Perform this Google search – “average shopper visits 1.3 dealerships” – and you will find countless examples of where this myth has been repeated. The 1.3 dealer myth was repeated so many times it became accepted as fact across much of the industry. Sometimes experts simply stated as fact that shoppers now only visit an average of 1.3 dealerships. Sometimes they told the full story, that shoppers visited an average of 4.1 dealerships in 2005 and only 1.3 dealerships in 2011 (sometimes it was quoted as 2010). In every case it was wrong, very wrong.
New research from J.D. Power dispels this myth. Research expert, Arianne Walker, leads the automotive internet practice at J.D. Power and reveals the following:
Hours Shopped Online Dealerships Visited
Authors and speakers generally used the 4.1 to 1.3 change as evidence of the internet’s impact on vehicle shopping. Thousands of us make a living in automotive internet, and it’s difficult not to repeat anything as fact when it suggests the milk you are producing is richer than before. The myth went viral and was quoted by industry experts, respected journals, company representatives, at least one OEM president, and even an NADA chairman. Although greater caution should be shown in the future, I think one could be easily forgiven for having been caught up in the retelling of the myth as fact.
Several years ago, Chuck Dapoz called me and said, “Dennis, this story about an average of 1.3 dealership visits simply cannot be true.” I told him I had some very serious concerns about it as well. Neither of us could identify the original source of the myth. It has been attributed to J.D. Power, NADA, and Google. The most common attribution was to J.D. Power, but that seemed highly unlikely since J.D. Power released the following in their compressive paper, Online Auto Shoppers: Who Are They and How Do You Meet Their Needs?
The Internet’s Impact on Dealer Choice
A common assumption is that shoppers use the Internet to assist in the new-vehicle shopping process to reduce the number of dealerships they need to visit. However, J.D. Power research shows that the opposite is, in fact, true—AIUs visit more dealerships (3.7, on average) than non-AIUs (2.4, on average).
That paper was authored by Steve Witten, one of the best research experts in the history of automotive internet. Chuck and I crunched the numbers over dinner and mutually came to the conclusion that the 1.3 dealer myth could not possibly be true. The myth was inconsistent with other facts, had no reliable sourcing, and was directly contradicted by published data from a well-respected researcher. However, the myth had grown so big it could not be taken on without new, reliable research. That research was released last week and the myth should die quickly.
Some internet experts will be reluctant to accept the direct relationship between internet use and dealership visits. They want to believe the internet causes people to visit fewer stores. In fact, it may cause those people who need lots of information to visit fewer stores than they would have if there were no internet. But both the internet and physical stores are available, and shoppers with large information needs avail themselves to both. In fact, the new reality is that the internet and physical store visits are now linked through mobile. The new study from J.D. Power shows 34% of Automotive Internet Users (AIUs) already use a smart phone or tablet inside the dealership before purchasing the vehicle.
The internet impacts auto shopping more than ever before, but it’s still about the consumer. Some shoppers demand much more information than others, and they don’t all want the same information. The 2011 paper from J.D. Power showed shoppers loyal to a brand were less likely to even use the internet and less likely to contact the dealer through a lead submission. The advertising budgets of manufacturers and dealers are largely devoted to winning incremental business. Loyal business must be cherished and nurtured, but the advertising fight is largely over those who will or might make a switch. This is where the internet is vital, both before and during the store visit. These are the shoppers with heavy information needs and the willingness to visit as many sites and stores they need to in order to meet those information needs.
For the vast majority of shoppers, and shoppers with heavy information needs in particular, the internet is not a substitute for store visits. With increasing frequency, the internet leads up to and is included in store visits. This is why dealers don’t just need a website; they need a robust website loaded with content and great navigation. Shoppers don’t all want the same information, nor do they all want the same amount of information. Dealer sites need to meet the needs of a wide range of shoppers and provide navigation that makes it easy for any shopper to quickly find what is important to them. You’re darn right the internet is important, and so are store visits, and increasingly they are tied together. The integration between sites and stores is demanded by consumers. Savvy dealerships are stepping up with more site content than ever, better site navigation, and tablet computers in the hands of frontline salespeople to tie it all together.
The 1.3 dealer visit is dead. Long live the integration between full-content websites and physical stores.
Dennis Galbraith is the Chief Marketing Officer at Dealer eProcess and oversaw the automotive internet research practice at J.D. Power from 2003 to 2006. He is the author of two books on automotive internet marketing and taught marketing for the NADA Academy and Embry-Riddle Aeronautical University.