90% Individuals Research Online Before Buying A Car: Google-Kantar Report

A recent research done by Google and research firm Kantar in over 25 countries has revealed that the average car buying decision is now online and video driven, more than ever before.

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Gearshift 2018 says that today there are about 6-8 steps in the average car buying process

Highlights

  • About 64% of car buyers start their research online.
  • 47% of the car buyers begin with search engine while 12% watch videos.
  • 80% of the respondents were first time car buyers.

Online is where the world is and online is where automotive manufacturers are nowadays building up a strong presence too. Social media and technology has empowered the customer and this is something that the auto companies understand as well. With more options and information at one's fingertips, an aspiring car buyer can get almost all the information on the internet before he or she actually steps inside a car dealership. And Google, along with Kantar, a firm specialising in market research has released a report which documents this exact phenomenon.

Initial Research

Google says there are about 4-5 steps in the average car buying process. First of course, comes the intention to buy a new car which is followed by research. Then, the car buyer goes on to make a consideration set, which might have 2-3 options. After this comes the research and all the value addition that is created by auto manufacturers along with social media sites and advice from family and friends as well.

About 64 per cent of car buyers start their research process off-line while 36 per cent start their research process online. When it comes to online research, 47 per cent of the people begin with a search engine while 12 per cent people want to first look at the videos of the cars in their consideration set. 14 and 15 per cent people visit the manufacturer website and the dealership website respectively, while only 2 per cent of new car buyers log on to automotive publications for research purposes. After all of this comes the actual purchase where the customer moves from online to the dealership and makes the actual purchase.

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With online research, 47 per cent of the people begin with a search engine

Kaushik Prasad, GM, Consumer Marketing, Ford India, says, "The process is kind of the same but what's really changed is the way the consumer is researching for his vehicle and today, a bulk of the research happens online. In fact, the Google Gearshift report, that is the last one, indicated about, influence of upwards about close to about 90 percent and of course, channels like search and display and videos play a very critical role. So, while the process for hunting for a vehicle remains the same, research has moved online and as consequence of the research, finally, the consumer, he or she makes the choice to walk into a showroom, take a test drive and then, the next steps, and what's also changed is the number of showrooms, that the consumer is walking into. He is walking into lower number of showroom. So, that's kind of some of the changes that are happening right now."

Consideration List

After the initial research, comes the consideration list. The report says that 80 per cent of the respondents were first time car buyers and about 57 per cent people weren't brand loyal, meaning they were ready to buy a car from a different manufacturer than their last one. About 67 per cent of the new car buyers take about two months, from initial research to the final purchase and 20 per cent take less than two weeks for the same process. The report also finds that the average car buyer zeroes in on two manufacturers before his/her final purchase and about 7 per cent of the respondents will change their preference through the final car buying decision. This means that they started off with one manufacturer in mind and bought a model from another manufacturer.

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The biggest touchpoint for offline research is family and friends

Key Insights

About 90 per cent of the respondents said that they went online for information at some point in the buying process and about 87 per cent researched on their smartphones, indicating smartphones are an important touchpoint. The biggest touchpoint for offline research is family and friends, constituting about 66 per cent of the total offline research and while friends and family is a key offline touchpoint the report highlights that incrementally, it has has dropped from 77 per cent in 2017 so in reality it is a 14 point drop.

Vikas Agnihotri, Country Director - Sales, Google India, Google India, says, "In terms of key highlights, you know, almost 90 per cent of the people who are in process of buying the car, start the journey on search and 80 per cent of them watch YouTube videos to get more information and in fact, the number has moved up from the last two years from about 46 per cent to 80 per cent and the third and most important development that we are looking at is the role that consumers and prospective consumers play in terms of going to the brand's site and dealers' sites which is about 56 per cent. So there is a lot more activity in terms of engagement and finding out more information. What we are also looking at is that the nature of information which is being sought is actually becoming deeper, more wider because I think the consumers are a lot more informed, curious and inquisitive and they want information at every touchpoint of the car buying journey which has come out very strongly in this report."

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About 82 per cent of first time car buyers watch videos online during their research

Importance of Videos

There is no doubting the importance of videos in today's car-purchase decisions! About 82 per cent of first time car buyers watch videos online during their research of the consideration set. About 80 per cent of new car buyers too have seen online videos to facilitate their decision making process.

Adding Value

Apart from the usual sources of information such as dealerships, online sites, videos etc. buyers today appreciate digital tools such as online car configurator, price and EMI calculator, total cost of ownership calculator and so on. People are also quite receptive to the idea of a 360 degree virtual reality tour of the car and 54 per cent of the respondents say that a virtual reality video could possibly replace a test drive as well.

Steffen Knapp, Director, Volkswagen Passenger Cars, Volkswagen India, says, "You have to really look at digitalisation as a 360 approach. Now the first thing is obviously in your product and you have to be completely connected, yeah! So customers today, spending a lot of time in their cars yeah, want to be seamlessly connected to their friends via the social media platform and they want to use their mobile devices on a constant basis in the cars. They want to have a predictable driving journey so when you are driving and you are in a traffic jam, you are automatically re-routed and so that its really that the product has to be completely connected and digitalised. And then, the complete sales and service journey have to be digitalised and the way how people are interacting are the purpose is not to be fancy but the purpose is to offer a simpler experience for the customers in the car."

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Virtual reality video could possibly replace a test drive as well

Final Purchase

Even with all the technology, the final purchase always happens at a dealership where one takes delivery of the car. But even then, people usually go online to search for the location of the dealership as well. In fact, about 60 per cent of people researched online to find the dealership. The average car buyer takes just about 2.2 dealer visits and 1.3 test drives to make their final decision. 69 per cent of new car buyers decide the final model only after one test drive.

Future of Car Sales

The Google Kantar research says that car purchase decisions could possibly move online like how one buys electronics, apparel and so on from online stores and get it delivered at home. 44 per cent of the respondents will be happy to consider online buying as an option. The key pros are convenience, prices and easy access.

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Source: Gearshift 2018: Google-Kantar Report

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