The New Shape of the Buyer Journey

Cox Automotive Buyer Journey Project ‘Wave’

The new shape of the buyer journey 2020

Cox Automotive Traditionally, consumers start with a set of potential brands and methodically reduce that number to make a purchase.

Awareness

The new shape of the buyer journey 2020

Familiarity

Consideration

Purchase

Loyalty

Cox Automotive Now, the consumer buying journey is more like a wave than a funnel

The new shape of the buyer journey 2020

Expertise in automotive and related research Worked for many leading brands in the category; incl. 60+ qual. and quant. projects over past 10 years

Jerry Berowne | Principal | FF2 MBA (UNSW), B. Sc. Psychology (London University) Over 20 years experience in research and strategy planning; solving marketing & business issues in a wide variety of categories.

Research background includes: Jigsaw Strategic Research, founder of Galaxy Research and Hub Insights. Previously in marketing management in both the UK and in Australia.

Previous agency experience includes: Strategy Planning Director for Saatchi & Saatchi (in both Los Angeles and Sydney), Group Head Strategy Planning for George Paterson Y&R Sydney.

Has contributed to marketing decisions for many blue-chip brands incl. McDonald’s, Toyota, P&G, Lend Lease, Clorox, …& many more.

The new shape of the buyer journey 2020

Contents 01. Introduction & opportunity

05. Active consideration

02. The research sample

06. Content for consideration

03. Consumers researching cars

04. Initial consideration

The new shape of the buyer journey 2020

07. Executive overview

01.

Introduction & opportunity

Customer journey is changing

• The consumer decision journey, 2009; USA data

• Path to purchase; USA, n = 1,980

“contrary to the funnel metaphor …the number of brands under consideration may now expand”

“…people don’t shop for cars by a simple process of elimination.”

The new shape of the buyer journey 2020

• Australian market • Wave research to test & validate these o/s studies for Australia

McKinsey Loyalty Loop “Consumers are moving outside the marketing funnel by changing the way they research and buy products.”

Avg. Number of Brands Sector

In initial consideration set

Autos

3.8

The new shape of the buyer journey 2020

Added in active consideration 2.2

Nielsen “When car shoppers are ready to buy, they consider twice as many cars as they did at the beginning of their journey. This presents a unique opportunity to influence buying decisions very late in the game”

The new shape of the buyer journey 2020

02.

The research sample: Who did we survey?

Who did we survey?

• Respondents from Dynata • Leading panel provider • Merger of SSI & Research Now

N = 1,200 20-69 years Carefully screened to ensure genuine respondents Buyers: n = 600

Intenders: n = 600

Both new & used cars

Both new & used cars

A robust sample & good quality data

The new shape of the buyer journey 2020

Research sample: Demographics Area

Age NT QLD 21%

20-34

Gender 26%

41%

WA 9% 35-54

SA 7% NSW 33% incl. ACT

Compare Aust. Pop’n: QLD NSW + ACT VIC TAS

20% 34% 26% 2%

SA NT WA

7% 1% 10%

VIC 28% TAS 2%

45%

54-69

59%

29%

Compare Aust. Pop’n:

Compare Aust. Pop’n:

18-34 35-54 55-69

Male Female

33% 41% 26%

50% 50%

Area splits reflects Australian population; gender and age profile from screening for buyers & intenders The new shape of the buyer journey 2020

03.

Consumers researching cars

How much time researching?

Buyers: No. of hours per week

Av. 11.1 weeks

30% 25%

Av. 3.1 hours per week

20%

Range from 13 to 34 hours*

15% 10%

Deciding to buy; i.e. spend the $

5%

Researching which car; considering brands & models

Finalising a deal

s+

Start

Purchase

5

hr

hr s 4

s hr 3

s hr 2

1h rs

0%

B9: When you were / are researching; on average, how many hours of research did you do / are you doing per week? Base: Buyers n = 600

The new shape of the buyer journey 2020

*Range calculation is weeks x hours per week: 4.2 weeks researching phase x 3.1 hrs. = 13 hrs.

11.1 weeks total process x 3.1 hrs. = 34 hrs.

B4a: How long did each of the following activities take, in weeks?

Base: Buyers n = 600

Importance of research activities “When you are / were researching, how important are / were each of the following research activities?

High

Internet research / car websites

Visiting dealers in person

Medium

Reading articles / reviews

Thinking about previous cars

Low

Talking to friends & family

Advice from mechanic or other expert

The new shape of the buyer journey 2020

Contacting dealerships

Importance of internet & dealer research “When you are / were researching, how important are / were each of the following research activities?

Visiting dealers in person

Internet research / car websites

BUYERS

BUYERS Important + Very Important

90%

Important + Very Important INTENDERS

INTENDERS Important + Very Important

90%

95%

Important + Very Important

90%

Both internet research and visiting dealerships important for all The new shape of the buyer journey 2020

3rd party / listings sites used by over 80%

Number of dealers visited Between 2 and 3 dealerships visited in the buying process Buyers: No. of dealers visited 35%

33%

30%

Avg. 2.4

28%

33%

Avg. 3.1

30% 25%

25%

25%

21%

20%

20%

15%

15%

The new shape of the buyer journey 2020

or

1

e

m or

B18: In total, how many dealers did you visit in person – over the whole car search process?

(Including the dealer you bought from) Base: Buyers n = 600

5

5

or

m

or

4

3

0% 2

0% 1

5%

e

10%

5%

C18: In total, how many dealers are you likely to visit in person – over the whole car search process? (Including the dealer you will buy from) Base: Intenders n = 600

12%

4

9%

13%

3

9%

10%

18%

2

35%

Intenders: No. of dealers likely to visit

04.

Initial consideration: Do they know which brand?

Do they know which brand?

