bain study also shows that the dealers generally score higher ratings for the configuration process versus auto websites or carmakers’ apps. Test drives are also an important benefit of physical dealerships: most buyers said they would not buy a car without driving it. But when it comes to gathering information, the situation is quite different. Of the respondents, 44 percent follow recommendations from their friends, family and colleagues on their purchase decisions. Another 30 percent of car buyers rely on online product reviews. And nearly two-thirds of all buyers have already decided on brand, model and price before visiting a dealership. For 26 percent of the respondents, the dealer still counts as the most trusted channel for their purchase decisions. “The enormous significance of personal recommendations for purchase decisions shows how essential it is for car brands to instill enthusiasm into their buyers and thereby gain and retain genuine promoters,” said Dr. Eric Zayer, Bain partner and co-author of the study. “A digital ecosystem of product information and offers creates regular points of contact for building up brand promoters over the long term.” Networking brand, dealer and customer Currently, only 2 percent of all car purchases are handled completely online. These buyers selected and customized their vehicle, signed their contracts and paid – all without visiting a dealer. Bain forecasts suggest that over the next several years, online buyers could grow to represent more than 25 percent of car consumers. To attune their distribution activities to the future, carmakers and dealers need to become active in five areas: Find new ways to appeal to buyers. Gaining a deeper understanding of customer preferences will make it possible to develop personalized and innovative features along the customer journey, such as virtual test drives. Manage channel boundaries effectively. Seamless interaction between app, website, social media and car dealer will ensure maximum brand experience, but only if the IT systems are connected. Build analytic capabilities. Evaluating dealer and vehicle data delivers valuable insight into customer trends and car usage. Bring buyers into the ecosystem. The omnichannel experience enables carmakers and dealers to remain in contact with customers for longer, and to more effectively embed them into their service networks via apps. Adapt the dealer network. As more customer episodes move online, dealer networks will see less use. New outlets such as showrooms in selected downtown locations will gain in significance. “Car sales of the future will link brands, dealers, and customers in an omnichannel experience and aim for greater brand loyalty while at the same time reducing costs,” said Stricker. “This is both a challenge and an opportunity. The other alternative is to lose ground in the face of competition for new customers.” Editor's note: For a copy of the report or to arrange an interview with Mr. Stricker, contact Aliza Medina at aliza.medina@bain.com. # # # About Bain & Company, Inc. Bain & Company is the management consulting firm that the world's business leaders come to when they want results. Bain advises clients on strategy, operations, information technology, organization, private equity, digital transformation and strategy, and mergers and acquisition, developing practical insights that clients act on and transferring skills that make change stick. The firm aligns its incentives with clients by linking its fees to their results. Bain clients have outperformed the stock market 4 to 1. Founded in 1973, Bain has 55 offices in 36 countries, and its deep expertise and client roster cross every industry and economic sector. For more information visit: www.bain.com. Follow us on Twitter @BainAlerts. Media contact Dan Pinkney, Senior Manager of Global Public Relations dan.pinkney@bain.com or +1 646 562 8102 All contact information FOLLOW US Facebook Twitter Linked In Bain Insights Our work focuses on helping companies deliver results. Visit our publications section, Bain Insights, for the best research and ideas from Bain's experts. Industry Expertise Consulting Services Publications About Bain Careers Subscribe Sitemap Terms of Use Privacy Policy © 1996-2017. Bain & Company CONNECT WITH US twitter facebook linkedin youtube