The Unbreakable Value of the In-Person Test Drive

by Eric DeMont | Global Practice Director, Urban Science

If there has ever been any doubt regarding the relevance of the in-person test drive, we have confirmed loud and clear that it is here to stay. Over the summer of 2020, we worked with the Harris Poll to survey over 1,500 adults in the U.S. on how the pandemic has influenced the way they shop. As data scientists, we look for both patterns and anomalies hidden in the data that we then infuse into our informed perspectives. What we’ve learned following the permanent effects the year 2020 has had on the world is that once again, not much remains constant aside from change. This study, however, also highlighted one aspect of the vehicle purchase process that has largely remained unchanged in a year in which just about everything else had been forced to adapt.

The in-person test drive at a physical dealership is one enduring element of the car-buying process that has more than weathered the storm of COVID-19. The 2021 auto buyer still wants to experience their next vehicle purchase the same way as the 2010, 2018, 2019, and 2020 auto buyer. According to the study(1), most adults (82%) agree that there are certain elements of the vehicle purchase process that are better fit for in-person visits and cannot be done online. Of that 82%, 80% point directly to test drives as a key component of the purchase process that simply cannot be replicated in a virtual environment.

While we can’t statistically say the pandemic has had no effect whatsoever on people’s interest when it comes to digital retailing or that there aren’t consumers out there embracing the idea of moving many parts of the purchase process online, we can say the majority of adults (79%) still to this day report “they would never buy a vehicle without test driving it first.” Furthermore, 81% agree that a vehicle is too substantial of an investment to risk not seeing it in person before buying.

In November of 2020, Urban Science conducted a follow-up study(2) to evaluate consumer appetite for how they want to buy a vehicle nine months after the virus initially hit. According to the survey, despite the rise in COVID-19 cases across the U.S. during this period, 86% of consumers report being very or somewhat comfortable with buying a vehicle in person and 64% believe it’s completely safe to visit a dealership today.

Even more notable was when we asked consumers if they were ready to purchase a vehicle exclusively online, the response was a resounding “no.” While there are some aspects of the process people do prefer to complete online, most adults said that in person at a dealership is the most helpful to ensure a positive experience, especially when it comes to, you guessed it, TEST DRIVES. 

Once again, both dealers and automakers have proven their resilience to change and adversity as this industry has done throughout historical recessions, pandemics, and natural disasters. Within weeks of the first U.S. case of COVID, we saw dealers quickly act to remediate the situation at hand with advertising containing language around “at-home test drives” and “we’ll bring the car to you!” Dealerships immediately stepped up their game in terms of both vehicle sanitization efforts and operational modifications to adhere to new and everchanging CDC-compliant safety protocols.

At Urban Science, we too had to adapt our test drive incentive solutions to accommodate for things like at-home test drives. We customized offers to help support local restaurants and changed our messaging to inform the public of the great measures our dealers were taking to ensure the safety of their customers. While the fundamental concept of normalcy shattered around us during this time, the collaboration and innovation that arose as a result is something that made our solutions much like the need for the in-person test drive experience, unbreakable.

In many ways, one could argue that the unrelenting impact of this global disaster has only strengthened the relationship people have with their cars. The vehicle itself has consistently been the ultimate symbol of freedom. In times of lockdown, trepidation, and uncertainty, a personal vehicle has become one of—if not the only—places people can go to escape the chaos of our new lives often stuck at home, plagued with screen fatigue. Going for a drive may be the only time and place many of us can find peace or feel free from COVID-related restrictions during times when we can no longer gather for entertainment, go out to dinner, attend a concert or sporting event…the list goes on. Perhaps more of a behavioral observation than a data point, your car is one of the best ways to get out of the house and still be safe, free, and socially distant. It would only make sense that the need to test drive a vehicle in person before making such a large commitment would prove to be pandemic-proof.

To learn more about Test Drive Solutions from Urban Science, contact Eric DeMont at ekdemont@urbanscience.com.

(1) Urban Science and The Harris Poll Joint Study, Around the Bend: How COVID-19 Impacts the Next Normal for Dealers

(2) Urban Science Online Study, The Harris Poll “Continuing Through COVID: Are Consumer Buying Intentions Changing All That Much?”, 2020

© 2021 Urban Science. All rights reserved.

Dealer Survey Points to Three Ways to Combat Inventory Shortage Problems

Exploring recent survey data from the Urban Science® COVID-19 Dealer Survey

This survey was conducted online within the U.S. by Urban Science to understand the impact of the pandemic on dealers and how they are evolving to fulfill the changing needs of consumers while remaining a successful business. Survey responses were evaluated for margin of error at a 90% confidence level.

While it is no secret that inventory shortages have become a common struggle for many U.S. dealerships, our recent survey data indicates opportunities can be found in an otherwise disadvantageous situation. Overall, dealers are recognizing that ongoing vehicle shortages are influencing consumers to increasingly use dealer website inventory to inform their decisions on which retailer(s) they will visit before making a purchase.

