Digital Retailing Benefits Dealers, Not Just Buyers
A good way to start answering a benefits question is first to accept some truths about your customer. Offering a digital path-to-purchase experience increases the likelihood a shopper will buy from your dealership – 85% more likely according to the Cox Automotive Digitization-of-End-to-End-Retailing-Study. And when it comes to choosing a dealership, 83% of consumers prefer a dealer that offers the ability to do one or more steps of the purchase process online, according to the Cox Automotive Car Buying Study
The so what? Consumer expectations have morphed the traditional car-buying process into a hybrid of online and offline interactions. You are likely to be disadvantaging yourself by not having a digital retailing strategy.
Paul Sansone, Jr, owner of Sansone Jr’s 66 Automall says it best, “If my handshake is better than your handshake, I’m going to win. And nowadays, the handshake happens online. That’s where you interact with your customer for the first time. Because that’s where they are. Digital retailing is a deal generation tool. It’s the start of the deal. You have to win the deal online before you can expect to win in the store.”
Not a Race to the Bottom
Before going any further, it is worth calling out some of the less often talked about revenue and profit generating potential of digital retailing. Regardless of market conditions, dealers will always be challenged to grow volume and improve efficiencies. Digital retailing accomplishes both. Providing more car buying convenience for today’s shopper can pay off big:
- Digital retailing helps you reach far beyond your primary marketing area.
- The sooner finance gets involved in the deal, the more profitably they can be structured. Deal transparency increases finance penetration.
- Dealers can command a price premium for the convenience of an amazing buying experience. This is an opportunity to earn gross regardless of market conditions.
- With much of the purchasing process occurring online, the showroom experience allows more time to educate and cultivate consumers – including learning about the additional services your dealership offers.
Sell The Car, Not the Appointment
Digital retailing done right should allow the customer to move themselves down funnel online by creating a clear path to purchase that gets them closer to the sale – start and stop where they want – and pick up where they left off when they get to the dealership.
Assuming your goal is to offer an end-to-end digital experience that drives transactions, your platform should include capabilities that empowers customers to actually drive the transaction digitally – meaning every step in the process is digitized. The benefits of the simplified, streamlined process are many, and often, the benefits for customers and dealers tend to overlap.
- 1. Deal Generation v. Lead Generation You are in the business of selling cars. The overwhelming majority of U.S. car buyers are payment buyers. The top frustration, cited by 42% of buyers in a recent CarGuru’s study is the lack of available payment information prior to contacting the dealer. If most shoppers want to know what payment and finance terms they qualify for prior to making a buying decision – your digital retailing tools can make it easy and convenient for your shoppers to find the information they are looking for.The information transparency just makes sense, serving as both a trust builder and sales accelerant. The more customers know, the more comfortable they are. The more comfortable they are, the more likely they are to buy.
New digital finance technologies go well beyond traditional payment calculators. Let your lenders serve up their best offers and let the consumer make the choice.
By changing when and how the shopper is introduced to qualified payment information and dealership financing options, the combination of technology and data enable you and the buyer to come together much faster. The two-way transparency is a trust multiplier.
T1his requires a DR platform that supports hard-credit pulls and directly integrates with your desking/finance platform. You, the dealer, are in total control of how customers engage the F&I process – including all credit & finance filters and any numbers presented to the customer. Calculated payments, matched to your lender programs, can also be configured to include qualifying incentives, trade allowances, taxes, fees….and dealer reserve.
The result, your finance ready, remote buyers are fast tracked from your website to the showroom and thru F&I, increasing profits and customer satisfaction.
Note: Your digital retailing platform should give you the flexibility to present your F&I pricing information online – in the same way you want it presented in-store. If they cannot or will not, you are not working with the right platform.
- 2. Dollars & SenseA growing number of customers are looking for ways to speed up their time at the dealership by locking in their financing before they arrive in-store. In addition to reducing time at the dealership, there are other reasons more customers are willing to source their financing elsewhere:
- Consumers wanting more control over where and who and how they do business.
- New business models and digital finance technologies introduced by lenders and some of the disruptors.
- Much higher satisfaction scores among those consumers who secured direct financing outside the dealership.
Emerging trends like this translate to a higher proportion of customers showing up with financing arrangements already secured, reducing the opportunity to sell them value-added protection products and forfeiting F&I gross.
Fortunately, digital retailing platforms create opportunities to insulate dealers from these risks by getting finance involved in the deal sooner. The deal transparency increases finance penetration- and the earlier finance gets involved in the deal, the more profitably they can be structured.
Digital retailing technologies also create opportunities to maximize PVR by introducing customers to relevant F&I products throughout their buying experience – unlike the legacy practice of presenting all your F&I products after the purchase decision has been made and a contentious step in the process that many worn-out buyers understandably perceive as the dealer ‘selling’ add-ons and extras.
When customers are presented (educated) with ‘intelligent’ product suggestions and personalized offers at different points in their journey – they are much more likely to purchase.
Note: Your DR platform partner should enable you, the dealer, to configure precisely what F&I products and accessories are presented to your remote customers and present them at points in the process that are most statistically likely to drive conversion. If they cannot or will not, you don’t have the right platform.
- 3. ConvenienceAt the risk of stating the obvious, digital retailing means your dealership is never closed. Your showroom is always open. Buyers can shop late at night, or early morning, or Sunday afternoon – the hours most businesses are not open.And since you are ‘virtually’ never closed, your eCommerce solution should be powering an accelerated and streamlined digital path-to-purchase experience that drives transactions 24/7.Consumer expectations are forcing dealers to morph the traditional car-buying process into a hybrid of online and offline interactions.The customer values the convenience and speed. Dealers are searching for efficiencies and cost savings. Again, the benefits of digital retailing overlap between customer and dealer.
- 4. It’s About TimeAs intended, DR tends to streamline and simplify the buying experience, making the process more efficient for both buyers and dealers. The efficiency benefit for the consumer translates to less time spent at the dealership and for the dealer, faster transaction times.In addition to the exceptional buying experience that fosters better customer interactions and motivates employees, the efficiencies for dealers accelerate sales throughput, help reduce costs and increase closing ratios.
- 5. Customer Satisfaction
The customer values the convenience and speed of a digital buying experience most. They also value the control, empowerment, and transparency that comes with driving the transaction in a pressure free environment. In a marketplace where customer experience is edging out price and even product quality as a primary differentiator -selling the way the customer wants to buy can pay off big.
For dealers, profits are determined by sales and sales are determined by sales process. Providing an exceptional buying experience can command a price premium, creating incremental profit opportunities. There is also a strong correlation between customer satisfaction and loyalty. Stand out and people will talk about you – boosting repeat and referral business. Future proof your business. Word of mouth travels fast!
Pete brings over 40+ years of experience in automotive finance and technology as Founder and CEO of eLEND Solutions™. Founded in 2003 as DealerCentric®, Pete is leading the company’s evolution to an automotive FinTech platform focused on deal generation solutions that power transactional digital buying experiences for the retail automotive industry.
The platform specializes in hybrid digital credit, identity, and finance solutions - designed to accelerate conversions of digital end-to-end purchase experiences - concluding with a transactional, fundable deal structure.