Report: More New Car Sales Leads to be Generated Online by 2020


By 2020, nearly 60 to 70 percent of new car sales leads will be generated via websites, mobile sites, social media, or apps, says a new report released by Frost & Sullivan, a business-consulting firm with offices in Farmington Hills.

As a result of high real estate costs, expensive resources, and the need for innovation, dealerships have decreased their brick and mortar space by about 20 percent and increased digital interaction with customers. The trend has led to the introduction of innovative sales strategies such as digital showrooms — a location where car models are presented virtually, says Julia Saini, Frost & Sullivan’s director of growth consulting for automotive and transportation.

“Better quality leads and easier follow-ups through integrated social media strategy define the success of digital showrooms,” Saini says. “By 2016, automakers are expected to open more than 100 digital showroom and lifestyle stores globally specifically aimed at enhancing both the retail and brand experience with limited on-floor physical inventory.”

The use of digitization in car retailing has led to the introduction of new and additional performance indicators. Brand awareness, digital engagement of customers, customer age, lead response time, and vehicle satisfaction will be of increasing importance in future digital retail formats, Saini says.

European and North American OEMs and dealers are expected to invest between $500 million and $5 billion in updating store technology and training staff. Soft digitization technologies such as digital tools, signage, and kiosks are anticipated to grow strongly in the short term, says the report.

Still, recent buying trends from Foresight Research in Rochester show baby boomers, or buyers 55 and older, made up 47 percent of new car buyers in 2012, up from 33 percent in 2009.