Which brand is not fixed – for between ½ (buyers) and ⅔ (intenders) Buyers

Intenders No, did not know

Nett 54% Don’t know/ not sure

No, did not know

Nett 66% Don’t know/ not sure

20%

12% 34%

Yes, knew

46%

Yes, knew

34%

54% Not sure

B5 / C5: At the deciding to buy stage: Did / do you know the specific car brand that you are / were going to buy? Base: Buyers n = 600, Intenders n = 600 The new shape of the buyer journey 2020

Not sure

How loyal? – the opportunity Where was the brand you bought on your initial consideration list?

1/3 loyal, 1/3 pre-disposed; and 1/3 ‘outside’ the initial list

All Buyers Was not at all on the list

5%

A 'probably not'

5%

A 'maybe'

24%

A 'likely'

31%

A 'favourite' (top of the list)

35% n=

B6: You purchased a [BRAND]. At this (deciding to buy) stage, before research, where was [BRAND] on your initial consideration list? Base: Buyers n = 600 The new shape of the buyer journey 2020

600

}

34%

05.

Active consideration: How many brands?

Research and consideration Agreement from 72% of Intenders and 63% of Buyers

Strongly DISAGREE

The new shape of the buyer journey 2020

Somewhat DISAGREE

Neutral

Somewhat AGREE

Strongly AGREE

Researching stage question Questions B10b / C10b

Initial consideration question Questions B11 / C11

Toyota

Subaru

Hyundai

Audi

Volkswagen

Skoda

Nissan The new shape of the buyer journey 2020

How many brands considered?

Number of brands considered more than twice in the active research phase BUYERS: Avg. number of brands

§ §

Initial consideration set

2.5

Research (‘active’) set

6.1

Younger (20-44): Research set higher CarsGuide/Autotrader visitors: Both Initial & Research sets higher

The new shape of the buyer journey 2020

INTENDERS: Avg. number of brands

X 2.4

Initial consideration set

3.0

Research (‘active’) set

6.7

Research (active) consideration set: B10b / C10b Initial consideration set: B11 / C11 Base: Buyers n = 600, Intenders (Researching & Finalising) n = 424

X 2.2

How many brands?

Comparing other studies Average number of brands

Buyers & Intenders

Initial consideration set

3.8

2.8

2.7

Research ‘active’ set

6.0

X 1.6

5.0

X 1.8

6.3

Same pattern as overseas studies – validation of increased consideration set The new shape of the buyer journey 2020

X 2.3

06.

Content for consideration

The importance of content Lifestyle is clearly the most appealing content Seeing how the car fits with my lifestyle activities

Seeing / feeling a comfortable interior

A good-looking / stylish exterior

Buyers: Ranked no. 1

37%

20%

23%

12%

8%

Intenders: Ranked no. 1

38%

22%

18%

13%

7%

Interior scores higher for ‘Very Important’ than exterior.

B14 / C14: Please rank the importance for you of these, to get you looking at / considering different cars.

NB No graphics shown in question. Base: Buyers n = 600, Intenders n = 600 The new shape of the buyer journey 2020

Picturing myself being in / Talking / writing about driving how much people like the the car car

Influence of types of stories On these websites, which kind of stories influenced you to consider / look at a car? Stories about…

High

The brand

Safety features

Medium

New technology

The design(ers) of the car

Low

Locations can travel to in Australia

Advice from mechanic or other expert

The new shape of the buyer journey 2020

How the car fits with my lifestyle

Influence of types of stories Brand, Safety features, and Lifestyle the most influential Buyers

Intenders Influence aatlot Influence lot

Influence at a lot Influence lot

Influence somewhat

Brand

48%

42%

Brand

Safety features

50%

40%

Safety features

Fit with Lifestyle

43%

43%

60%

Fit with Lifestyle

45%

New technology

39%

Design(ers) of car

37%

45%

Design(ers) of car

38%

38%

Locations in Aust.

30%

47%

36%

21%

33%

63%

New technology

Locations in Aust.

Influence somewhat

22%

42% 48% 44% 38%

B17 / C17: On these websites, what kind of stories influence(d) you to consider / look at a car? Base: intenders n = 600 The new shape of the buyer journey 2020

07.

Executive overview

Overview Important for 95% of Intenders

N = 1,200

Introduction and opportunity §

The consumer journey is changing

§ §

Funnel to loop to wave Opportunity in Active evaluation

The new shape of the buyer journey 2020

The research sample

Consumer research

§ §

Buyers and Intenders Both new and used cars

§ §

Time investment; avg 11 weeks Internet research most important

§

Robust sample, carefully screened

§

Only 2-3 dealer visits

Overview 1/3rd buy outside initial list

Initial: 2.7

Seeing how the car fits with my lifestyle activities Buyers: Ranked no. 1

Active: 6.3

Intenders: Ranked no. 1

Initial consideration § § §

66% of Intenders don’t know brand New cars: stronger brand affiliation 1/3rd loyal

The new shape of the buyer journey 2020

Active consideration

Content for consideration

§ Research brings in new brands

§

Lifestyle the no. 1 content

§ Same pattern as overseas studies

§

Interiors very important

§ Young (20-44): Higher active set

§

Stories on Brand, Safety & Lifestyle

Cox Automotive Consumers increase the number of brands they consider, as they research cars Initial consideration set 2/3rd Intenders don’t know which brand

Start

The new shape of the buyer journey 2020

X2.3

Active consideration set

Internet research important for 90-95%; 3rd party sites used by 80%

Total process: Ave. 11.1 weeks, with 13 – 34 hours of research, and 2 – 3 dealer visits

Content for consideration: • Lifestyle fit, comfortable interiors • Stories on Brand, Safety, Lifestyle

1/3rd buy a brand outside initial set

Purchase