a dealeradvantage Special Report Proof that Merchandising Works

Transcription

1 What Every Dealer Needs to Know to Rule the Online Jungle a dealeradvantage Special Report Proof that Merchandising Works

2 Balloons. Shiny cars front and center. Signs and banners. And a giant, inflatable gorilla. All these merchandising tactics work. On the lot. But how do you grab shoppers attention online and drive interest in your cars? Online merchandising is the Digital Gorilla that gets your inventory noticed and opens the door for you to sell more cars. Let the Digital Gorilla make a big impression with proven methods that make shoppers not only notice but also want your cars. With the Digital Gorilla, you ll be the king of the online jungle. Read on to find out what the Digital Gorilla can do for your store. 2

3 A Look Inside the Online Jungle Selling cars online can be like a fight for survival in the jungle. With 92% of car shoppers turning online 1, how can you stand out in a landscape that is lush with inventory? You ve got to do more than stock in-demand cars. After all, competition is fierce and your closest competitor is just a click away. On Cars.com for example, shoppers have access to more than 2 million cars from more than 16,000 dealers. An April 2010 search for a used Honda Accord within 30 miles of downtown Chicago, for example, netted more than 750 results. 3

4 The Digital Gorilla has the power to more than double contacts to your store 2. The likelihood of a shopper clicking for more details on your car rises significantly when all the merchandising elements are in place. So how can you make your inventory and your dealership stand out and get attention? We analyzed more than 200,000 listings on Cars.com to find out what clicks with car shoppers. What is it that grabs the attention of a car shopper online the way a large, inflatable gorilla can on a dealership s lot? For the first time ever, we determined the impact of various online merchandising elements. The effect was huge even larger than an oversized gorilla on your lot. 4

5 Shoppers Respond to the Digital Gorilla Pricing, photos, sell copy and video directly increase both vehicle details page views and contacts to the dealership 2. Call it animal attraction. Consumers simply can t resist your inventory and the lure of the Digital Gorilla. Together, these merchandising tactics drive traffic and help you sell more cars: Competitive pricing shows consumers they ll get a fair deal. Multiple photos and video invite a closer look. Engaging sell copy promotes the car and the value of buying from your store sets you apart from the herd. 5

6 Don t Peel Away Your ROI 13% were listed without a photo 7% were listed without a price Many stores ignore the Digital Gorilla. A recent review of used-vehicle listings on Cars.com found that 13% were listed without photos, 7% were listed without a price and 13% didn t have sell copy. These ads stand little chance of attracting buyers. Don t squander your online advertising investment by underestimating the power of the Digital Gorilla. Would you consider buying a home listed online if it didn t have a price? What about photos? If you re like most people, you assume the property is too expensive or has problems when this information isn t provided. Shoppers use the internet for convenience and will move on to listings that offer them the full picture. Dealers who don t take the time and effort to demonstrate the vehicle and the value of buying from their stores on each and every listing, simply won t get the traffic. 13% didn t have sell copy 6

7 In the Jungle, Price Matters Most When merchandising your used-vehicle inventory, you can t afford to overlook or misjudge the price. In fact, no amount of online marketing can overcome a price 3 that is too high. Our analysis found that a fair market price on used vehicles will significantly lift vehicle and details page views and more than double vehicle demos and contacts. That is not surprising considering that used-vehicle buyers consider pricing information to be the most useful content on third-party sites, according to J.D. Power and Associates 4. If a price is out of line, you may not even get the opportunity to connect with the shopper. Those vehicles priced 10 percent or higher than the market average price received 57 percent fewer contacts. Tools from companies such as vauto and FirstLook and market reports from Cars.com provide you with up-to-date information to help you price competitively. When your car is priced higher than its competition, use your sell copy to call out unique features that justify your asking price. Fair Market Price Increases Details Page Views & Contacts for Used Vehicles Cars.com Merchandising Effectiveness Analysis, % 136% Vehicle Details Page Views Contacts 7

8 You don t need to offer the lowest price, but you do need to keep an eye peeled to your competition. Price relative to your market. Some stores avoid pricing vehicles with the hope that it will spark curious consumers to ask How much? While shoppers may call with an initial inquiry, they may not be of the same quality as a buyer that already knows your price. Listing a price frees up your time for meaningful follow-up with ready-to-buy prospects not fielding basic questions from early-stage price hunters. If that is not enough of a reason to price your vehicles online, consider this: new tools on online shopping sites such as Cars.com allow shoppers to focus on specific price ranges. Vehicles without a price fall to the bottom of the listings and may not be seen at all. 8

