There are many types of digital retailing tools and products that dealers can invest in, but which approach works best for you?
Dealers are well aware that they need to constantly be investing in, and fine tuning their digital shopping tools for consumers. The question is, what type of digital presence fits best for your dealership?
If you are unsure which digital retailing category to focus on, Stephanie Turner, Director, Product & Corporate Strategy at Cox Automotive Canada advises to concentrate on the customer experience. She said it’s important for dealers to ensure they are choosing a tool that allows the consumer to get the information they are looking for without asking too much from them.
“Amazon doesn’t ask you to login before you can see the price of a product on their site; you provide your information once you are ready to transact,” said Turner. “The same goes for digital retailing — consumers should be able to see their payments and get the information they are looking (for) without having to give you their name and email address up front.”
The question is, what type of digital presence fits best for your dealership?
If there are too many barriers or clicks to access the information they want, Turner said they will either provide fake information, or move on to another dealer’s website.
Turner said another important part of a digital retailing solution is the ability to connect a credit application to lenders to offer consumers and dealers a seamless credit approval without too much wait time or data entry. “Without the connection to a lender or lending portal, the credit application is just another lead form.”
She said Cox Automotive offers a full suite of digital retailing tools that allow consumers to complete several steps of the purchasing journey online. These include offerings that help deliver accurate payments, allow for the completion of a credit application online, and allow the consumer to appraise their trade, and even reserve a vehicle.
To further digitize the customer experience, Cox Automotive also recently launched Digital Contracting through its Dealertrack portal.
As for how dealers should manage customer expectations and experiences with digital retailing, Cox Automotive’s 2017 Consumer Study found that 65 per cent of consumers think it’s important that dealers do not force them down a set sales process.
On how dealers can manage their own digital retailing expectations, Turner said: “Digital retailing will not start instantaneously selling cars for you online; the entire dealership from reception, to sales, to the business office and management need to be on-board and ready to embrace digital retailing in the store.”
James Hayes, Co-founder and CEO at Mobials, pinpoints two options when describing digital retailing, which is the interaction between a buyer and a seller on a mobile or a desktop website that allows a consumer to move forward in the consumer research journey — and in the dealer selling journey.
“Without the connection to a lender or lending portal, the credit application is just another lead form.”
— Stephanie Turner, Director, Product & Corporate Strategy, Cox Automotive Canada
“But those are two different things, and we believe there are four different types of digital retailing,” said Hayes, in an interview with Canadian auto dealer. Those four types include:
- Tier 1: Digital retailing super-charged leads: dealers are supplying value to the consumer through real-time trade. The trade-value exchange online is a digital retailing tool that provides dealers with a lead, along with additional information when compared to a standard lead form.
- Tier 2: Super-charged lead & credit and/or finance application: here, dealers are taking the consumer-value journey and delivering extra value to the consumer, and themselves. They are moving towards the active research/buying decision part of the process — creating better leads for the dealer, which means they also need to provide a better value exchange for the consumer.
- Tier 3: Omni-channel: Hayes describes this category as “literally trying to pencil the deal, online-to-offline.” This stage typically happens in the dealership, but dealers using an omni-channel solution are trying to drive efficiency to save the consumer time — even if it means giving up a lot of their ability to manage this step inside the store. The overall goal is to ensure the dealer is able to work a deal, regardless of the situation.
- Tier 4: Conversational commerce: This category can form Tier 1, 2 and 3. It means dealers are facilitating digital retailing into a chat mechanism so that they can help the consumer through things like an omni-channel solution, for example. Hayes said they believe Tier 1 and 2 are where most dealers have built-in processes that they can manage. This means they do not have to change their staff, existing processes, systems or software, and integrations don’t take six months to a year.
Mobials offers its digital retailing tools through its AutoVerify Suite, which focuses primarily on Tier 1 and 2. For dealers looking to move at a faster pace, Hayes said there are lots of tools available in Tier 3 and 4 that they can work with.
“But those are two different things, and we believe there are four different types of digital retailing,”
— James Hayes, Co-founder and CEO, Mobials
The fast track
Dealers eager to deliver a true omni-channel buying experience, will likely find many gaps in their own current online offerings.
A customer experience survey conducted by U.S.-based digital retailing solutions provider Roadster in July 2019 revealed the top omni-channel experiences for consumers came from Walmart, Target, Apple, and Best Buy. According to Michelle Denogean, CMO of Roadster, the survey’s findings demonstrate a large focus on the consistency between the online and in-store handoff.
“Nearly half (48 per cent) of the people that we surveyed said that having a consistent experience, meaning that I could start something online and pick up whatever I was doing in-store, either figuratively or physically, was an important piece of the process and that they didn’t want to be disconnected from,” said Denogean.
Based on the survey, the automotive sector was ranked among the industries that consumers felt offered the worst shopping experience — second only to the cable industry. The survey also found that 80 per cent of car shoppers are willing to pay up to 10 per cent more for a faster, more transparent and painless car-buying experience.
The automotive industry traditionally runs at about a plus 48 Net Promoter Score (NPS), which is not great. NPS measures customer experience based on the probability of recommending a company or brand to others. This is on a scale of -100 to 100.
Andy Moss, CEO of Roadster, said the automotive score has actually declined over the last year or two, reaching down to the high thirties. That is largely attributable to the fact that the car-buying experience has not so much worsened as consumer experiences have improved in other areas. “The level of expectation of what is possible is making the need for digital retailing in automotive ever more pressing,” said Moss.
That sentiment is echoed by Matt Lawson, Vice-President of Dealer Software & OEM at autoTRADER.ca. As the industry continues to evolve, he said dealers will need to increasingly focus on the in-store process. “That is going to be critical; it’s going to be very important that the consumer has a seamless experience from online to in-store,” said Lawson.
Lawson said TRADER offers digital retailing tools for dealers. One of their latest additions includes Instant Cash Offer, which was launched at NADA earlier this year. The program provides the consumer with a guaranteed trade valuation online, so they do not have to negotiate it in-store — and is provided to the consumer at no risk to the dealer, according to Lawson.
In terms of payments and offering consumers the ability to shop around affordability and ensuring those payments are aligned with OEM programs (whether that means new car, CPO or lender rates, for example), TRADER has deployed this concept into its MarketPlace and website ecosystem to be able to offer those tools to the consumer.
“It’s going to be very important that the consumer has a seamless experience from online to in-store,”
— Matt Lawson, Vice-President, Dealer Software & OEM, autoTRADER.ca
“If you think about those three things: trust, trade valuations, affordability and payment options, those are three key elements to digitizing that transactional process,” said Lawson, who adds that dealers need to start the planning process now. “We’re seeing everything from large dealer groups to small individual-owned franchise operations in rural markets that have already started.”
For dealers, there are a range of providers who can help digitize your dealership’s shopping journey. It makes sense to reach out to providers to help determine which ones are the right fit for your business and culture.
