Modern retail businesses have to evolve and adapt or they risk becoming extinct, Google strategy planner automotive, David Tully, told AADA National Dealer Convention delegates.

Mr Tully said the key lesson Dealers should take away from his presentation was the need to “bring the dealership to the customer” via the online experience.

He gave the example of Blockbuster, which at its peak operated 370 stores in Australia but failed to adapt to the changing market, turning down the opportunity to buy Netflix based on the spurious reasoning that its customers wanted the social experience of visiting its store.

“We’re seeing one common trend: retail outlets are closing,” said Mr Tully, noting that even giants such as Myer, Target and McDonald’s were closing stores, not because they were failing businesses but because they were doing so much of their communication with customers online.

“Businesses outside of automotive are shifting their models to cater for what their customers want.”

Google conducts an annual survey of people who have bought a car in the past year. It found that buyers visited just one to two Dealers before purchasing, compared with five just a decade ago.
Six out of 10 Australians are test driving one vehicle at most. They are doing their homework online and know what they want before they ever set foot in a dealership. Seventy five per cent of the ‘research journey’ is spent online. That’s why Dealers must strive to ensure they provide the best possible online experience to prospective customers.

“The online experience determines whether the customer will visit your dealership,” Mr Tully said.

“Customers are not just comparing you to other Dealers, but to every other business online.”

The online experience should include videos, reviews, and information to help the consumer discover the vehicle best suited for their needs. Comparison data, with figures and specifications, available online, can help a consumer choose their make and model and, therefore, which dealership to visit.

Dealers should ensure their marketing mix matched their customers’ behaviour, and value and review online metrics as frequently as they do financial statements.
Physical stores still crucial

Retail stores might be experiencing a reduced number of visits but the physical experience remains as important as ever. That’s why Apple is paying $3.9 billion in leases for its stores this year, and why Samsung just opened a 17,000 square metre store in New York in order to compete.

“The customer craves an experience,” Mr Tully said.

“They don’t want to be sold to.”