Clicklane, Asbury Automotive Group’s new “end-to-end” online sales platform, is off to a fast start after the first full month of a pilot program at three dealerships in December, CEO David Hult says.
Closing rates for transactions on Clicklane are up “dramatically” compared to Asbury’s current online sales and lead generation platform, called PushStart, Hult says in a Feb. 2 conference call announcing record fourth-quarter earnings.
PushStart is more of a lead aggregator; it can complete about 40% of an entire transaction, depending on the brand, but not the entire transaction, Hult says. Clicklane is designed to allow 100%-online transactions and accommodate customers who switch from online to in-store and back again without missing any steps, the company says.
“If we had 100 leads on PushStart, if we closed 10 out of 100, the conversion is 10%. If you have 100 leads on Clicklane, we believe that number will be more than double that, in Year One. By the time you get to Year Five…that number will go up materially” as the concept catches on and Asbury promotes it more heavily, he says.
Hult says internet leads traditionally generate a closing rate of about 10%, but the rate for PushStart is lower than that, since it can’t entirely complete a sale. In contrast, he says that with its greater capability, and with marketing weight behind it, Clicklane could generate a closing rate of 20% to 25%.
“This is why we are dedicating dollars to marketing the tool – it is a no-brainer. If the customer knew how simple and transparent it was, and they trusted the source, why wouldn’t they use it?” Hult says in an email.
Hult says in the conference call that in the next five years he expects the number of customers doing transactions online will increase to 30% to 50% from a low level today. “Do we think 100% of the people are going to buy online? No, of course not,” he says.
In addition to a higher closing rate, Hult says transactions via Clicklane are faster, and F&I sales via Clicklane are better than expected so far.
The three pilot dealerships offering Clicklane in December were Courtesy Kia of Brandon, Tampa, FL; Nalley Lexus Roswell, Roswell, GA.; and Greenville Luxury (Jaguar-Land Rover-Porsche-Volvo Cars), Greenville, SC.
Asbury Automotive, based in Duluth, GA, aims to roll out Clicklane at all its dealerships by the end of first-quarter 2021. For the fourth quarter, Asbury announces net income of $89.1 million, more than double a year ago, on an 18% increase in revenue, to $2.2 billion.
For all of 2020, Asbury’s net income was $254.4 million, up 38%. Revenues were $3.8 billion, down 2% from 2019 yet a big turnaround, considering Asbury’s total revenue fell 20% in the second quarter because of the pandemic.
Despite slightly lower revenues, 2020 profits improve based in part on lower expenses, especially for advertising and personnel. On the income side, Asbury has higher gross margins for new and used vehicles. Low inventory helps drive higher margins, the company says. Asbury also has higher F&I revenue per vehicle.
In addition, in 2020 Asbury acquired 12 Park Place luxury franchises in the Dallas-Fort Worth market, representing about $1.7 billion in revenue at an annualized rate. Asbury is No.7 in the WardsAuto 2020 Megadealer 100, with total revenues of $7.2 billion.
