Skip navigation
Kelly Mulroney resized.jpg
Kelly Mulroney

For Auto Dealers, What Exactly Is Digital Retailing?

It might first be easier to explain what it isn’t.

If you think about the last time you watched “Jeopardy, all the definitions are clear, without room for argument. However, if a dealer were on the show, you could get a plethora of clues that end with the same response: “What is Digital Retailing?”

The auto industry has been touting digital retailing for years, but the answer remains complicated.

In fact, it might be easier to explain what digital retailing is not, before delving into what it is.

Digital retailing is not simply having a website, email campaign, chat bot or online payment calculator. It’s also not “click button, buy car.” Buying a car has higher risks than purchasing a new $20 T-shirt and cannot be distilled to one-click shopping.

Applying digital retailing to a business is enabling technology, and often most importantly, a mindset.

A digital retailing experience should allow shoppers to build a deal online that reflects a realistic buying scenario.

That includes mapping out payments that include applicable incentives, taxes and fees, trade-in vehicle value and add-on protection products.

It is a personalized shopping experience that allows consumers to complete as much of the vehicle-purchase process as they want online, at their convenience, and connect that experience to finalizing their deal.

It’s giving consumers a complete set of shopping tools across both a dealer’s digital and physical storefronts and delivering a convenient, fast shopping experience.

If implemented correctly, dealerships will increase sales, CSI scores and gross profits, leading to happier, long-term customer relationships and healthy margins. Let’s take a closer look at the two defining aspects of digital retailing – personalization and connected shopping experience – to get a better idea of what it is and why it matters to all dealers.

Personalized Shopping Experience

Personalization is a major building block of digital retailing since today’s consumers expect a shopping experience tailored just for them.

InstaCart, a website and phone app that allows consumers to order groceries to their house, is a great example of this.

InstaCart algorithms create a unique experience for every shopper. They make it easier to find frequently ordered products, suggest new products based on past purchases and cue up previously ordered items that might have expired.

In today’s digital age, personalization is now the norm, rather than the exception, and consumers expect it in the auto industry too. Ninety percent of consumers prefer a unique, personalized car-buying experience, according to 2018 Cox Automotive Future of Digital Retail Study.

A static website with vehicle listings doesn’t offer the detailed, personalized experience that today’s consumers want.  

Providing the right digital retailing experience means leveraging detailed shopper information to transform the customer relationship.

The online workflow should remember vehicles browsed by a consumer and serve up other relevant options.

Searches should be tailored to those preferences. Consumers should be able to search by vehicles that meet their monthly budgets. They should be able to personalize purchase terms. Payments should reflect a shopper’s location to be inclusive of all-applicable taxes and fees, with these details being carried through the dealership’s system so there are no surprises when they walk through the dealership door.

This customized experience should appear consistently for car shoppers, whether on a dealer or third-party website.

Connecting Digital to Physical

Digital retailing also means connecting this online experience to the dealer showroom. More than 80% of consumers say they want to do one or more steps of the car-buying process online, but almost 90% still want to sign the final document in-store, according to the 2018 Cox Automotive Future of Digital Retail Study.

When a customer comes into the dealership, their online shopping experience should come with them too; no need to enter data again or bring a sales rep up to speed on preferences.

Dealers can be more informed and empowered when relating with a customer through the insights learned from digital retailing technology.

A sales conversation can now include unique buyer information gathered well before a customer walks onto the dealership showroom floor.

With that added information about consumer intent collected online, dealers have an opportunity to be even more relevant when communicating back and forth about a deal and being able to personalize the experience further for each consumer.

Consumers should be able to do as much or as little of the car-shopping process online. That includes structuring a deal online based on their detailed information and real lender programs, valuing their trade, reviewing and pricing add-ons, submitting a credit app and chatting with the dealer.

A generic payment calculator doesn’t constitute digital retailing. The consumer should be able to see realistic accurate payments and terms on the car they plan to buy as well as a valid trade-in offer for their current vehicle.

How This Benefits Dealers

Some dealers are wary of moving more of the car-buying process online, but at its best, digital retailing doesn’t replace the showroom; it extends the experience to a powerful new channel for reaching more customers.

Digital retailing enables consumers to shop for cars the way they want. They can search and find their next vehicle on their time and terms. It builds trust and transparency because the consumer has a consistent experience whether online and instore and speeds up the process for the car buyer and dealer. The 2019 Cox Automotive Car Buyer Journey showed that nearly three-quarters of car buyers who completed paperwork online were satisfied with the experience.

Dealers already invest a lot of money into attracting shoppers and advertising their online presence. 

Digital retailing can help dealers reach a wider set of consumers and create an experience that differentiates their dealership from others. They can provide a more positive, personalized and seamless experience to the shoppers while still enabling consumers to feel in control.

This should leave all dealers asking themselves the million-dollar question: “Is my dealership enabling the true meaning of digital retailing?”

Kelly Mulroney is Cox Automotive’s senior vice president-product.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.