4-Minute Read

How to Compete With Online Car Retailers

December 15, 2020

Worried about online car retailers stealing your lunch money (and your customers)?

We don’t blame you.

Dealerships have spent the past decade watching customers flock to sites like Carvana and Vroom. Now, there’s a new contender to deal with: Carlotz.

Carlotz just went public this fall at a whopping $800 million valuation. And other established online retailers continue to rake in almost $4 billion in annual revenue.

We know what you’re thinking: “Is it even possible to compete against numbers like that?”

Absolutely. With the right strategies (and tools) in place, your dealership can even the playing field with these colossal companies.

How to compete with Online Car Retailers

1. Focus on Customer Experience & Transparency

A vehicle purchase is one of the biggest in a customer’s life. It makes sense that many customers are still uneasy about buying a new vehicle sight-unseen. 71% of car buyers still prefer to see a vehicle in-person before purchasing.

That gives your dealership a massive advantage over online car retailers. Customers can actually visit your lot to see that car they’ve had their eye on. Plus, your salespeople add a human element that these sites don’t offer.

That also means it’s on you and your team to deliver an unparalleled customer experience. 40% of customers are still unsatisfied with the car-buying process. Put them at ease by making it as quick and painless as possible.

Transparency is key here. Keep prices fair to both parties and work on streamlining your financing options. Your goal should be to have each customer’s paperwork completed in record time.

2. Optimize Your Inventory & Sourcing Strategies

Online retailers have limitless resources on their side. Your dealership will need to utilize powerful tools to keep up. Fortunately, there’s plenty of software platforms out there that can help.

Let’s start with the lifeblood of your dealership: inventory. New tools let you go beyond simple inventory management to actually optimize the way you stock new vehicles. Using these platforms, you can employ valuable insights from your inventory data to identify and stock more of your most profitable products.

Finding the right vehicles to stock is just the first step, however. You’ll also need to buy them at the right price to earn more on each sale.

Instead of searching for a separate tool, consider using an all-in-one platform that comes with built-in sourcing features. The best tools protect your margins by using real-time market data to find the best deals at auction.

3. Step Up Your Digital Advertising

Online retailers have a ton of online visibility. Their massive digital presence can certainly be intimidating to smaller dealers. But that doesn’t mean there aren’t plenty of ways to help your inventory stand against theirs online.

Start with strategies proven to help your inventory rank higher on 3rd party sites. These tactics put your vehicles in front of more buyers without the need to pay for premium listings.

It’s also never been easier to take control of your own direct digital advertising. Using a programmatic advertising tool, you can win the battle for online visibility with custom ads created for individual buyers.

4. Bring the Buying Process Online

Make sure your dealer website is optimized for mobile It’s obvious what drives customers to online car retailers: convenience. After all, it doesn’t get much easier than shopping for a new vehicle on your smartphone or laptop.

You’ll need to make the buying process as painless as possible to cater to today’s digital shoppers. The simplest way to do that is by bringing as much of it online as possible.

Start by optimizing your dealership website. Buyers will expect your site to be just as user-friendly as online retailers. Be sure to make search and navigation easy to meet their standards.

Then, showcase your inventory by turning your website into a digital showroom. Make to include high-quality photos and videos. 60% of car buyers say a vehicle video tour would bring them into a dealership.

And remember, the more steps customers can complete online, the more likely they are to visit your dealership. Use tools like Roadster.com to offer appraisals on trade-ins and pre-approval options for financing directly through your website.

5. Online Offer Home Vehicle Delivery

The pandemic has created new demand for contactless services. That includes things like test-drives and personal dealership appointments.

But one that stands out most is home vehicle delivery.

61% of recent car buyers say they want their new car delivered. And dealers who offer this service have seen a whopping 30% increase in new contacts. This is a simple way to offer additional value to buyers interested in purchasing online.

6. Promote Dealership Exclusives

Today’s shoppers are on the hunt for a good deal. Your dealership can poach customers from online retailers by selling on value instead of price.

Here’s what we mean: let’s say a customer has spent hours searching for a new Subaru Forester. They finally manage to narrow it down to two choices: one for $20,000 through Vroom and another from your dealership for $21,000.

It might seem like Vroom’s car is the better buy. But you have something they don’t — dealership exclusives. Your Forester comes with a 3-year warranty, 6 months of free service, and $1,000 worth of reconditioning.

That makes your vehicle the better value. Communicate your inventory’s authentic value across in-person and online channels to win these deals.

Stay competitive in today’s digital landscape with an all-in-one digital dealership platform

Online automotive retailers are here to stay. But that doesn’t mean dealers can’t fight back.

The right tools act as your dealership’s sling in the David and Goliath battle with online retailers. So, exactly how many tools do you need to outmaneuver these giant retailers?

Just one.

VinCue’s all-in-one dealership platform comes with everything you need to drive sales and profits for your business. Its comprehensive features work together to help you stand out in today’s crowded retail landscape.

Ready to bring the fight to online retailers? Schedule your VinCue demo today.