LAST UPDATED: Monday, May 4, 2020
For the last six weeks we have been analyzing the impact of COVID-19 on consumer behavior and dealer performance across Cars.com, Dealer Inspire, and DealerRater. In our last update, we were able to report that the rate of decline in dealer leads and sales had slowed to a stop, and we used our algorithm to predict the beginning of a sales rebound with a 10-day sales projection.
Today we are pleased to report that our projection was accurate within a very close margin of error, and that we are continuing to see strong signals in our data to make another positive projection for dealer sales over the next 10 days.
While things are still far from back to normal, the continued upward trend indicated that we are heading in the right direction. Let’s take a look.
Powered By Roxanne™
The following data insights are powered by Dealer Inspire’s patented Roxanne® attribution pixel, which tracks all key events anonymous shoppers take on Cars.com, DealerRater, and over 3,500 Dealer Inspire websites nationwide, providing a significant sample size of approximately 65 million monthly shoppers.
SALES PREDICTION VS. SALES RESULTS
By tracking shopping and sales activity across the entire CARS network, forecasting on future consumer behavior is becoming possible. Using various leading indicators and input sources, we’ve used a neural network to model future sales performance. In our last report on April 13, we charted a relatively significant increase in nationwide sales over the next 10 days into the future. Because DMS reporting data is a lagging metric, we needed to give it an extra week to be sure, but the results are in.
4/13/20 SALES PREDICTION RESULTS
Roxanne™ Consumer behavior types of Website Bounce, Window Shoppers, and Engaged Shoppers.
Above you can see the trendline from mid-February (before COVID-19 impacted consumer behavior) until the back half of April when we expected sales to begin rebounding. Zooming in to that period will give us a better look at development.
With an R^2 value of 0.93, that’s pretty dang close. By looking carefully at not just consumer behavior as a whole, but at the Shopper Classifications* identified by Roxanne®, we’ve been able to identify certain key behaviors that, when taken in aggregate, provide a powerful modeling platform not just understanding existing consumer behavior, but predicting future behaviors as well.
While this is an extremely exciting step in understanding the inner workings of the automotive industry’s market forces, it can’t be overstated that without large market upheavals like national shelter-at-home mandates, we would never be able to inspect our models and challenge assumptions like we have over the past several several weeks. While we all face uncertainty, with some irony it’s precisely that uncertainty that has given us more insight than ever before.
What Are Roxanne™ Shopper Classifications Again?Digging deeper than lead activity, we are able to measure the intensity of on-site shopping behavior by monitoring granular shopping actions — such as viewing and clicking site elements that indicate intent to purchase — with our patented Roxanne™ Event Tracking. Each anonymous visitor is then classified into a type of shopper, giving our team and partners a view into what percentage of their traffic is likely to purchase soon.
THE SIGNAL IS GROWING STRONGER
As we look forward, we’re continuing to see signs of consumer enthusiasm for near-term car buying as some of our most important metrics across CARS are on the rise.
CARS DATA PULSE
Dealer Website Traffic, Cars.com Traffic, and DealerRater Review Volume
From more interested shoppers entering the market on Cars.com, to more serious shopping behavior on dealer websites, to more engagement and reviews on DealerRater, there are more consumers entering and moving through the sales funnel towards our local dealers.
DEALER WEBSITE LEADS (NATIONWIDE)
4/30/20 Dealer Inspire Network Sites
A key callout here is leads: submissions are picking up across dealer websites across the country, further indicating that hopefully, especially with Memorial Day around the corner, buying activity will grow in the near future.
PREDICTING THE NEXT 10 DAYS
But we also want to see what the near-future might hold after the success of our last forecast. Taking all of these inputs into our modeling algorithms, we have a new projection charting the first few weeks of May.
