maximize sales to the digital shopper

Maximize Sales to the Digital Shopper

Presented by Marty Blue, CarGurus SVP of Business Development September 14, 2016

Agenda •  How Shoppers Use the Internet to Find Cars

•  Taking Advantage of the Pre-Owned Market

•  Best Practices in Used Car Sales

•  Competitive Pricing

•  Savvy Merchandising

•  Targeted Marketing

Car Shopping Has Moved to the Web

of car buyers use the internet in their search for a vehicle

Source: DMEautomotive

80%

The average auto shopper!spends 12+ hours!performing online research.!

Source: Google

3 of the 5 most-visited websites are search engines

Source: Alexa, Fleishman-Hilliard

89% of consumers conduct searches before making a purchase

Most Shoppers Begin With Search…

…Then Progress to Auto-Specific Websites…

•  80% of shoppers visit at least 3 websites

•  27% visit 7 or more websites

16%

34% 18%

27%

5%

1 to 2 Sites 3 to 4 Sites 5 to 6 Sites 7+ Sites None

When buying a car, how many websites do you typically do research on?

Source: CarGurus survey, Apr. 2015

The serious shopper visits only

Source: McKinsey

…While Store Visits Happen Only at the End of the Process

1.6 dealerships

Source: Borrell Associates

Dealers Are Shifting Ad Budgets to Online Channels

Digital share of dealer ad budgets

43%

2012

67%

2015

Source: Google

Initial Info-Gathering

Narrowing the Search

Contacting Dealers

Conducting Test Drives

Internet searches OEM sites

Third-party shopping sites

Third parties Dealer sites

In-store visits

19 digital touchpoints, on

average

There Are Multiple Opportunities to Reach Shoppers Online

Both New and Used Sales Set Records in 2015

Graphic – 17.5 million new car sales, 38.3 million used car sales

Source: Edmunds

17.5 million sales

38.3 million sales Used Car

New Car

Yet In a Low-Wage-Growth Environment, New Cars Are More Expensive Than Ever

The average new-vehicle transaction price rose 2.5% in 2015 to $33,188

Source: Edmunds

Shoppers Turn to Late-Model CPO Vehicles In Search of Value

•  CPO sales hit a record in 2015

•  2016 is even stronger: 1.558 million CPO vehicles sold YTD vs. 1.467 million Jan.–Jul. 2015

Source: Automotive News

Focus on Value Leads Shoppers to Conduct More Research

Average research time has gone up 3 hours since 2013

Source: Google

Used-Car Shoppers Conduct Research on Multiple Devices…

•  90% of used-car buyers shop on multiple devices

•  vs. 85% of new-car buyers

Source: IHS Automotive

…Are More Open to Different Kinds of Vehicles…

55% of used-car buyers consider both new and

used vehicles

36% of new-car buyers vs.

Source: IHS Automotive

…And Consider More Vehicles

Average number of searches run by CarGurus new-

vehicle shoppers

2.7 Average number of

searches run by CarGurus used-vehicle shoppers

6.4

Source: CarGurus data, Aug. 2016

Pricing Marketing Merchandising + +

Elements of Used Car Sales Success

Price Transparency Is an Expectation

Cost of Failed Purchase

Nee

d fo

r Tra

nspa

renc

y

of shoppers won't buy a car without transparent, third-party pricing data

78%

Source: CarGurus survey, Dec. 2015

Price Remains a Focus As Shoppers Narrow Their Search

What vehicle detail are you most likely to filter for when conducting a vehicle search?

50% 26% 8% 8% Price Mileage Options Color

Source: CarGurus survey, Dec. 2015

Have you ever used your mobile device to look up pricing while at a dealership?

