Francesco Policaro, CEO of the Policaro Group, which includes Policaro BMW in Brampton as well as Porsche and Lexus dealerships, has seen the future. Buying a vehicle online is here to stay.
The statistics are staggering – online shopping as a result of COVID-19 has doubled, according to Statistics Canada. E-commerce sales hit a record $3.9 billion in May, a whopping 110.8 per cent increase compared to May 2019. Food, furniture, clothing, health and personal care, sporting goods, music – we understand those categories. But cars? Especially luxury cars, like one from Policaro BMW, a sizeable investment. But there continues to be an ongoing shift in people’s buying habits. No one has a clue when all of this will settle.
A real estate developer told me the other day condo sales in Toronto are down mostly because of COVID-19 concerns. People are fearful of entrance halls or elevator rides along with strangers up multiple floors. Condo buildings in the core that allow short-term rentals have suffered. That’s because owners there or people thinking of buying into those buildings don’t like the idea of nightly guests coming and going. Overall more people are taking advantage of low interest rates and are moving to the suburbs. Is this a permanent shift, or shorter term, tied more to the availability of a vaccine or just getting more used to a pandemic lifestyle in the city?
Same thing with cars. People are skittish about walking into busy dealerships, and people like Policaro expect that to continue. He also expects the convenience of buying a car online, like from Policaro BMW, to last permanently, well past COVID-19. He points to a Google study – 59 per cent of consumers said following the COVID-19 lockdown they would purchase a vehicle online if the option existed.
Self-service online test drive bookings
We remain unconvinced, because luxury cars are meant to be touched, felt, sat in, driven, all before buying. Policaro says he has found a convenient, secure, contact-free way of appeasing all areas of the buyer market. At his shop you can buy in-store, in-person (with strict safety measures). You can buy partially in-store, partially digital (virtual sales consultation, digital paperwork). Or there’s the newer wave fully digital: including self-service online booking of a test drive, with no sales consultant in the car. Regarding Luxury spoke with him about all this.
When buying a car virtually, how do buyers of luxury cars differ from other buyer categories? How do their expectations differ?
The same differences that apply to a traditional vehicle purchase, apply online. Luxury buyers covet more than just the end product. There are some things that our customers can always expect from the Policaro Group. The delivery of a unique, personalized and superior experience are key.
Luxury buyers may also feel that a premium experience should be on their time and their terms with an expectation that we save them time while delivering on this experience.
I am old school. Before I make that level of investment, I need to touch and feel the car, drive it, experience it. Luxury cars especially are for drivers. You can’t get a lot of substantial feedback about a car over a Zoom call. Or can you?
You are correct that most buyers, regardless of age, like to experience the vehicle in person. This holds true with luxury or premium vehicles, more than any other segment.
A luxury vehicle is less of a commodity than a main line car. One reason for an in-store visit is that customers of luxury cars want to be immersed in the brand, with a personalized experience.
Image: Pexels, by Negative Space
While a video call can assist in facilitating the transaction, we find the majority of customers still visit the dealership at some point during their journey, that is why we have provided 3 different options to meet the needs of our luxury customer.
How do you convince older drivers more set in their ways to come to the virtual side? Or is the focus more on millennials?
Pre-COVID, 83% of buyers commence their journey online, while only 6% place a deposit for a vehicle online. The shift towards digital was ongoing prior to the pandemic but slow to adaptation. What we have seen now is a shift towards digital retail.
Our customers (including at Policaro BMW) want to complete more of their transaction online. Our focus isn’t really on millennials rather offering an omni channel approach to the customer journey, which is fluid, customizable and unique to our customer needs.
Do you expect this trend towards virtual for cars to continue to grow, and if so, why?
Absolutely! The reason the Policaro Group is so prepared now to bring these more modern experiences to life is because we could foresee this change needed even before the pandemic. We have seen the growth and development of immersive virtual experiences in other categories such as the medical field and B2B conferences.
We believe that as technology continues to improve, more customers will gravitate towards a more digital retail experience.
It is more convenient, quicker and allows customers to make their own decisions. If you look at the traditional car buying experience, the dealership is in control of the information and the process. The shift to online allows customers greater access to information and control of their journey.
What are you going to personally miss about the one-on-one sales meeting, with a luxury car?
In the short term, the process will evolve slowly and allow for better efficiencies at the dealership level. If I do envision a time when all purchases will be done online without any human interaction, then I will definitely miss the personal relationships fostered during the car buying process.
But that doesn’t mean we can’t make our customers feel the specialness of purchasing a vehicle, like the excitement of their vehicle being delivered to their home, as they track its delivery.