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Merchandising Strategies from Online Disruptors

Merchandising Strategies from Online Disruptors

Online auto retail disruptors such as Carvana and Vroom continue to provide franchise dealers with competition in the pre-owned market. Although inventory shortages have made it challenging for all auto retailers this year, these “disruptors” continue to steal market share. Why?

Pre-pandemic, I would have said it was because they offer a pure digital retailing experience, which is appealing to a certain percentage of customers. But these days most brick and mortar dealerships offer the same capabilities. The concept of buying a car online, completing the paperwork remotely, and having a vehicle delivered is no longer that new or novel. That shift has already happened, and most dealerships have made sure to catch up.

Instead, the appeal lies in the online disruptors’ marketing and merchandising strategies. Almost universally, their advertisements play on consumer fears around the traditional car-buying experience. Whether justified or not, consumers hold long-held beliefs that auto dealers will take advantage of them. This marketing strategy is very effective, and as a result, many car shoppers decide to look to these companies’ sites when they start their car-buying journey.

Once on their website, consumers are then exposed to a brilliant merchandising strategy: Emotion sells! Disruptors do a much better job of merchandising their vehicles than the vast majority of auto dealerships. The goal of merchandising is to get the consumer emotionally attached to a vehicle without ever visiting the physical store.

This is the key to the online disruptors’ success. They use technology that allows car shoppers to research specs and view an interactive, 360-degree presentation of the vehicle. Disruptors are also transparent with pricing and provide a vehicle inspection report. They provide enough information to make consumers want and buy the car, sight unseen.

In a nutshell, this is their marketing and merchandising strategy: Talk negatively about the traditional car-buying experience, and once the consumer is on their website, use interactive technology designed to create an emotional attachment to the vehicle. That’s it.

There is no reason why dealers can’t do the same thing. When merchandising, it’s important to let car shoppers experience a vehicle online the way that they want to experience it, not the way that we want them to. For every vehicle, post the following on your VDPs:

Images. Use a minimum of 17 actual photos of the vehicle (not stock photos). If the vehicle has aftermarket features, this number should be higher. Images should be posted within 24 hours of the vehicle being ready to sell. If you can’t create an internal process to get photos taken in a timely manner, outsource this task to a lot services company.

Inventory Videos. Choose or hire someone—whether an internal employee or external company—who can give a dynamic and energetic video presentation of the vehicle. Have them talk while walking around the vehicle with a camera (or add the audio layer later). Once you have a video, post it on the VDP but don’t stop there. Make sure it’s distributed on every online touchpoint.

If you absolutely do not have the resources to create inventory videos, use a product that creates stitched-photo videos from your inventory photos. Even these have a 70 to 75 percent completion rate.

Interactive 360 Spin. Now the consumer has seen your vehicle presentation and read the specs, let them take control of their own buying experience. The online disruptors paid millions of dollars for this technology for a good reason. Consumers love interactive videos! This technology allows car shoppers to spin the car around, view it from all angles, zoom in on features they are interested in, and click on hot spots to learn more information.

Auto dealers spend a lot of money to drive traffic to their websites. Before spending another dollar in marketing, make sure your online merchandising experience rivals the online disruptors. Provide car shoppers with the tools to control their own buying experience and generate an emotional attachment. Dealers that can do this effectively will outsell the disruptors every time.

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As National Sales Director of FlickFusion Video Marketing, Evan leads the sales team and builds partnerships with value added resellers (VARs). Prior to joining FlickFusion, Evan worked in Internet Sales at Shottenkirk Chevrolet Waukee in Iowa. Evan is passionate about the power of video and works diligently to keep clients up to date with the latest trends in video and digital marketing.

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