Online auto industry shakes up as consumers shun e-commerce

As consumers continue to lean towards trusting eCommerce channels to complete their car-buying journey, the online car sales industry is changing.

For example, Bloomberg the private equity firm announced this week Thomas Bravo is considering selling the Canadian digital automotive marketplace TraderWhich one acquired in 2016. The company’s value could be $2.9 billion or more, including debt.

AND test With Cox Automotive found that while 50% of car buyers completed at least some steps digitally in 2023, only 7% did so exclusively online. These shares skyrocketed to 85% and 16% respectively for buyers of new electric vehicles.

Online car sales companies often struggle to achieve profitability, leading to constant market upheaval. Plus, with e-commerce giants like Amazon as you enter this space, it becomes increasingly difficult to compete. Already adoption The number of car purchasing trips in omnichannel sales is constantly growing.

“We continue to see continued rollouts of ours multichannel “sales experience” CarMax CEO and President Bill Nash he told analysts during the company’s fiscal first-quarter 2025 financial results conference call on June 21. “Approximately 57% of retail sales in the quarter were omni sales, compared with 54% in the prior year.”

He added that eCommerce transactions consisting of the only 14% of the company’s unit retail sales.

Even younger consumers are still looking for a hands-on, on-site shopping experience, even for a large purchase like a vehicle.

“We recently did a study and most young people Actually want to finalize the purchase a vehicle in person in the living room, which was a bit of a surprise for us” Rebecca Lindlandthe company’s senior director of data and industry insights Cars.com, he told PYMNTS in an interview last month. “But we think part of it is that you still want to have the chance to touch, feel and test drive your vehicle. (…) Younger consumers, especially, still want to experience what it means to go to a dealership and look a person in the eye – that sense of authenticity.” .

The automotive industry is adopting omni-channel solutions faster than other retail categories.

PYMNTS Interview “Global Digital Shopping Index 2024: US Edition”, created in cooperation with Visa Acceptance Solutionsrevealed that in retail, only 1 in 5 consumers prefer to shop in brick-and-mortar stores using digital technologies.

Data from the February/March installment of the PYMNTS interview “New Reality Check: Paycheck to Paycheck Report” revealed that for many consumers, car costs are a key concern. studies A survey of more than 4,200 U.S. consumers found that 27% of them said vehicle-related expenses had a large or very large impact on their budget over the past year.

In addition, the April edition of the report “Why 60 Percent of Generation Z’s Paycheck to Paycheck” revealed that 11% of Gen Zers listed purchasing a car as their top financial goal.

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