9 Don t be Caught Without Photos Shoppers in the jungle are on the hunt. They want to see actual photos of used vehicles and often will not even consider vehicles listed without them. Used vehicles with multiple photos yield even better results. Allow shoppers to take a virtual test drive with pictures that demonstrate the vehicle s condition and special features. Add a photo or two of the interior, the odometer and even the owner s manual and maintenance records to show they re available. Include any problem areas to avoid surprises when the customer arrives for a test drive. Adding photos where there weren t any before will more than double the chance that a consumer will click on the ad and will drive at least 117 percent more contacts 2. Multiple Photos Increase Used-Vehicle Details Page Views & Contacts Cars.com Merchandising Effectiveness Analysis, % 175% Lift in Vehicle Details Page Views 117% 127% Lift in Contacts Increase Photos from 0 to 1-10 Increase Photos from 0 to 11+ 9

10 The shopper is more likely to send a lead on the listing with more photos. Our analysis found that listings with more than 10 photos see the most consumer response, resulting in an additional lift in both vehicle details page views and contacts to your dealerships 2. On Cars.com today, the average listing has nearly 13 photos compared with just five photos three years ago. When it comes to photos, it s important to keep pace with the competition. If one vehicle listing features 32 photos, shoppers may wonder why the next dealer only chose to feature three photos. 10

11 Video Packs a Punch Want to stand out beyond photos? Currently, only 3 percent of Cars.com listings include video, even though it can increase contacts by 13 percent. Special video icons attract additional attention in the listings environment and allow you to tell the complete story of the vehicle with narration and music that helps you to make the sale. Video Drives Used-Vehicle Details Page Views & Contacts Cars.com Merchandising Effectiveness Analysis, % 5% Lift in Vehicle Details Page Views Lift in Contacts 11

12 Beat Your Chest Ad Copy Sells You ve got to tell it to sell it. The Cars.com analysis found that when other merchandising factors were equal, sell copy about the vehicle and the dealership drives additional contacts. Listings with sell copy about the vehicle drive 10 percent more contacts than listings without 2. The addition of copy about the dealership has an even greater impact, increasing contacts 13 percent. The greatest lift in contacts occurs when dealers write sell copy (seller s notes) for both the vehicles they are listing and about the dealership (batch taglines). When used together on Cars.com, these two sell copy types drive a 17 percent increase in contacts 2. So go ahead and beat your chest. Buyers can t ignore it when you promote the unique features of your cars and the value of doing business at your dealership. Sell Copy Increases Used-Vehicle Contacts Cars.com Merchandising Effectiveness Analysis, % 10% 5% Go beyond the VIN decoder and provide information on the car s unique or special features. Phrases such as one owner, nonsmoker and bought and serviced here build shoppers confidence and increase interest in the vehicle. Inventory Copy Dealership Copy Both 12

13 Digital Gorilla Drives Buyers to the Store While Cars.com s Merchandising Effectiveness Study shows the Digital Gorilla tactics drive contacts online, it may also be more effective in driving dealership visits than the giant inflatable gorilla on the lot. A separate analysis conducted with Synovate confirmed merchandising activities are key drivers of dealership visits. Synovate interviewed approximately 700 consumers at 16 dealerships nationwide. The study found that merchandising is very influential in motivating in-store visits by Cars.com shoppers, with price, photos and sell copy being the top three influencers among shoppers doing extensive web research. Price, Photos and Sell Copy Most Influence In-Store Visits Value of Third-Party Websites to Dealer Walk-In Traffic, Synovate,2008 Compared/competitive pricing 86% Multiple photos 83% Sell copy 81% Phone lead 78% Video 72% lead 72% Banner ads 59% Mobile 52% Extremely/very influential (%) 13

14 While merchandising may not be new, we can now measure its effect on your online performance and advertising return on investment. The bottom line it is critical to your success. Studies both online and on the lot prove that dealers who provide more information about their vehicles and their dealership in their vehicle listings are rewarded in the sales process. Paying more attention to how you showcase your inventory in your virtual showroom connects your store with even more buyers. So go ahead and unleash your Digital Gorilla. Need help getting started? Cars.com is here to assist you with creating the Digital Gorilla that makes online shoppers not only notice but want your cars. Cars.com s Dealer Success Guide (dealers.cars.com/success) can help you put the photos, video, sell copy and pricing strategies in place that will crown you as the king of the online jungle. Contact: dealers.cars.com/info ABOUT THE STUDY To determine how online merchandising elements impact advertising results, Cars.com conducted an analysis of more than 200,000 used and new vehicles that were listed on and removed from Cars.com between June 2008 and June The sample was controlled for type of vehicle, model year and local market size. 1 Capgemini Cars Online 08/09 study. Includes U.S. shoppers with internet access only. 2 Cars.com Merchandising Effectiveness Analysis, Vehicles priced within ± 10% market average for year, make, model, trim and engine. Cars.com Merchandising Effectiveness Analysis, J.D. Power and Associates, 2009 Used Vehicle Market Report All dealer customers of Cars.com are responsible for complying with the Cars.com Advertising Policies located at