Changes in customer behavior have dramatically reduced the number of dealership visits before purchasing a car. Customers now do extensive online research ahead of buying and expect a convenient, no-haggle shopping experience. This has prompted responses from automakers and dealerships. Some automakers are working to better connect the digital and in-person shopping experience, while others are pursuing more direct online sales. Third parties are also entering the market with digital platforms that facilitate research, fixed pricing, and limited dealer negotiation. As customer preferences continue shifting online, new digital dealership models may emerge to seamlessly guide the evolving automotive purchasing journey.

1. Changes in Customer Behavior
Online Research to Dealership Visits

4. Multiple visits to a series of dealers are out, while the trend of consumers doing more
advanced research ahead of buying a car is in.
"This is the most dramatic change we've
seen in the auto industry and how people
buy cars in the last 50 years"
Hans-Werner Kaas, McKinsey's senior partner
5+ visits
1 Visit
10 years ago
2013 Present
Dealership visits before
purchase.

5. Many Canadian are more comfortable
and expect to do much of their research
and shopping online. Millennials entering
the market and expect a different
experience.
B2C Ecommerce Growth:
2012: 18.6 Billon
2015: 29.6 Billon (projected)
1. Online (Shopping)
Customer are looking to save money,
save time and self serve quickly online.
Much of this behavior is driven by how
they shop in other verticals.
2. Customer Needs 3. Customer Perception
How a dealer would like to be
perceived
How a dealer is commonly
perceived
Customers are looking for a no-haggle
shopping experience coupled with
reduce need to physically visit a dealer.
Again, much of this behavior is driven by
how they shop in other verticals. Online
auction, reverse auction, online offers
and variations, price comparisons, offers
comparisons online and research on
done online.
Why the change in behavior?

6. Market Response to Change in Customer Behavior
1. OEM - Dealership Re-envisioning
2. 3rd Party Digital Disruption
3. OEM - Drive to connect Digital to the Dealership Journey
4. Do nothing

7. OEM Dealership Re-envisioning

8. 3rd Party Digital Disruption
“Excellent program. I saved more than if I was
on my own, and I did not have to haggle.”
– C. C., Hollywood, FL
No to haggling. I like the stated Tesla model. I
will lose faith in the pricing if haggling occurs.
- William13 (online forum)
The last two cars I bought were from Fixed
Price dealerships, and it completely changed
the experience for the better. I intend to buy
that way from here on out.
- Mittar (online forum)
1. Consolidated Research & Build Options
2. Defined Discounts
3. No Haggling
4. Connection to Dealer Through Online Experience
1. Consolidated Research & Build Options
2. Reverse Auction (Dealers do the work)
3. No or limited haggling
4. Connection to Dealer Through Online Experience
“It's a great way to avoid unwanted
Negotiations at dealerships and receive the
most competitive pricing from the start"
- David Palazzo
1. OEM to Consumer Direct
2. Fixed price (next person pays the same)
3. No Haggling
4. Online Ordering and Dealership Advice
Channeling an Apple Store / purchase experience.

9. OEMs to connect Digital to the Dealership Journey
1. Digital is key to driving premium perception.
2. Digital channels dominate the purchasing “journey.”
3. Digital customers demand seamless integration.
1. Integrate digital into every aspect of the customer journey
2. Create seamless sales experience from the online interactions
3. deep and rich customer experience
Brands have begun to follow the
“experience centre” model.

10. Emerging Opportunities

11. Emerging Opportunities
Automotive customer journey

12. Digital Dealerships
Guiding Principals
1. Innovate to get ahead of the competition / customer behavior
2. Keep dealers in business
• Digital to facilitate more of the customer journey
• Connect the digital(consumer) and dealership(dealer)
• Answer the demand for haggle-free shopping
• Change Perceptions - Dealers more approachable

13. Private