eLEND-Pandemic_DR-Adoption

The Pandemic Drove a Great Leap Forward in Digital Retailing Adoption, Part 2: What Happened When “Everything” Changed?

For starters, not everything did change – though as time passes the stories of the great pandemic will surely grow more dramatic. The reality is, frankly, dramatic enough: there was a fair amount of disruption to the automotive space, enough to shut factories down for months and close many dealerships. But, dealers are a resilient and resourceful group that knows how to survive. So they didn’t hesitate to pivot and find new ways to sell and service cars. And for most, that pivot included digital retailing solutions. The logic was unmistakable: by making their websites more transactional, and relying on DR to reduce in-store time to meet, greet, and deliver, many dealerships were able to stay open in a “low-touch” manner of business: eLEND’s recent survey of auto dealerships revealed that for 80%, the pandemic accelerated adoption of digital path-to-purchase experiences at their dealerships.

Let’s Make a Deal…on the Website or the Store. 

One major result of the pivot into digital retailing is that nearly 90% of dealers now say their websites are more transactional (consumers can get closer to a transactable deal easier) today than during pre-pandemic days. This survey finding suggests a silver lining: COVID-19 has impelled the industry’s rapid adoption of digital buying experiences, especially those that address consumers’ preferences for a low-touch buying experience. Many experts agree that the same level of adoption – without a pandemic – could have taken another 2-5 years.

 

So…why? Do dealers just like DR better? Not quite. While they were keeping the doors open during the pandemic, 87% of dealers surveyed noticed that Profit-per-Vehicle, or PVR, was higher – or stable – for DR-initiated transactions. Additionally, 31% said that front and back PVR was higher when compared to pre-COVID-19 averages. The finding seems to challenge dealer notions that DR will have an adverse impact on PVR.

Faster is Better, But CSI is Underwhelming
 
There’s no doubt that challenges remain in our ‘new normal’ DR world – just as they would without DR. For example, while 23% of dealers said CSI had improved, 66% saw no change. One reason could be that DR technologies, and required process changes, are not yet reducing redundancies and facilitating seamless online to in-store transitions.
By completing much of the deal online, customer expectations are high, that starting and finishing online will save time. Unfortunately, too often they have to navigate through legacy processes. Process is the keyword here: the dealers we surveyed reported that the hardest part of adopting a “digital-first” approach was not technology, or even training – but process! Over half (56%) cited ‘process change’ and  ‘having the right people’ (28%) in place as the biggest challenges.
All this being said, the good news is that 64% of dealerships reported reduced transaction times (Meet & Greet through Delivery) compared to the pre-COVID average, with 38% reporting they knocked at least 30 minutes off the transaction time.
It turns out that sometimes, change is good – even when it’s out of necessity. When the pandemic forced dealers to adopt DR, most discovered that digital-first meant faster, easier, safer…and just as profitable – if not more so.

Author: Pete Maclnnis

Author Bio: Pete brings over 37 years of experience in automotive finance and technology as Founder and CEO of eLEND Solutions.  Founded in 2003 as DealerCentric, eLEND Solutions is an automotive FinTech company specializing in online and in-store digital credit, identity and finance solutions designed to create a more efficient and profitable vehicle purchase process for the retail automotive industry. 

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