Will Car Buying Be Driven by an E-Commerce Shopping Model?

Will Car Buying Be Driven by an E-Commerce Shopping Model?

Online shopping was a way to avoid stores during Covid and maybe even click away boredom.  Some stores added features that let shoppers preview products, making decisions much easier and hitting buy much less of a questionable mystery for purchases like cosmetics, sunglasses, furniture or even a car.

Covid shifted shopping habits…even for new cars. While many consumers might continue to prefer shopping online for goods and services, they also might be more inclined to look to the virtual realm for their car. Will car buying be driven by an e-commerce shopping model, too? According to a story via ABC News, this isn’t just a possibility…it’s now a ‘MINI’ reality!

Will MINI become an Automotive E-Commerce Giant?

Even before Covid, e-commerce platforms already existed for car shopping. However, this wasn’t necessarily an option that all consumers were embracing. Some may prefer old-fashioned dealership visits. But Carvana and other businesses offered a unique service to individuals who didn’t want to take time to visit a dealership.

Sites like Carvana let consumers pick out a car and have it delivered. The company offers a convenient way to browse for a new car and complete the process virtually. Consumers also have the option to pick up the car. This is a bit like how stores offer a ‘ship it to store’ or similar option.

When Covid forced some dealerships to close in certain areas, consumers might have had no other option but to shop online. Dealerships had to find remedies for creating an online shopping experience; some might have already offered online options. But for many dealerships the pivot to online retail was likely a huge change.

Now manufacturers—and dealerships—might understand that automotive e-commerce is the future of the car buying experience. While Tesla lets consumers order their car online, the process from picking out the car to actual delivery of the vehicle can take a bit of time; news outlets report that Tesla deliveries are taking several months. So while Tesla embraces online commerce, purchasing a Tesla isn’t necessarily a quick experience.

MINI, however, is rolling out a program that might be the future of automotive e-commerce. The manufacturer, per ABC News, has launched MINI Anywhere in California. The program is a one-and-done e-commerce experience. Consumers can choose their MINI, obtain financing and complete all the paperwork online. The best part? The whole process takes about 20 minutes.

MINI Anywhere also includes an augmented reality experience. Want to know how that Mini will look in the driveway? Drop it in the environment. Then walk around the augmented reality graphic to check out the car from different angles. ABC talked to Patrick McKenna, an executive for MINI, who explained to the outlet that consumers can even schedule virtual test drives.  

“This definitely is the future; McKenna told ABC News. “We’re making dealers digitally savvy in the marketplace.”

Potential E-Commerce Speed Bumps?

ABC News noted that MINI was planning to offer MINI Anywhere in Florida and Texas. The rest of the dealer network would be included by the end of the year. The future for MINI might definitely be the virtual e-commerce model.

However, are there any speed bumps ahead for this model if other manufacturers look to e-commerce platforms for their future, too? ABC News also noted that online models could mean higher prices, and negotiating might not be an option. Buyers also wouldn’t have that tactile experience that the dealership holds. And ABC also touched on the idea of buyer impulsivity.

Add to Cart: When Car Buying Jumps into the E-Commerce Fastlane

While ABC mentioned buyer impulsivity related to emotions, there might be more to explore regarding online shopping and impulse buying. Many consumers might relate to having made a purchase decision—perhaps during Covid—that wasn’t based on need but want. Or maybe the speed of the internet spurred a buying decision without much research or thought.

While, yes, buying a car usually includes research and visits to dealerships, if more manufacturers embrace e-commerce platforms for purchasing a vehicle, could this speed up the buying process in a bad way for some consumers? The internet allows consumers to shop quickly and conveniently. The option to now add a car to a virtual shopping cart allows the buying process to become more simplistic, and this could be a mixed bag for some shoppers.

The good and bad of online shopping can be debated. There is no right or wrong answer. There could be consumers that buy a car without researching thoroughly, while others still spend hours exploring details. Every consumer is different.

However, consumers who want to purchase a car can’t exactly just drop a Ferrari into a virtual cart without being approved for financing or having the funds to cover that purchase. Unlike shopping for furniture, shoes or other goods and services, buying a car online is a major purchase.

Exploring MINI Anywhere

While MINI Anywhere is only available in California, anyone can check out the site to better understand the MINI virtual experience. The company outlines all the details about what shoppers should have on hand (keep your license nearby!). But there’s also a virtual assistant who is standing by to answer questions and help out shoppers. MINI lets consumers engage in a Live Chat or drop a text.

MINI also still accepts trade-ins via the online experience. Shoppers need to include all the details about their car. Kelley Blue Book provides the valuation.

Although shoppers are handling the car buying process online, the local dealership is still part of the experience. Shoppers get to choose the dealership from which they wish to purchase their new MINI. The vehicle can be delivered (this is based on proximity, though).

E-Commerce Shopping Model

The Dealership Experience of the Future?

Covid transformed the shopping experience for the automotive industry. While in-person shopping at the dealership was the standard process, the shelter-in-place mandates that hit many parts of the country forced dealerships to take business online.

Yet, online car shopping isn’t entirely new. Carvana has offered online experiences for years. Covid, though, sped up the normalcy of this car shopping trend. While some consumers might have been hesitant to embrace a virtual shopping experience, they also might have found the process to be simpler, faster and a less stressful experience.

While the in-person dealership experience was the norm for the industry, was it an enjoyable norm for many consumers? The answer probably depends on the consumer. Some might have enjoyed haggling. Others might have dreaded the experience entirely.

Whether or not all consumers are ready for online car shopping, the experience is here…and it’s evolving. Covid and the online pivot might have taken dealerships by surprise, but now many have probably settled into at least offering some type of online options.

MINI Anywhere might just be the beginning. Nissan offers online shopping via Nissan@Home. And other manufacturers may line up to offer their own online platforms. Consumers will drive demand. What the consumer prefers will ultimately influence the industry’s next move.

According to Cox Automotive Car Buyer Journey Study: Pandemic Edition, new car buyers spent a little more than 5.5 hours online researching and shopping—an hour less than a year prior. The report also noted that more than 11 hours and 11 minutes were spent on purchasing a new car (this was closer to 12 hours in 2019). Among new car shoppers, only 45 percent knew what they wanted from the beginning of the shopping experience.

If manufacturers streamline their online process, perhaps these figures could dwindle. That is, maybe consumers might speed up their process if it’s easier to find what they want. This could be true for those who know exactly what type of car they want.

Yet, maybe dealerships could continue to be the destination for some shoppers. While online shopping is an option for many businesses currently, not all consumers shop just online. Many will choose to purchase some items online and go in store for other purchases. Others use online options as often as possible.

Perhaps the dealership experience becomes a hybrid option. Maybe they offer both in-person and online purchasing options. Something for everyone. Those who want to visit the dealership and shop around for the best price might continue to do so. Maybe, though, different dealerships have unique online offers. Promotions might not go away, rebates might still be offered online. And different sales could be promoted periodically, too.

Automotive e-commerce is evolving, though. MINI might be the first of many to begin to offer online platforms and experiences for a convenient and quick shopping experience. In the future, car buying could be a seamless online experience. Consumers might be able to browse all their vehicle options and maybe view them in their own environment via augmented reality (like MINI!). MINI Anywhere might be the model for car shopping, and consumers might be on the lookout for which manufacturer follows MINI’s mega lead.