maximize sales to the digital shopper
TRANSCRIPT
Maximize Sales to the Digital Shopper
Presented by Marty Blue, CarGurus SVP of Business Development September 14, 2016
Agenda • How Shoppers Use the Internet to Find Cars
• Taking Advantage of the Pre-Owned Market
• Best Practices in Used Car Sales
• Competitive Pricing
• Savvy Merchandising
• Targeted Marketing
Car Shopping Has Moved to the Web
of car buyers use the internet in their search for a vehicle
Source: DMEautomotive
80%
The average auto shopper!spends 12+ hours!performing online research.!
Source: Google
3 of the 5 most-visited websites are search engines
Source: Alexa, Fleishman-Hilliard
89% of consumers conduct searches before making a purchase
Most Shoppers Begin With Search…
…Then Progress to Auto-Specific Websites…
• 80% of shoppers visit at least 3 websites
• 27% visit 7 or more websites
16%
34% 18%
27%
5%
1 to 2 Sites 3 to 4 Sites 5 to 6 Sites 7+ Sites None
When buying a car, how many websites do you typically do research on?
Source: CarGurus survey, Apr. 2015
The serious shopper visits only
Source: McKinsey
…While Store Visits Happen Only at the End of the Process
1.6 dealerships
Source: Borrell Associates
Dealers Are Shifting Ad Budgets to Online Channels
Digital share of dealer ad budgets
43%
2012
67%
2015
Source: Google
Initial Info-Gathering
Narrowing the Search
Contacting Dealers
Conducting Test Drives
Internet searches OEM sites
Third-party shopping sites
Third parties Dealer sites
In-store visits
19 digital touchpoints, on
average
There Are Multiple Opportunities to Reach Shoppers Online
Agenda • How Shoppers Use the Internet to Find Cars
• Taking Advantage of the Pre-Owned Market
• Best Practices in Used Car Sales
• Competitive Pricing
• Savvy Merchandising
• Targeted Marketing
Both New and Used Sales Set Records in 2015
Graphic – 17.5 million new car sales, 38.3 million used car sales
Source: Edmunds
17.5 million sales
38.3 million sales Used Car
New Car
Yet In a Low-Wage-Growth Environment, New Cars Are More Expensive Than Ever
The average new-vehicle transaction price rose 2.5% in 2015 to $33,188
Source: Edmunds
Shoppers Turn to Late-Model CPO Vehicles In Search of Value
• CPO sales hit a record in 2015
• 2016 is even stronger: 1.558 million CPO vehicles sold YTD vs. 1.467 million Jan.–Jul. 2015
Source: Automotive News
Focus on Value Leads Shoppers to Conduct More Research
Average research time has gone up 3 hours since 2013
Source: Google
Used-Car Shoppers Conduct Research on Multiple Devices…
• 90% of used-car buyers shop on multiple devices
• vs. 85% of new-car buyers
Source: IHS Automotive
…Are More Open to Different Kinds of Vehicles…
55% of used-car buyers consider both new and
used vehicles
36% of new-car buyers vs.
Source: IHS Automotive
…And Consider More Vehicles
Average number of searches run by CarGurus new-
vehicle shoppers
2.7 Average number of
searches run by CarGurus used-vehicle shoppers
6.4
Source: CarGurus data, Aug. 2016
Agenda • How Shoppers Use the Internet to Find Cars
• Taking Advantage of the Pre-Owned Market
• Best Practices in Used Car Sales
• Competitive Pricing
• Savvy Merchandising
• Targeted Marketing
Pricing Marketing Merchandising + +
Elements of Used Car Sales Success
Agenda • How Shoppers Use the Internet to Find Cars
• Taking Advantage of the Pre-Owned Market
• Best Practices in Used Car Sales
• Competitive Pricing
• Savvy Merchandising
• Targeted Marketing
Price Transparency Is an Expectation
Cost of Failed Purchase
Nee
d fo
r Tra
nspa
renc
y
of shoppers won't buy a car without transparent, third-party pricing data
78%
Source: CarGurus survey, Dec. 2015
Price Remains a Focus As Shoppers Narrow Their Search
What vehicle detail are you most likely to filter for when conducting a vehicle search?
50% 26% 8% 8% Price Mileage Options Color
Source: CarGurus survey, Dec. 2015
Have you ever used your mobile device to look up pricing while at a dealership?
