Sophus3 Whitepaper | The Digitalisation of Automotive Finance – Part 3

The Digitalisation of Automotive Finance

Part 3: The digital transformation of automotive retail

Tracking the digital auto consumer

It has become a commonplace to say that car purchase has moved online. Although the final transaction invariably takes place at a dealer showroom, the majority of the automotive consumer journey is now conducted digitally1“Driving Automotive Growth through Opportunities in the Digital World”, Accenture, 2015, p. 3. Prospective new car buyers research their choices, compile a shortlist, and, in most cases, decide on their first preference before even setting foot in a showroom.
Consumer studies show that, globally, more than 90% of car buyers use ‘digital’ within their research. The eDataXchange (eDX) project – which tracks visitor traffic across the websites of nearly all the automotive brands active in the European ‘Big 5’ Markets – gives a uniquely detailed insight into the digital automotive consumer’s behaviour and preferences as they go about that research2“eDataXchange (eDX) is the officially mandated digital market intelligence source for all the leading auto brands in the main European markets. eDX goes beyond simple benchmarking of volume of visits. It aggregates data across brands and highlights automotive specific KPIs to provide an in-depth and up-to-date perspective of an OEM’s performance vs the market and best-in-class performers.”

The long term trend over the life of the project shows how central the web has become to the car buyer with the number of visits recorded across the ‘Big 5’ (Germany, the UK, France, Italy and Spain) almost trebled in little over a decade.

In 2016 there were 1.09 billion visits to car brand sites equating to 99 unique visits for every car sold. (Whilst Autotrader reported that, in the UK for example, visits to dealerships had continued to decline – with 50% of customers visiting only the one dealer from whom they eventually bought their car.3

Digital auto consumer behaviour

The online consumer is in a hurry. Between commencing online research and buying a car the gap has shortened to between 4-6 weeks. The time between a first visit to a car brand site and any resulting test drive request averages just six days.

Visitors tracked across multiple sites consider an average of 4.2 brands (five years ago the average was just 2.5 brands). Brand loyalty has clearly declined; interest in ‘the deal’ appears to be paramount.

The ‘surfer-researcher’ is hungry for information and impatient to receive it. The average duration of a site visit is 2m 51sec, and just 4 pages of content are reviewed on each visit. More than a third of visitors ‘bounce’, i.e. leave the website immediately after viewing just a single page.

Only 21% of visitors ever return to that same car brand site within 90 days, meaning that more than ¾ of visitors do not return within the span of the average purchase cycle.

The online consumer’s primary interest is in product information. 52% of all site visits go to model pages describing the brand’s cars and their characteristics. 21% of visitors will look at a vehicle configurator – online functionality that allows them to choose equipment, colour, and trim combinations for an individual vehicle ready to be ordered.

It is worth noting that the online consumer’s preference for when and how they carry out research is completely out of sync with the ‘shop hours’ model of most car dealerships. Nine o’clock in the evening is when the digital audience peaks. Weekends are when people are most ‘engaged’ – they spend longer on sites and mine more information on a Sunday than they do at other times of the week.

One last and critical point about consumer preferences. The majority of visits to car brands’ digital platforms now take place on a mobile device, either a cellphone or tablet. In some markets, notably the UK, Italy, and Spain, only 40% of visitors view content via a ‘conventional’ desktop or laptop PC.  Information and interaction needs to ‘work’ within small screen real estate – that which does not is quickly rejected by the visitor.

Car brands get digital

After briefly toying with the idea that their websites could be generalist ‘infotainment’ platforms, engaging with a broader audience, repeatedly over a long period of time, car brands have now ‘gotten real’. Automotive companies have pared down their sites, seeking to meet the visibly unsentimental demands of the online consumer. Every detail is honed to decrease friction and avoid attrition, and each site is mapped and monitored so as to increase the efficiency of engagement touch points to maximise interaction and, ultimately, the generation of sales leads.

So  within this well worn online journey – how does finance fit in?  As we have seen, the finance ‘offer’ is now a key factor determining which car a buyer will ultimately choose. How well is that critical finance information integrated within all the other information consumers are interested in? In many cases the answer is ‘not well’. This essential function appears  to be peripheral to the way many brand’s present themselves.

But looking at many automotive websites, ‘finance’ seems to be an afterthought, assigned to the ‘fifth tab along’ in the site’s navigation and therefore placed firmly in the background. There are probably two reasons  for this. Firstly, because the question of how a buyer finances their car has always been seen as a second stage of the car purchase process which follows, sequentially, the all important purchase choice. In the showroom, the finance question ‘comes later’. Secondly, this is compounded by the operational separation of sales and finance functions within the automotive OEMS, which makes integration of information from separate sources more difficult.

Whatever the reasons, the shift to finance-driven sales means that ‘the deal’ (as in the monthly payments) may now be the first consideration of the consumer, or certainly one they will want to understand early in their consideration.  So integration of product and finance information across digital is vitally important to make sales.

When we look at what is already happening, even when finance information is not readily displayed or easily accessible, we find that users drawn to it are clearly more likely to be ‘in market’ for a car, and constitute that tiny part of the huge online audience which car brands should be most eager to identify and interact with.

Study shows increased engagement amongst 'finance' visitors

A brief eDX study carried out earlier this year of online journeys on car sites looked specifically at the outcomes when visitors went to finance related content compared to those who did not. The outcomes that we measured were the ‘completion’ of key engagement actions such as: fully configuring a car, downloading a brochure, searching for a dealer, or – the holy grail in the eyes of most car salespeople – requesting a test drive appointment.  

The percentages of online consumers carrying out any of these actions on a car manufacturer’s site are, as would be expected, very small indeed. For example, a miniscule .05% of all site visitors in the UK will actually complete and submit a request for a test drive. (This is not surprising, given that there are  nearly 100 visits per car purchase in the UK, and that people are visiting multiple sites and, simple probability tells us, that in the majority of cases they will go elsewhere).

However, these ‘engagement completions’ rise significantly amongst those who have accessed finance information – whether that is through a general ‘offers’ page, a model-specific finance example, or a fully functional finance calculator. The study, which was conducted in the UK market during January – a period of relatively high auto consumer activity in advance of the March registration peak – showed a rise in the number of completions in key areas, as the infographic shows.

The study supports the view that finance information is important to the ‘serious’ visitor – those who are taking time and care over their review of information, and accessing other content that suggests a higher propensity to purchase in the near future. It confirms also that finance information is of integral interest within the consumer journey, and that it is actively retrieved throughout that journey, not postponed to some later stage.

Crucially for car brands, visitors to finance information can be understood as a self-identifying subset of visitors who are more likely to be in-market, and who should therefore be prioritised within personalisation strategies

Coming soon:

The next part will review in detail how finance information is presented on car brand websites and will reveal the findings of an audit of 50 car brand sites carried out in August of this year.  >>