A Look Back at Automotive Retail in 2017 Reveals the Path Forward for 2018
When we look back at 2017, the best word to capture the year in automotive retail is fascinating. Between the drop in the record-setting 2016 sales figures to the uptick in vehicle demand from the disaster-ravaged states in the aftermath of Hurricanes Harvey and Irma, this past year’s seasonally adjusted annual rate (SAAR) was nothing short of a rollercoaster ride.
When it came to online shopping behavior, Dealer.com, which operates 62% of U.S. franchise dealership websites, captured key insights from its proprietary DataView reporting that underscored the fascinating year:
- Presidents Day was both the most popular holiday and day of the year for vehicle shopping. In fact, four of the top five shopping days of the year fell during the week of Presidents’ Day weekend. The one outlier in the top five was Friday, March 24, which coincides with Friday being the most popular day of the week for vehicle shopping and March being the most popular month for car shoppers in 2017. All of this took place in Q1 2017, despite the dip in monthly sales figures.
- Texas and Florida were two of the top five states for car shopping this year, likely a tie-in to vehicles lost to Hurricanes Harvey and Irma. The state with the least amount of vehicle shopping? Wyoming.
- Consumers love their daytime car-shopping window: 2 p.m. ET/11 a.m. PST was the most popular block of the year.
Going into 2018, confidence is still high across the industry for another healthy sales year, particularly from dealers themselves. In our recently released Cox Automotive Q4 2017 Dealer Sentiment Index (CADSI), U.S.-based dealers were optimistic about the first quarter this year, and believe recent inventory issues have begun to subside. The CADSI also indicated, however, that both franchise and independent dealers continue to feel pressure to lower prices, experience high costs of running their business, and report weak customer traffic.
Let’s take a moment to address that third caution flag — weak customer traffic — as a New Year’s resolution, so to speak.
New year, new traffic
Make no mistake, the automotive industry should continue to hone in on online storefront traffic to generate sales leads. Because we’re in this post-peak sales period, however, we need to reframe our core belief that the quantity of sales leads eclipses all other key performance indicators (KPIs) when it comes to profitability.
It’s just not the case anymore. Instead, dealers should be focusing on attracting quality over quantity — car shoppers with a higher intent to purchase a vehicle — when it comes to lead generation in the sales funnel. How can dealerships conquer this New Year’s resolution of improved quality of online traffic? The key to 2018 digital marketing ROI is through attribution, which uses data to decipher and predict shoppers’ purchasing intent, and shows how to use that information to maximize ROI.
Multi-touch attribution models help track the series of digital touch points from shoppers as they work their way toward a purchase, and assigns the respective touch points a value. This lets dealers see what campaigns are resonating most with their customers, and allows them to adjust accordingly. The coming year will bring another healthy clip of sales across the industry; however, the key to your success for the year will be through digital attribution to identify and connect with those quality car shoppers. Here's to 2018!
James Grace is the senior director of analytics products at Cox Automotive Media Solutions Group.