38%
39%
24% Yes
Not yet, but I plan to
No
Price Comparisons Even Take Place at Point of Sale
Source: CarGurus survey, Apr. 2015
Use Pricing to Expand Your Visibility
• Price transparency does not set up a race to the bottom
• Instead, fair market pricing keeps you in shoppers' consideration set
• On CarGurus, appearing on first SRP (Great/Good/Fair deals) increases VDP views by 40%
Source: CarGurus data
Highlight Prices In Your Advertising
Attract More Lead Submissions With Competitive Pricing
90% of CarGurus leads come through on fair or better deals
Source: CarGurus data
Agenda • How Shoppers Use the Internet to Find Cars
• Taking Advantage of the Pre-Owned Market
• Best Practices in Used Car Sales
• Competitive Pricing
• Savvy Merchandising
• Targeted Marketing
For Auto Shoppers, Detailed Vehicle Info is an Expectation
Top activities on CarGurus SRPs/VDPs:
Viewing photos Filtering by price, options, and color
Source: CarGurus data
More than 80% of the information
our brains receive is visual
Merchandising Feeds Consumers' Need for Visual Information
Source: NIH
Upload Compelling Listing Photos to Attract Attention on SRPs
One photo adds a 15% boost in conversion
(vs. no photos)
Source: CarGurus data
Think from the shopper's perspective: which features would lead you to buy one vehicle over another?
Maserati GranTurismo sport seats
Capture Photos of Valuable Features
What Not to Do: Desktop
• Bad framing in listing photo
• No clear feature focus in subsequent photos
• Glare in windshield and hood
• Car doesn't look appealing – why should I buy?
What Not to Do: Mobile
• Listing photo is stretched
• Clutter on photos (badges, contact info)
• American flag motif?
Optimize Listing Copy, Too
Clear messaging • Seek to establish each vehicle's unique selling points
Compelling details • Provide numerical facts and describe high-value vehicle features
Conciseness • Keep things short and sweet
Ensure You're Visible on Mobile
Fast, functional mobile website • 40% of people will leave a webpage that takes more than 3 seconds to load
Mobile advertising/retargeting
• Mobile ad spending has not kept up with the amount of time people spend on mobile: a hidden opportunity
A streamlined contact process
• Locating stores/checking hours is the top mobile retail activity for all age groups
Sources: eMarketer, Google
Agenda • How Shoppers Use the Internet to Find Cars
• Taking Advantage of the Pre-Owned Market
• Best Practices in Used Car Sales
• Competitive Pricing
• Savvy Merchandising
• Targeted Marketing
Digital Marketing Is Essential for Reaching the Connected Shopper
Marketing essentials:
• Expand your reach with partnerships
• Engage in-market shoppers with email marketing
• Drive site traffic with digital ads
Partnerships Broaden Your Reach
• Partner with sites that invest time and money in marketing (so you don't have to!)
• Gain additional exposure to partners' qualified audience
• Promote your brand, share contact information, and highlight specific listings
Aim to Influence In-Market Shoppers • Partnership options: local dealer associations, inventory providers, third-party
shopping sites
• Third-party sites are much more influential than traditional media (TV, newspapers, radio)
Which online sources do you use to look for vehicle information?
Source: Google
Email Marketing Targets Low-Funnel Shoppers Tips for Implementing • Utilize low-cost services like MailChimp that provide database management
and easy email automation • Collect email addresses in various locations: from lead submissions, on your
website, and in your store
Test and Iterate • Subject lines • Day and time • Calls to action
Compare Email Performance to Industry Benchmarks • Stay top-of-mind with shoppers by emailing them
on a regular basis
• Sending more email does result in less engagement per email
• Travel and transportation benchmarks:
• 20% open rate
• 2.2% click-through rate
Source: MailChimp
Digital Ads Are Attracting More Ad Dollars
Auto industry digital ad spend rose 22%
in 2015
Only one industry (retail) is increasing digital ad spend more than auto
Source: eMarketer
Online ads reach shoppers when they are most susceptible to influence
• Searching for information
• Viewing products • Conducting
research
Online ad spending, 2014-2018
*Other: classifieds, directories, lead-gen, email ads and mobile messaging ads
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
2014 2015 2016e 2017e 2018e
Search
Display
Other
Both Search Ads and Display Ads Have a Role to Play
Source: eMarketer
Programmatic Display Already Takes Most Auto-Industry Ad Spend
72% of display ads will be bought programmatically by 2017 46% year-over-year
rise in spend
Sources: IgnitionOne, Adobe
Pricing Marketing Merchandising + +
Elements of Used Car Sales Success
Questions?
Marty Blue [email protected] To learn more about CarGurus: Call us at (855) 971-1145 Visit https://www.cargurus.com/signup/IS20G9