If you had asked the average punter this question a decade ago, you would not have been taken seriously. It’s different now. However, in a recent survey conducted in 8 major countries, 75% of consumers said that they would consider making their entire car-buying process online, including financing, price negotiation, back office paperwork and home delivery.1 Not surprisingly, these prospective buyers also want more tailored information online, more virtual demonstrations and more sites that provide an opportunity for comparison shopping.
This trend has obvious implications for car-makers and dealers, however, it also has implications for all high involvement consumer purchases. The traditional wisdom has been that real estate agents, financial institutions, and even luxury product retailers, all needed a storefront to enable prospective customers to engage face-to-face with the sales person. This was based on the premise that the sales person would assist the customer to identify their needs and to make their purchase decision; and hopefully to upsell them in the process. But its pretty easy to see that once consumers get comfortable with online car purchasing, they are going to want to do it in other categories.
Organisations attempting to sell traditionally high touch, high involvement products and services are justifiably concerned given their investment in physical stores. However, they should also be keeping a close eye on four other facets of the new digital purchasing process:
2.Pier group reviews and ratings
3.The ease of price comparison
4.The huge reluctance to engage with ‘the slippery sales person’
In the past, it was only the obsessive/compulsive personalities, or those with lots of free time, who undertook exhaustive research before making a major purchase decision. In the digital world, however, many consumers actually enjoy ferreting around online for the smallest details, and because it can be done in their downtime on their smartphones, they do it a lot. In practical terms, this means that those organisations that fail to supply a large range of information about their product or service may be perceived as shallow, or even of trying to hide something!
Similarly, customers used to rely on the limited experiences of their friends and workmates, and a few magazine articles, for product ratings and reviews. Through the wonder of the internet, every consumer now has access to a global network of reviewers and a seemingly infinite number of rating systems. And customers love them all! Brands must be prepared to participate on a wider scale and make themselves available for more frequent, and more intense, ratings and reviews.
Unfortunately for any organisation selling any non-exclusive product or service, consumers are now well aware that they can quickly and easily compare prices via comparison websites. Since most of these websites limit the variables utilised in their comparisons, consumers are inevitably directed to compare the items on price rather than their features. This is particularly challenging for those retailers or service organisations for whom their in-store experience was a large part of their customer appeal. These organisations may have to either change their model, or find new and more effective ways to communicate their unique service experience.
Consumers today want to be as well armed with as much ‘objective’ information as possible before engaging with the sales person, which is often the last step, and regarded as the necessary evil. For sellers of high involvement products and services, the good old days are gone or quickly going. Success in the digital age will require a very different mind-set, and some radically different approaches to marketing and communicating with customers.