Below are three critical implications of the pandemic and actions dealers can take to turn them into opportunities:

1. 80% of dealers report consumers are submitting leads from further distances based on inventory

As consumers become more willing to take a drive for the car they want, they become less likely to be loyal to their nearest dealership. This means dealers in strong inventory positions should expand their media and test drive incentive campaigns to reach further-out geographies. On the contrary, dealers with limited inventory should deliver test drive incentives to all consumers visiting their digital inventory pages to entice them into their showroom, even if they don’t have the specific model that in-market consumers are looking for.

2. 82% of dealers say inventory views have increased during the pandemic

The world may be upside down, but the fact than an increase in VDP views still correlates directly to an increase in vehicles sold is a good sign for dealers. Current industry trends indicate tight marketing budgets would be well spent on things like test drive or purchase incentives to help you convert active, in-market consumers by encouraging them to come in and test drive the exact vehicle they could be taking home. Test drive incentives continue to be a surefire tactic to getting more of your VDP viewers into your showroom, where you have a higher chance of closing the sale.

3. 76% of dealers agree that consumers are more likely to buy the vehicle they submitted a lead for

Increasing lead close rates should give dealers reassurance to work their leads persistently and confidently. If there is a greater likelihood for people to purchase what they say they want, dealers should be mindful to not allow their competitors to steal a sale due to insufficient follow-up. They should follow up with their leads for as long as it takes to get in-market consumers into the showroom and into the vehicle. More specifically, this means salespeople shouldn’t call it quits after seven days and should prevent leads from defecting during that critical 8-14-day period. If you get a customer on the phone, don’t let them hang up without setting up an appointment to come in and take a test drive. If they’re on the fence, lock in the appointment by issuing an instant test drive offer over the phone or in a follow-up email, such as a $25-$75 Visa e-Gift card as a thank you for coming in. For elderly, at risk, or just nervous customers, offer to bring the vehicle to them!

As we settle into the fourth quarter, supply concerns don’t seem to be dissipating. While demand is certainly rebounding from the two months of production lost to the pandemic, pent up demand can contribute to even more of a scarcity of vehicles as automakers struggle to keep up and replenish outputs. More than ever, dealers need to continue to make the most of what they have by keeping the right mix of vehicles in stock to the best of their ability and taking advantage of incentive programs that they can control based on their own unique inventory situation.

As of last month, 2021 models accounted for only 3% of dealership inventory, according to Cox Automotive, compared to a quarter of dealer stocks being new models at this time last year. Therefore, OEM-sponsored clearance deals and incentive programs have been slower to materialize, calling for individual dealerships to take matters into their own hands and work with vendors that can help them convert more of their growing website visitors to actual showroom visits, test drives, and ultimately sales with more targeted and personalized incentives.

© 2020 Urban Science. All Rights Reserved.

ON THE DEALER FRONT LINES: Real-Life Stories, Tips & Data to Help Dealers Thrive in a Volatile Market

Part I: WHY NO INDUSTRY IS MORE RESILIENT

Over the next few weeks, AutoHook will be interrupting your daily COVID-19 newsfeed of doom and gloom to deliver a much-needed dose of positivity to dealers and automotive professionals across the U.S. In our mini blog series, “On the Dealer Front Lines,” we will share real-life stories and lessons learned during some of the toughest times in the auto industry - from the 1989 recession to 9/11, to the Great Recession of 2008, and through ongoing natural disasters.

We’ve been fortunate enough to interview a “task force” so to speak of auto industry veterans, dealership owners, CMOs of large dealer groups, pioneers in the AdTech space, and leaders at the OEM level to collect first-hand anecdotes of how this industry adapted during the catastrophes of the past and the priceless lessons they took with them.

What’s interesting about the way each of these crises in our history unfolded is that each one had a V-shaped curve. Although we were forced to navigate through turbulent times, in most cases, we came back out of these situations better positioned for success than when we went in.

Even more noteworthy is that the real-life stories we’ve collected are not negative ones. They are stories of innovation and of dealers, technology vendors, and OEMs utilizing these times to come together and sharpen their blade while inventing new and better ways of operating.

Today, we face an unprecedented, worldwide pandemic that will undoubtedly bring new challenges no industry will be immune from. However, the silver lining is that there are things dealers can do now in order to weather this storm and come out of it smarter, more prepared, and stronger than ever.

This series will serve as a reminder of the one theme that has consistently united the hardest times in the history of the car business: innovation.

Stick with us during this journey as we share best practices, real-world examples, and lessons learned, infused with near-real-time data to help dealers thrive in a down market.

As Winston Churchill once said, “Those who fail to learn from history are doomed to repeat it.” So, let’s repeat the positivity that came from the lessons we’ve taken with us.

Stay tuned for Part 2 of On the Dealer Front Lines: What NOT to do Right Now.