J.D. Power Debuts Ordering Tool to Reduce Online Car-Buying Friction

J.D. Power has unveiled an ordering tool to prevent cart abandonment during car shopping.

The consumer insights and analytics firm said in a news release Tuesday (Jan. 24) that its Online Ordering offering is its first entry into the “Modern Retailing as a Service (MRaaS)” space, designed to streamline the process of car buying.

Phillip Battista, head of modern retailing at J.D. Power, said the launch is happening as inventory shortages are “causing shoppers to bounce from dealer websites without transacting.”

With the online ordering tool, he said, consumers will get an “end-to-end payment, documents, and protection system that elevates today’s online vehicle-buying experience.”

Among the features included in the new tool are new vehicle configuration data for 39 carmakers, real-time “penny-perfect payments” with applicable taxes and incentives for all 50 states, instant credit submission and score verification, and a “seamless transfer from a participating program dealer to the manufacturer.”

Shoppers leaving websites without making a transaction — a phenomenon known as “cart abandonment” — is an issue across the digital landscape, as PYMNTS has written. Research by PYMNTS and Checkout.com finds that 91% of consumers say their checkout experience significantly influences whether they will return to a given merchant.

“If you look at the checkout process today, it’s a big point of friction,” Karma Co-founder and CEO Jonathan Friedman told PYMNTS last year.

“You need to put in your input, you need to sign up, you need to add your credit or debit card, which is why [merchants] still experience around 75% shopping cart abandonment.”

J.D Power notes that its in-house research shows that 16% of new-car buyers order their vehicles online.

That’s in keeping with PYMNTS’ reporting, which shows a demographic shift to younger car buyers and growing demand for an end-to-end digital experience.

Other companies are working to meet this demand. Last week, Impel announced it had raised $104 million to develop its digital engagement software for car dealers, automakers, and third-party marketplaces.

“The past few years have brought massive change to the auto industry as traditional operating models have been fundamentally transformed with digital technology,” Impel Co-Founder and CEO Devin Daly said in a news release.

These rollouts are coming when the share of U.S. consumers paying at least $1,000 a month for a vehicle is at a record high. That figure was at 16% in the fourth quarter of 2022, up from 10.5% in the same quarter in 2021.

Meanwhile, dealers and carmakers need all the help they can get attracting consumers, as U.S. car sales recently fell to a 10-year low, as PYMNTS reported earlier this month.