Why Digital Retailing Matters to Car Dealers, Customers

Modern car shoppers want a convenient, personalized online experience to ease pain points and expedite time spent in-store.

Mo Zahabi

February 28, 2020

4 Min Read
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Wise implementation of digital retailing helps dealers operate more efficiently and deliver the experience consumers have grown to expect.Getty Images

In these days of Amazon-style convenience, where your phone makes almost anything just a click away, the process of buying a car is quickly evolving.

While “digital retailing” may seem like the automotive buzz term du jour, its impact should not be underestimated.

It drives stronger leads and more ready-to-buy shoppers to dealerships. Both customer satisfaction and a dealer’s bottom line increase when it’s done right.

While there’s still a long way to go before digital retailing is the industry standard, research already shows its tremendous benefits. A Cox Automotive study says dealerships effectively using digital retailing saw two times more vehicle-detail-page views per visit.

However, getting those views is just the first step. Consumers who engage with digital retailing are six times more likely to submit forms than those that do not engage with digital retailing. Digital-retailing leads close 30% higher than other Internet leads, according to Cox research.

Wise implementation of digital retailing can help dealers operate more efficiently and deliver the experience consumers have grown to expect.

Modern car shoppers desire a convenient, personalized online experience where they can engage on their own terms to ensure their time ultimately spent in-store is expedited.

Moreover, properly executed digital retailing can help dealers address common car-buying pain points, such as a long F&I process or trade-in valuation accuracy and expectations. It streamlines the process for both sides.

Seamlessly Connect Both Online and In-Store

Today, it is not enough to simply have a good in-store experience. To really connect with customers, dealers need to provide a positive experience both online and in-store, increasing the opportunity for personalization.

With a study showing 76% of consumers expecting dealers to know something about them before entering the dealership, it is imperative to integrate digital retailing technology into other dealership systems. This ensures all customer information is recent and properly stored.

These integrations enable dealers to provide a personalized and seamless online to in-store experience by receiving notifications every time the online shopper revises the deal structure. It ensures the dealership has all relevant information in real-time.

This information automatically syncs into dealership management systems to reduce the likelihood of duplicate leads and to understand where a consumer left off in their buying process.

Mitigate the Long F&I Process

Financing a vehicle is often one of the most lamented parts of the car-buying experience.

Consumer satisfaction with time spent in dealerships is declining. A Cox survey indicates 54% of consumers in 2017 were unhappy with the amount of time it took in-store to buy a vehicle. In 2019, that rose to 58%.

Digital retailing can combat nightmare scenarios involving hours spent in dealerships filling out endless paperwork and negotiating.

In fact, when consumers select F&I add-ons while shopping online, they save 33 minutes at the dealership, on average, according to the 2019 Cox Automotive Car Buyer Journey Study.

This takes stress off in-store negotiations by providing transparency. It offers a more convenient way of applying for financing options as well as educates consumers on different offerings.

Reducing the time it takes to complete a purchase in-store improves the customer experience, which is essential for building loyalty.

Manage Trade-In Accuracy and Expectations

Much like shoppers’ eagerness for transparency in the F&I process, expectations are similar when it comes to valuation of their trade-in.

Consumers want clear and concise explanations about pricing and terms that are easy to track from start to finish. Implementing digital retailing into the valuation process for trade-ins lets consumers easily identify updates to their valuation and see any changes made to the offer.

When dealers communicate offers in a transparent, easy-to-understand way, consumers are more confident they are receiving a good deal. By starting these steps online, consumers can save almost 30 minutes spent negotiating their trade-in value in-store.

Once this information has been submitted, digital retailing tools will automatically update the customer’s profile to eliminate repeating steps. In turn, dealers can reduce the amount of time negotiating at the dealership, positively impacting customer satisfaction.

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Strategically implementing digital retailing:

  • Alleviates common points of shopper frustration.

  • Delivers a more satisfying process for the customer.

  • Provides a more profitable transaction to the dealer.

We expect the digital-retailing trend to expand even more with time. Catchy buzzword status aside, automotive digital retailing is one of the biggest waves to ride into the future. (Mo Zahabi, left)

Mo Zahabi is senior director-product consulting for Cox Automotive’s VinSolutions, Dealer.com, and Digital Retailing.

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