38%

39%

24% Yes

Not yet, but I plan to

No

Price Comparisons Even Take Place at Point of Sale

Source: CarGurus survey, Apr. 2015

Use Pricing to Expand Your Visibility

•  Price transparency does not set up a race to the bottom

•  Instead, fair market pricing keeps you in shoppers' consideration set

•  On CarGurus, appearing on first SRP (Great/Good/Fair deals) increases VDP views by 40%

Source: CarGurus data

Highlight Prices In Your Advertising

Attract More Lead Submissions With Competitive Pricing

90% of CarGurus leads come through on fair or better deals


For Auto Shoppers, Detailed Vehicle Info is an Expectation

Top activities on CarGurus SRPs/VDPs:

Viewing photos Filtering by price, options, and color


More than 80% of the information

our brains receive is visual

Merchandising Feeds Consumers' Need for Visual Information

Source: NIH

Upload Compelling Listing Photos to Attract Attention on SRPs

One photo adds a 15% boost in conversion

(vs. no photos)


Think from the shopper's perspective: which features would lead you to buy one vehicle over another?

Maserati GranTurismo sport seats

Capture Photos of Valuable Features

What Not to Do: Desktop

•  Bad framing in listing photo

•  No clear feature focus in subsequent photos

•  Glare in windshield and hood

•  Car doesn't look appealing – why should I buy?

What Not to Do: Mobile

•  Listing photo is stretched

•  Clutter on photos (badges, contact info)

•  American flag motif?

Optimize Listing Copy, Too

Clear messaging •  Seek to establish each vehicle's unique selling points

Compelling details •  Provide numerical facts and describe high-value vehicle features

Conciseness •  Keep things short and sweet

Ensure You're Visible on Mobile

Fast, functional mobile website •  40% of people will leave a webpage that takes more than 3 seconds to load

Mobile advertising/retargeting

•  Mobile ad spending has not kept up with the amount of time people spend on mobile: a hidden opportunity

A streamlined contact process

•  Locating stores/checking hours is the top mobile retail activity for all age groups

Sources: eMarketer, Google

Digital Marketing Is Essential for Reaching the Connected Shopper

Marketing essentials:

•  Expand your reach with partnerships

•  Engage in-market shoppers with email marketing

•  Drive site traffic with digital ads

Partnerships Broaden Your Reach

•  Partner with sites that invest time and money in marketing (so you don't have to!)

•  Gain additional exposure to partners' qualified audience

•  Promote your brand, share contact information, and highlight specific listings

Aim to Influence In-Market Shoppers •  Partnership options: local dealer associations, inventory providers, third-party

shopping sites

•  Third-party sites are much more influential than traditional media (TV, newspapers, radio)

Which online sources do you use to look for vehicle information?

Source: Google

Email Marketing Targets Low-Funnel Shoppers Tips for Implementing •  Utilize low-cost services like MailChimp that provide database management

and easy email automation •  Collect email addresses in various locations: from lead submissions, on your

website, and in your store

Test and Iterate •  Subject lines •  Day and time •  Calls to action

Compare Email Performance to Industry Benchmarks •  Stay top-of-mind with shoppers by emailing them

on a regular basis

•  Sending more email does result in less engagement per email

•  Travel and transportation benchmarks:

•  20% open rate

•  2.2% click-through rate

Source: MailChimp

Digital Ads Are Attracting More Ad Dollars

Auto industry digital ad spend rose 22%

in 2015

Only one industry (retail) is increasing digital ad spend more than auto

Source: eMarketer

Online ads reach shoppers when they are most susceptible to influence

•  Searching for information

•  Viewing products •  Conducting

research

Online ad spending, 2014-2018

*Other: classifieds, directories, lead-gen, email ads and mobile messaging ads

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2014 2015 2016e 2017e 2018e

Search

Display

Other

Both Search Ads and Display Ads Have a Role to Play

Source: eMarketer

Programmatic Display Already Takes Most Auto-Industry Ad Spend

72% of display ads will be bought programmatically by 2017 46% year-over-year

rise in spend

Sources: IgnitionOne, Adobe

Pricing Marketing Merchandising + +

Elements of Used Car Sales Success

Questions?

Marty Blue [email protected] To learn more about CarGurus: Call us at (855) 971-1145 Visit https://www.cargurus.com/signup/IS20G9