It’s an understatement to say the pandemic has had a severe impact on car sales. With dealerships in some areas having been forced to close their showroom doors for weeks or months on end, and many others voluntarily closing their showrooms or severely restricting public access, sales have dropped off dramatically in Canada, according to DesRosiers Automotive Consultants. The firm reports that 2020 saw a 19.7-per-cent overall decrease compared with the year before, and this year is remaining dismal, with February down 9.9 per cent on an annual basis compared with February, 2020.
But if you can’t bring the people to the dealership, you can certainly bring the dealership to the people. At least, that’s what two automakers here in Canada, Cadillac and Nissan, have been doing with what they call a virtual showroom. Visiting either Cadillac Live or Nissan Studio, a customer can schedule a personal, one-on-one appointment with a “company expert” to have an online, live walkaround of a selected vehicle with a back-and-forth Q&A session. Or a customer can also join a group session and ask questions in a more anonymous setting.
But rather than being developed specifically for the pandemic, these initiatives were born from consumers’ online buying and research habits. According to James Nava, the marketing and advertising manager of Cadillac Canada, Cadillac Live was launched in March, 2019, when research showed that more customers were starting their car research online rather than visiting dealerships.
“Obviously, with the coronavirus happening last year, that really expedited the consumer shift more so,” he says. “We were fortunate enough to have this tool available.”
While the Nissan Studio launched in December at the height of the pandemic, it had been in development for a while, inspired more by the likes of Amazon than a health emergency.
“If the auto industry thinks that their No. 1 competitor as far as retail experience is the other automotive brands, they’re behind,” says Adam Paterson, the director of marketing for Nissan Canada. “The average Canadian buys a car every five to seven years, but they buy [other things] all the time. So the reference point as far as the retail experience goes is not another brand or dealership, but to me it’s retail in general.
“And the expectations of what the retail experience is have been increasing exponentially, and consumers have more power, so we need to be able to meet them on their terms and deliver what they expect.”
These showrooms don’t directly sell vehicles online. When people are closer to purchasing and want more information, such as local pricing, financing or even a test drive, they are directed to their nearest dealership, or another of their choice. But in this difficult sales atmosphere, the online experiences have been proving highly successful. Cadillac had its best sales year ever in Canada in 2020, despite the pandemic. With sales up 12 per cent over the previous year, Mr. Nava credits Cadillac Live at least in part for the increase.
But the virtual showrooms have had other benefits as well. Mr. Nava says that in the quarter after Cadillac Live launched, company research showed a spike in brand awareness. Surveys also showed that 65 per cent of Cadillac Live users had an improved opinion of the brand, and 80 per cent of users would recommend the experience. More than 1,300 test drives were credited to Cadillac Live.
Nissan has also been seeing some success in the short time Nissan Studio has been online. Since it went live a little more than three months ago, 1.49 million people have taken a look at the Nissan Studio site. More than 46,000 guests have participated in the “one-to-many” (group) sessions, while 1,453 visitors chose a one-to-one session.
Oumar Dicko, chief economist of the Canadian Automotive Dealers Association (CADA), says the shift to online interaction in the Canadian dealer network has accelerated with the pandemic restrictions. But given the substantial amount of money people spend on their vehicles, he thinks they’ll still want to see the car in person before they commit.
“Of course, you’ll have consumers that want to conduct 100 per cent of their purchasing online,” he says. “But you’ll have many more consumers that still value the touch and feel of the car, so a brick-and-mortar showroom will still be important.”
And that’s fine with Mr. Nava and Mr. Paterson, who both agree the goals of their online showrooms have never been to exclude dealers, but rather to help them find potential buyers. As these experiences show tangible success, Mr. Dicko believes other brands will likely develop similar units. The U.S. arm of Cadillac has already adopted Cadillac Live, while Chevrolet has a virtual showroom in the United States, Chevy MyWay, that is being evaluated for use here in Canada.
“I think we’re going to see customers that want to conduct their business online,” says Mr. Dicko. “And as an industry we need to think hard about that and look at ways to serve these consumers. I think in the coming months and coming years, I think we’ll see more and more programs like these digital showrooms in Canada.”