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Automotive Digital Retail

How to Prepare Your Auto Dealership for Digital Retailing

This article was originally published in Dealer Magazine.

Does your dealership offer customers the option to purchase a car online? If not, you’re missing opportunities and sales. According to surveys, 83% of consumers want to do one or more steps of the purchase process online.

Of course, other surveys show that just as many consumers still want to visit a dealership to test drive a vehicle, trade in their vehicles and sign final documents. 

But that doesn’t mean you should adopt a wait-and-see mentality when it comes to online car buying. Manufacturers, large auto groups, used vehicle retailers and other third parties are rolling out a variety of solutions designed to capture sales from customers who are looking for a more convenient car buying process.

Whoever best meets customer expectations, will win more sales in the coming years, especially as car shoppers become more comfortable completing the purchase process online. Is your dealership ready to compete?

If not, start researching digital retailing solutions. Be aware that some third-party solutions are designed to cut your dealership out of the process with a model that allows customers to build their own deals on a website (not yours), then essentially sell you “deals” as leads. Of course, the transaction can’t be finalized without your dealership’s inventory, so these solutions don’t truly meet the definition of a seamless online purchasing process.

Try to find a solution that integrates with your DMS and/or CRM and can be customized to your current sales process. Ideally, you want to allow the consumer to complete some or all of the car-buying process on your website.

It’s also important to find a solution that allows customers to build their own deal, pause and then pick it up later where they left off. And if they do decide to visit your dealership, one of your salespeople should be able to pick up the deal where the customer left off, without having to re-enter information.

digital retail solution should also be easy to use and designed for an optimal customer experience. The car shopper’s first step is browsing your inventory, so you’ll want a shopping cart where customers can “save” several vehicles they’re considering for comparison.

More than half of consumers still want to negotiate price, so be sure to offer that option, as well as a built-in communications tool to connect the car buyer with your sales staff.

Trade-in valuations can be tricky. Many customers don’t want to come to the dealership for this part of the process, but you may not trust a website widget to give an accurate quote. Your digital retailing solution should allow the customer to provide you with photos and detailed information, so your staff can come up with a valuation that won’t break your bank.

Once initial prices are agreed upon, there’s still the issue of how the customer’s credit score will impact the final price, as well as local taxes and fees. Look for a solution that calculates all of those factors into a final price quote.

Online credit applications are fairly straightforward, but if a customer isn’t approved be sure you send them a message letting them know your dealership can help find an alternative financing solution, and encourage them to contact you directly.

Another option that consumers want is to view online F&I product presentations and choose their own aftermarket products. Don’t be afraid that this will hurt your gross margin; early indicators from industry consultants are that customers will actually pay the same, if not more when left to their own devices in a ‘no pressure’ environment.

Finally, there’s the paperwork. The nice thing about making this available online is that many customers want to review the paperwork before coming down to your dealership. When the customer arrives, all they’ll have to do is sign the documents and pick up their car.

Finding the right digital retailing solution for your dealership is important, so take your time and vet several vendors. Of course, finding the right solution is only part of the process.

Once you have a digital retailing system in place, you’ll need to tweak internal processes to meet customer needs.

Be Open 24/7

Digital retailing means your dealership is open 24 hours a day, seven days a week. Artificial Intelligence (AI) chat bots can be helpful, but they can’t answer the more complex questions. Explore extending hours or outsourcing to a 24-hour BDC.

Staff Roles and Responsibilities

Digital retailing will inevitably change the roles and responsibilities associated with dealership salespeople, F&I managers and BDC agents. Online car buyers need nurturing, not closing.

Car buyers prefer staff who are product specialists, highly knowledgeable about vehicle specs, features, technology, models and trim levels. You might want to experiment with the following new roles and responsibilities:

  • Digital sales specialist or concierge to facilitate the online car-buying process
  • BDC agents trained to facilitate the online car-buying process
  • Product or brand specialists to answer questions and help with the selection process
  • High touch, combination sales/F&I managers that oversee the entire process from A to Z

Home or Work Delivery

Some customers will want vehicles delivered to their home or work. A product specialist delivers the car, explains features and takes the customer for a test drive. Offering a money-back guarantee will be necessary in order for this trend to become the norm.

Your dealership will need to offer customers an option to complete at least some of the car buying process online to stay competitive in the next few years. The good news is, digital retailing solutions are available that will keep your dealership central to the car-buying process.

To learn how your dealership can make the most of digital retailing, attend Bill Wittenmyer’s workshop, “Winning Digital Retailing Strategies: Facilitate Online Car Buying and Meet Customer Expectations Without Losing Profits or Control of the Sales Process,” at Digital Dealer 26 in Orlando.

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