April 23, 2007 – Internet’s primary function: marketing or sales?

Even as U.S. online sales continue to climb, powersports dealers are split over whether the Internet should become mainly an additional retail outlet or merely an extra marketing avenue. As one dealer put it, “a glorified Yellow Pages.”
Only 50 percent of dealer principals and top dealership officials view the Internet’s e-commerce possibilities as the primary purpose of their dealership’s Web site, according to a national survey conducted for Powersports Business.
And of those dealers who list their new unit inventory online, less than 30 percent sell new vehicles directly off their Web site, according to the survey done by Irwin Broh & Associates, a marketing research firm.
Many more dealers who were surveyed — 62 percent — are selling parts and accessories directly off their Web sites.
Still, the prevailing belief in most dealerships is the Internet should play a larger role in marketing than in sales. Ninety-six percent of those surveyed felt that marketing the store’s products and services should be their Web site’s primary purpose.
That belief comes despite news of rising
e-commerce sales. The U.S. Department of Commerce reported earlier this year that the nation’s 2006 fourth-quarter e-commerce sales of $29.3 billion had increased nearly 25 percent from the previous year quarter, far outpacing the percentage of total retail sales (4.6 percent).
Plus, most forecasts call for online sales to intensify in the future. A U.S. online e-commerce projection, compiled in 2005 and listed on the Commerce Department’s Web site, predicts the 2006 U.S. e-sales total will increase by 32 percent in 2008 and 63 percent two years later.
A fixture at dealerships
While the Internet isn’t as common as the cash register, it is playing a part in most dealerships. Eighty-seven percent of the dealers surveyed said their dealerships have Web sites.
Most dealerships are also updating their Web sites frequently. Nearly 40 percent of dealer officials said they’re updating their sites on a weekly basis, while a few less are doing it daily (31 percent). Far fewer are updating their sites only monthly (20 percent) or less frequently than that (10 percent).
What affect the Web sites are having on dealerships is hard to tell since dealership officials report a wide variety of hits per month on their sites. The number of hits per month varies from a couple hundred all the way up to 1 million or more.

Online sales
How dealerships handle online sales is as varied as the level of importance the dealer places on e-commerce revenue. Of those surveyed, 55 percent said they have one or more regular salespeople handle their online sales, while 44 percent said they have an online sales specialist.
That percentage doesn’t look like it will be changing significantly in the near future because only 21 percent of the dealership officials said they’re expecting to hire a full-time employee that will be dedicated to online sales in the next year.
The difficulty dealers are having in converting online leads to actual sales could be why more dealer principals aren’t willing to pay for a full-time online sales specialist. The surveyed dealers who said they are receiving at least 50 online leads per month are converting only 17.7 percent of those into sales.
The dealers who are receiving at least 100 leads per month are faring only slightly better, converting 23 percent into sales.

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