Car buyers today have far more information than they did just 15 years ago, and they're using it.
Google says that three-quarters of all auto shoppers now do hours of research before they ever visit a dealer.
They can find some information on dealer invoice prices--though not necessarily all the various incentives that particular dealer may have at his disposal--and have often narrowed down their choice to a small number of vehicles.
Some visit only one dealer in person after communicating online about price and availability.
In that light, suggests an article last week in Canada's The Globe & Mail newspaper, dealerships need to rethink how they approach customers.
Rather than salespeople viewing customers as targets, dealers have to adopt a softer approach by making their dealership experience pleasant enough so the informed buyer chooses to purchase there.
New Honda of Seattle dealership (rendering), Mar 2015
High-pressure sales tactics, hours spent on paperwork, and last-minute disclosures about added fees, financing options, and dealer add-ons can all drive away buyers.
It's not always about the lowest price, either. Customers have demonstrated that they'll pay a lot more for a total experience: Think Starbucks coffee versus Dunkin Donuts.
"The shark-attack style of sales is being pushed aside by an 'experience' model," says the newspaper, "aimed at making customers comfortable so that they’ll choose to do business with your dealership."
“Car dealers don’t need salespeople now," Google's Tim Wilson, who leads the company's automotive program in Canada, told the Globe & Mail.
"They need facilitators [who] make the customer feel good about their experience."
In the old days, dealers had "all the pricing info in their secret little black books," he said. But that information is now "available to anyone who wants to look.”
And dealers have little choice but to get used to the new breed of buyers armed with more knowledge than ever.
Vision for Lincoln dealership in China
An article in industry trade journal Ward's Auto cites an AutoTrader study saying 42 percent of buyers now use multiple devices to research their purchases: not only personal computers, but smartphones and tablets.
That number will be 80 percent in five years, AutoTrader suggests.
And it gets worse: Dealer personnel are now faced with buyers who comparison-shop on their smartphones while in the dealership.
That can get annoying after the fourth or fifth time, says Ward's.
But the Ward's article ends with his suggestion that dealers focus on more existential threats to their current model. Amazon, for instance.
That company's goal, says Jeff Cole, director of the University of Southern California’s Center for the Digital Future, is "to sell every auto in America online and turn dealerships into service centers.”
Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]
“There is a long list of businesses," Cole says, that have been "put out of business by Amazon.”
And that's a challenge to the established franchise-dealer model that may dwarf even the threat posed by Tesla and its state-by-state battle with dealership trade-group lobbyists.