NATIONAL SALES MODELING [+10 DAYS]
4/30/20 National Auto Sales Forecasts, powered by Roxanne®
While perhaps not as dramatic as the previous period, the data still clearly indicates the industry is continuing in the stages of a rebound — which is supported by Roxanne’s strongest leading indicator for vehicle purchases: Engaged Shoppers — those buyers who we see across networks are in the final stages before making a purchase decision — are up +5.35% WoW across all of DI sites.
NATIONAL SALES MODELING [+10 DAYS]
4/30/20 National Auto Sales Forecasts powered by Roxanne® (detailed)
Our models aren’t showing a statistically-significant change for almost any state except 4:
|1. Mississippi||▲ 100.00%|
|2. West Virginia||▲ 100.00%|
|3. Massachusetts||▲ 78.12%|
|4. California||▲ 48.89%|
All other state models predict no statistically significant changes to sales volume over the next 10 days.
Both the reports and models are encouraging, but we’re still in the early stages of understanding the extent of this rebound. While signs point to a surge due to Memorial Day Sales Events and pent-up demand, it will not be an easy road returning to pre-covid levels — so it’s critical that dealers adapt their digital strategy and customer experience for this environment long-term. And insight on how we might do that comes from our friends at DealerRater®.
Note: In our next blog we will review the results of these sales predictions and fine-tune our modeling to project the following week.
DEALERRATER®: THE REVIEWS ARE IN
As a Data Scientists, quantitative data sets allow us to infer stories, but analyzing qualitative data lets us unpack stories that are already being told.
With the backdrop of COVID-19 a key connection between dealers and customers was abruptly shut off: beginning March 20th and for a period of approximately 5 weeks Google suspended review submissions through Google My Business™. DealerRater® however never stopped collecting, and has posted over 56K reviews for dealers in the last 30 days alone, providing a third dimension for us to measure not just overall industry activity but consumer sentiment. As expected, DealerRater review volume nicely mirrors the trends we see from Cars.com and Dealer Inspire national traffic:
DEALERRATER REVIEW VOLUME
National Automotive Reviews
But a powerful insight comes when we consider what consumers are actually saying in those reviews. To better understand how the Coronavirus is impacting the consumer experience at dealerships, we filtered through the 80K+ reviews left by customers since February and the early days of COVID-19 to see what key ideas, if any, were emerging among car-shoppers.
Drilling down into the data, the vast majority of dealers who are providing online solutions during COVID-19 appear to be doing it the right way — and customers are grateful — as positive reviews related to COVID related-terms outstrip negative reviews nearly 30 to 1:
When we look closely at the most commonly used terms in those reviews, the themes are clear: customers are focused on delivery, cleanliness, and overall safety measures.
While it may seem like a no-brainer, as our industry adjusts to home-shopping behaviors we can’t forget that the customer’s driveway is the new showroom experience, and the moment of home delivery is just as crucial for building long-term loyalty as any in-store delivery process. While most are doing it right, it’s critical we all inspect the expectations we’re setting with shoppers across our digital platforms.
Just because delivery isn’t happening on our lots, doesn’t mean the experience is outside our control.
THIS IS JUST THE BEGINNING.
While we all can afford to be cautiously optimistic about the coming weeks, we still have a long road ahead of us until the active shoppers and sales get back to pre-coronavirus levels. Together, we have to adapt by executing more of the car buying process digitally for the foreseeable future. This is a critical time to focus on:
- Being digitally visible to in-market shoppers with strong merchandising, giving consumers the details and vehicle photography to make confident decisions online.
- Providing shopping tools that allow consumers to easily go deeper into the buying process from home, including quickly narrowing their search and determining their personalized payment plan.
- Being available to home shoppers with the ability to walk them through the vehicle and the buying process remotely, whether over the phone, texting, or video chat.
As your partner, we are here to help future-proof your dealership for uncertain times like these. Do not hesitate to reach out to our team to discuss deploying strategies and solutions that will work for your dealership’s approach to serving customers over the coming weeks and months.