Digital retailing has been a hot topic in the auto industry for quite some time now, especially during the height of the pandemic where many dealers were nudged to move vehicle sales online. I had written a roundup (view here) a little over a year ago about how to improve the car buying experience in a changing economy, which was largely centered around the idea of consumers looking for an end-to-end digital buying experience.
While the world seems to be getting back to normal, or a “new normal,” digital retailing is here to stay. And though the majority of vehicle purchases still involve a trip to the dealership for several steps in the buying process, 86% of shoppers (according to a recent Cox Automotive study) still want the save time spent at the dealership with the ability to complete as many steps online as they desire.
If you are still on the fence about digital retailing for your dealership, or haven’t found success with your current digital retailing tools, here are some great pointers from industry leaders that may help address some of the barriers to adoption.
1. Make sure your dealership is bought in on digital retailing
First and foremost, in order for digital retailing to work for your dealership, everyone needs to be on board. Perhaps you don’t see the value in digital retailing or aren’t getting the results you had hoped for. Motoinsight raises a good point about how the dealer needs to be bought into the digital retailing platform if they want customers to follow suite.
“When I talk to dealers who get great results with some form of omnichannel digital retailing platform, their methods are always different. Some centralize their entire process around the BDC, while others deputize their sales team to do targeted prospecting through the tool.” A successful digital retailing experience requires the dealer to be more involved than dropping a widget on their website and watching the leads roll in.
2. Define your digital road to sale
While a “road to sale” is nothing new for dealers, the roadmap changes quite a bit for dealers that offer a digital retailing experience, now that several/all steps of the buying process can be completed online. The road to sale begins much earlier than a visit to the showroom. In fact, a visit to the showroom is often one of the last steps of the digital retailing process.
Dealer Inspire does a great job explaining how the traditional steps involved in purchasing a vehicle can translate to online steps in this blog article.
3. Support an end-to-end experience
Though many of your buyers may only want to complete some of the buying process online, giving them the option to complete the buying process online is still valuable. This includes completing the loan application and accepting the offer without requiring a visit or phone call.
According to an UpStart article, “While consumers have traditionally had some tolerance for friction in more complicated businesses like lending, this will wane over time as consumer experiences from other parts of their lives impact their expectations in the lending process too.”
4. Don’t fear online “walkouts”
In the same Cox study referenced in the intro, Cox sites the number one barrier to adoption of digital retailing being that “43% of franchise dealers fear customers will walk away if [the] price online is too high.” While it’s much easier to walk away from a deal online, the study found that most (76%) would not walk away if the online price was too high. Of the 76% that would not walk away:
31% would work with the same dealer online to get a lower monthly payment
28% would call or visit the same dealer to get a lower monthly payment
17% would search for a different vehicle from the same dealer
Even if the 24% that would abandon an online deal is higher than the percentage of walkouts at your physical dealership, these shoppers likely would have bounced from your site much quicker had you not offered digital retailing as an option in the first place.
5. Capitalize on a new customer base
>Many dealers are content with their current, profitable, business model and have no desire to add digital retailing to the equation. This WebBuy article raises a great point. While digital retailing may only account for a fraction of your business, there’s a new customer base that these dealers have never interacted with before who will simply move on to the next dealer who offers the type of buying experience they desire. Capitalize on the opportunity at hand by providing a top-notch digital retailing experience.
6. Keep investing in personal relationships
At the end of the day, personal relationships online and at the physical dealership still matter to consumers. Dealerships traditionally do a good job building relationships with their customers, though one area that could always improve, as mentioned in this CreditIQ article, is the transition between the online and in-store experiences.
Sometimes there may be a bit of a disconnect that could be addressed by making sure all consumer-facing and internal tools are seamlessly integrated, requiring the customer to input their information once and quickly move through the sales process going forward.
Digital retailing is here to stay and as more dealers adopt it, it will quickly become a commodity that is required in order to thrive in a very competitive landscape. According to the Cox Automotive study referenced earlier, “3-in-4 franchise dealers agree that they won’t be able to survive in the long run if they don’t adopt digital retailing.”
If you’ve resisted digital retailing up to this point, it’s a good idea to start phasing it in before it becomes a necessity to remain competitive in the near future.