Automotive is driving out of the tunnel and starting to see the light.
While vehicle sales are still significantly down overall for April to this point, the industry is seeing some positive points of light as sales are trending up from a dismal end of March. And while many consumers may not be all the way to purchase level yet, their online activity appears to be adjusting to the new normal.
Automotive Traffic Trends during COVID-19 for April
The place to start with normalization of consumer behavior in automotive is with traffic trends. Overall, the past 10 days have seen a 15-20 percent increase in organic traffic from the previous 10 days. This doesn’t make up for all the losses seen in late March and early April, but it is a clear and consistent uptick across accounts.
The impact of the traffic bounce is quite dependent on current state status and stay-at-home orders, as many stores in states that remained largely open for business saw a sharper overall rebound. Others that have been inundated with COVID-19 cases early such as California saw major declines and are now starting to see increases again as individuals get used to the new normal and resume typical browsing behavior. But, these areas are generally not seeing anything close to pre-COVID numbers yet.
The trends can be seen on a granular level as you compare similar, large volume, same OEM dealers – one in a heavily affected area of California that was hit early and had major business restrictions, and the other in Texas, where state orders were issued much later and approach was much different for businesses.
In both cases, traffic has rebounded in the past week. But in Texas, the traffic has already come back to very near pre-COVID numbers. Conversely, in California, traffic went down severely, and even though there is an increase now, it is still down significantly from the norm.
April Leads and Sales Trends in the COVID Automotive World
Similar to traffic, leads have been trending upward for dealers as well. And again, the geo of the website plays into it. While leads across the board have picked up, the dealers in less affected areas where they remained completely open for business are seeing numbers that are within striking distance, or equal, to the past. Heavily affected areas where businesses have online sales only are seeing uptick, but not to the level that they were before.
There are 24 states where dealership operations have been unaffected. In the other 26, only online or remote sales are allowed due to state guidelines. At the beginning, states like Pennsylvania and others banned all vehicle sales. This has since loosened, with everyone now having a shot at online sales at the very least.
No matter where a dealer is, the lead and ultimate sales volume will still depend heavily on how they are adopting to an online sales world. Offering delivery options and digital retailing tools is essential to keep leads and sales flowing. At DealerFire, we are offering a free 100 days of our Delivery Test Drives tool and discounts on the Precise Price digital retailing tool.
But even when you adopt these methods, the reality is a large portion of the population is still not quite ready to buy yet. Incredible OEM discounts have certainly helped spark interest. General Motors, Ford and FCA are all offering 0% financing rates and deferred payment options for new purchases. Other OEMs are following suit with intriguing offers and incentives. And while that is a big reason that there was an overall 11% uptick in early April sales compared to the end of March, it still hasn’t fully transferred for everyone.
There are caveats. One Indiana dealer reported to us that their March was better than last year. A Texas dealer is having one of its best Aprils ever in terms of sales and service. Another independent group in Texas is seeing big gains in both year-over-year traffic and sales. But overall, while dealerships are experiencing large decreases in sales, many are seeing positives signs for the future in terms of traffic and leads.
COVID recovery in some areas, easy online ways to buy and OEM incentives have all helped drive consumer interest. And the expectation is that May will continue the recovery trend – so it’s really important to remain visible now to capitalize on the pent-up demand.
Service is Rolling – Stay the Course
A great way to remain relevant with consumers is continuing to promote fixed ops. With public transportation being less appealing, essential workers that need to travel are trusting their cars as the safest mode of transportation now. Therefore, service needs are still very strong.
Providing safe options for service like deep cleaning, and even pick-up and drop-off options for consumer vehicles is a winning service strategy. And as always, getting consumers to interact with your dealership while the OEM is offering amazing financing options gives the dealership a better shot at getting a future sale.
Stay Visible with your Marketing
Similar to before the rebound started to happen, it’s vital to keep the dealership visible during this time. The new normal is becoming a reality for most individuals, with the biggest initial jump being in website traffic. But given the mentioned pent-up purchase intent that is sure to burst, being at the top of mind with consumers is a huge opportunity.
Continuing paid and organic strategies is obvious, but emerging platforms have more relevance than ever. A dealership’s Google My Business (GMB) page is a great way to get eyes on the brand, as it is a main landing spot for searchers and provides all the quick info they are looking for. This includes basic information like if a dealer is open, what the hours are during this time and what offers are available.
To help through this time, DealerFire SEO customers are being offered GMB Basics for free right now to ensure their info is up to date and they are promoting offers on their Google My Business page.
Literally thousands of consumers visit the Google My Business page a month, and up to 20% of them click-through to the site from the page. Even if they don’t click through, they can call, chat or get directions to the dealership through the GMB page. Having the page fully optimized means more people will find it with basic search terms, creating more interaction for the dealership and website.
And Google Posts allow dealers to have a very visible example of what they are doing in response to COVID-19 on the GMB page. This can include information on if the showroom is open, delivery options, OEM incentives and much more.
What’s in Store for May?
When looking at the data, all signs point to a continued recovery in May – however the growth comes with caution. No matter how good May turns out to be, it will not be near what could have been expected in a non-COVID world.
As has been pointed out ad nauseam, it will largely depend on where a dealer is located. Some states are relaxing stay-at-home measures immediately, while others are extending through the end of May and potentially beyond. These measures, and how consumers react to them, will dictate a lot of the sales volume.
But no matter where the area, the adaptation of new ways to sell and market to consumers will be the difference between dealers that weather the storm and those that truly struggle to get through. Any uptick is extremely welcomed news for an industry based in moving units – especially with the summer sales season ahead.