Page 17 - GIADA March-April 2020

95% of customers still buy their vehicles Digitizing paperwork and negotiations tools, making installation relatively simple.
in a dealership. can shave 93 minutes off the car-buying The bigger challenge for used car stores
process, putting dealerships squarely in the is adopting an omnichannel marketing
For used car dealers, digital retail is a sweet spot of customer satisfaction. mindset.
hybrid of online and offline car-buying
experiences. It gives car-buyers the ability Improved customer satisfaction creates Bumps in the Digital Retail Road
to start the buying process online, then a virtuous cycle of referrals from happy However, some dealers still have concerns
complete the purchase in-store—or vice customers, who then recommend your about digital retailing tools—specifically
versa. Digital retailing (which is sometimes store friends and families as well. with automatic payment calculator features.
called “omnichannel marketing”) allows
customers to start and stop the deal flow on More Profitable Upselling In a study conducted by CBT News in
their terms. Opportunities 2019, 50% of dealers said it is common
2Price transparency and greater for payment tools to provide unrealistic or
Digital retailing platforms also transfer competition are hurting margins on used inaccurate monthly payment expectations.
most—if not all—physical paperwork car sales. Dealers need to find those profits Another 37% somewhat agreed with the
online. Customers can complete paperwork elsewhere, especially in F&I products statement. Many dealers report having re-
on a tablet in the store, or log-in and finish and long-term service contracts. Digital desk deals that came through their digital
the process from the comfort of their home. retailing platforms provide innovative retail channel, causing frustration with
upselling opportunities that increase customers and lower deal profitability.
Whether in-store or at home, digital margins for used car dealers.
retailing streamlines the car-buying journey Still, the future of digital retail is bright.
while giving customers the flexibility and According to McKinsey Consulting, digital The technology will continue to improve,
control they desire. retail platforms “offer better ways to serve and as more customers experience the ease
customers and extract more lifetime value of digital retail, the more they will come to
Benefits of Digital Retail for Used Car via tailored F&I offerings or the up-sale of expect it.
Dealers parts-and-service contracts during vehicle
Is digital retail a game-changing trend, or negotiations.” Are you Going Digital?
another overhyped fad? Given the massive Independent used car dealers stand at a
changes happening in the used car industry, Some digital retail platforms also streamline crossroads. As automotive retail changes
the answer is clear: Digital retail is a major vehicle trade-ins, giving customers instant around them, every owner and GM has
innovation that could have long-term quotes and helping dealers secure much- to make a choice: Do we change with the
benefits for early adopters. needed used vehicle inventory. Modal—a times, or stick to “business as usual?”
popular digital retailing platform—has an
There are three main benefits of digital online trade-in feature that gives customers Regardless of what road you choose, the
retailing platforms for used car dealers: an estimate and offer before they ever step digital retail evolution is not stopping for
foot on the lot. anyone. McKinsey Consulting estimates
Improved Customer Experience that 25-50% of the used car buying
According to Cox Automotive’s 2019 Keep Pace with Franchises and experience will shift to online, up from
1Car Buyer Journey Report, customer Digital Used Car Platforms only 6% today. It’s hard to imagine a future
satisfaction declines significantly after 3The collapse of big-box retailers like where all but a few niche dealers adopt
spending more than 90 minutes at Sears and Circuit City should be a warning omnichannel marketing tools.
the dealership. However, the average to used car dealers: keeping pace with
customer spends 2 hours and 52 minutes innovative competitors is essential. Here’s the good news: it’s not too late to
at the dealership―almost twice as long as evolve. No one has missed the boat yet.
preferred. Online retailers like Carvana and Vroom Every dealer in business today can still
are leading the way in terms of innovation, adapt to the modern car-buying experience.
Digital retailing platforms make the two but franchises are close behind. OEMs are Not only will digital retail help you keep up
most frustrating parts of the car-buying pushing their franchise partners to adapt with fast-moving competitors, but it will
experience easier: paperwork and price digital retail solutions and modernize give you an early-mover advantage over
negotiations. Customers can complete these the in-dealership experience. CarMax, other used car dealerships.
steps online before they visit the dealership. meanwhile, recently bought a $50 million
minority stake in Edmunds to improve its Thanks to modern digital retail platforms,
“By making more steps to the sale available digital retail product. any dealership can offer a top-notch
online before customers arrive at the store, customer experience. We can’t control
dealers can reduce the amount of time Things are changing fast, and independent where the used car industry is going, but we
spent on the deal at the dealership, thereby dealers need to keep up. Many digital can control how we respond to it. n
positively impacting customer satisfaction,” retailing platforms integrate directly with
said the report. popular used car dealer DMS and CRM

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