It is an understatement to say the world has been turned on to online shopping and digital retailing. According to Adobe Analytics, during the 2020 Black Friday event, online sales increased 22% over the previous year.
What’s more, the National Retail Federation expected this year’s online holiday sales totals would increase 20% and reach $202 billion.
The automotive industry is experiencing this same phenomenon, much of it fueled by the shelter-in-place orders associated with the COVID-19 pandemic.
Particularly for younger car shoppers, digital retailing has grown increasingly popular. According to McKinsey, less than a third of younger consumers today want to shop for their next car in-person at the dealership, and a larger number of these individuals are interested in contactless service as well.
Furthermore, according to Cars.com, 48% of consumers today would like to handle price negotiations online. Another 42% say they want to handle financing online, including being able to obtain accurate payments online.
To deliver the optimal automotive retail experience for consumers in an online environment, many components must be artfully tied together to deliver consistent, transparent messaging for every step of the customer’s journey.
Expedited by COVID-19, the automotive retail ecosystem is undergoing its own shift toward a more consumer-friendly model that promises to mimic the convenience of online shopping found in many of today’s popular internet retail portals.
To successfully tap into this ecosystem and deliver on this promise, the industry is beginning to leverage science, technology and data to create a frictionless automotive shopping experience.
One key is data. The industry has plenty of data that can tell you what the trends were 90 days ago, perhaps even statistically advise what is available for a particular circumstance. Yet, without science all that data is just noise.
However, there is a platform that ties together all the pertinent data points necessary to arrive at a scientifically sound, transactable solution for your customer. The industry has access to the most powerful analytics platforms ever created to make educated, tactical and profitable decisions.
The best solutions today are designed to enable dealerships to excel in digital retailing and revolutionize the way manufacturers and lenders construct offerings to win market share without overspending.
What empowers and drives this ecosystem of automotive digital retailing is a comprehensive database containing every parameter, policy and factor that can influence an automotive sale or lease transaction.
That includes every lender program, every manufacturer rebate and incentive, every municipality tax and fee and every term and condition under which each dealership is willing to transact.
Additionally, today’s trusted platforms enable the seamless representation of all five major automotive sectors required for a successful transaction, online or in-store:
- Manufacturer: Every model and trim offered by every manufacturer; all respective incentives and rebates including compatibility and “stackability” rules, as well as VIN-specific, option package specific, regional specific and dealership specific targeted offers.
- Lender: Every published program offered by each lender in the country, including all parameters, policies and factors that can influence any automotive transaction.
- Dealer: Each dealer’s individual selling price rules, lender relationships, fees, reserve policies and all other required terms and conditions.
- Municipality and Government: All state, county and local laws, rules, regulations, calculation methodologies, tax percentage rates and registration fee and DMV calculations.
- Consumer: All consumer credit bands – and how those are segmented and considered by every manufacturer and lender.
Dealers, lenders and manufacturers all need to be coordinated in a comprehensive system that offers a dashboard and a portal of all pertinent data necessary to build, offer and transact.
This technology includes a solution that mines, analyzes and manages the billions of combinations and iterations of all lender and manufacturer programs available in the marketplace and finds truly superior, scientifically perfect solutions for all stakeholders: consumers, dealers, lenders and manufacturers.
Furthermore, today’s best and most comprehensive solutions enhance the consumer experience and the showroom process by electronically presenting all payment and purchase options to customers with full compliance and transparency – on any computer, tablet or mobile device – at any/all points along the consumer’s shopping journey.
As a result, the process can dramatically shorten transaction times, raise dealership efficiencies and margins, and elevate customer satisfaction as a result of a more streamlined process.
With these new technologies available to the entire automotive value chain, digital retailing is poised to see a tremendous lift in 2021.
Rusty West (above) is president of Market Scan Information Systems (http://www.marketscan.com).