Making Car Buying Cool Again
Thursday February 7, 2019
- Offer more online steps to the deal. Gaining ready-to-buy shoppers today starts with better customer access to consistent payment information, incentives, trade-in values and information, chat capabilities and pricing on protection options. That helps to clearly define the parameters of the deal and will ensure consistent communication. And it’s important to car buyers: 71% want to get information about the deal online.
- Combine your website and dealership showroom process into a single streamlined experience. The last thing customers want to do is start the process over again when they arrive at your store: 43% want to secure financing online, and 51% want to structure the deal online. That’s right: half of car buyers want to select their products, make a deposit and finalize the price before they ever step foot in your dealership.
- Focus on your staff. Introducing new technology and processes at your store is hard. You can’t just “turn it on” and reap the benefits. It takes patience and commitment. Getting your team up to speed on new customer handling and sales processes is the crux of successful digital retailing, and it could arguably be the hardest part of implementing digital retailing at your dealership. In fact, this part of the implementation process is so crucial to your success that a best practice is to start slowly by designating a couple team members to handle on digital retailing leads.
If you’re a dealer who hasn’t embraced digital retailing – you’ve already fallen behind the pace of commerce. You could blame Amazon for its convenient, right time/right product/right place approach to online commerce, and you would not be far off: The “Amazon Effect” has disrupted many retailers. Yet while people think of the Amazon Effect in terms of shuttered brick and mortar stores, the real impact has been how Amazon has changed consumer buying habits and preferences. According to How to Win in The Amazon Era, a survey conducted by global marketing firm Epsilon,1 the top reasons for the Amazon Effect includes price (64%), ease of use (52%) and convenience (47%).
This is the reality of automotive retail, and it’s been headed this way for more than a decade. Consumers are doing a lot of research ahead of time, and they aren’t very interested in lengthy transactions. Once shoppers decide on the vehicle, they expect the transaction to be quick and efficient.
Two Key Buyer Traits in the Driver’s Seat
Budget-conscious shoppers are now empowered and impatient, which may well have resulted in two key buyer traits: an increased inclination toward payment buying and a strong aversion to wasted time. 53% of car buyers look for monthly payment information while researching a vehicle.2 They’re also prioritizing the overall experience – and time spent doing unpleasant tasks at the dealership is a major factor. An average of 3 hours is spent at the dealership during a typical purchase, and half of that is spent negotiating or doing paperwork. The result is a subpar 46% satisfaction rate with how long the process takes.2
Perhaps the reality is that it’s all about making the complexity of a car purchase as simple (and efficient) as possible – which means a digital experience with tighter integration between digital and physical showrooms and a priority on speeding up the paperwork part of the process. Doing that leaves more time for the joyful parts the car-buying experience – like test drives – and helps avoid getting trapped in a race to the bottom of the automotive retail sea, where dealers forsake price just to wrap up the deal while the customer grows grumpier with every minute spent waiting to “be done.”
That’s not a place you want to be.
Instead, the solution is in figuring out how to keep your margin profitable while maintaining a high CSI and a favorable buying experience that drives future service revenue. That’s where digital retailing can help. As an automotive retail technology solution, it provides a path to a better shopper experience targeted to customer priorities. In fact, 9 out of 10 buyers are more likely to buy from a dealership that offers at least one component of digital retailing.3 Even better, digital retailing is proven to generate higher sales profits. On average, Cox Automotive digital retailing leads produce 51% higher gross profits compared to other internet lead sources. Additionally, digital retailing results in 31% higher average back-end gross profits and 113% higher average front-end gross profits.4
Digital Retailing Is Now an Expected Part of the Process
Car buyers want to use digital retailing because it connects the work they’ve done online to the in-store sales process so they don’t have to re-hash it with you in the showroom. At the same time, digital retailing allows YOU to gain operational efficiencies by bridging the gap and offering that seamless, consistent experience buyers are looking for. Digital retailing also helps you personalize the shopping experience and give car buyers a feeling of transparency, which can help build trust with your dealership.
Digital retailing can also help get more satisfied ready-to-buy “payment” shoppers before they even step foot into the dealership. It creates a world where buyers can work out what they want at their convenience: a real monthly payment, with no added payment surprises or on-the-spot pressure “in the box” for F&I. And for those buyers who are deeply unsatisfied with how long the purchase process takes in the dealership, it creates an easy and fast purchase experience that leverages digital tech with in-store sales expertise. It’s the speed that improves customer satisfaction, lowers the cost of the transaction, and lays the groundwork for increased gross profit. At the same time, it differentiates the experience for car buyers who are desperately ready for the automotive world to catch up with the Amazons of the world. It’s in these ways that digital retailing helps dealers make car buying cool again.
Start by prioritizing these four steps:
- Offer more online steps to the deal. Gaining ready-to-buy shoppers today starts with better customer access to consistent payment information, incentives, trade-in values and information, chat capabilities and pricing on protection options. That helps to clearly define the parameters of the deal and will ensure consistent communication. And it’s important to car buyers: 71% want to get information about the deal online.3
- Combine your website and dealership showroom process into a single streamlined experience. The last thing customers want to do is start the process over again when they arrive at your store: 43% want to secure financing online, and 51% want to structure the deal online.3 That’s right: half of car buyers want to select their products, make a deposit and finalize the price before they ever step foot in your dealership.
- Use digital retailing to create a “total retail” experience. Digital retailing creates a comprehensive process truly in sync with how consumers are actually researching and buying: digital expedience and dealership expertise working together. Consider that 57% want to perform purchase activities digitally while at the dealership.3 But that’s not all. A “total retail” experience extends far beyond the sale. In fact, half of the car buyers surveyed said they would be more likely to service their vehicle at a dealership that offered “online scheduling for service” and “online cost estimates.”3
- Focus on your staff. Introducing new technology and processes at your store is hard. You can’t just “turn it on” and reap the benefits. It takes patience and commitment. Getting your team up to speed on new customer handling and sales processes is the crux of successful digital retailing, and it could arguably be the hardest part of implementing digital retailing at your dealership.
In fact, this part of the implementation process is so crucial to your success that you may want to start slowly. Certainly, there are dealers who go with an “all-in” approach, but one best practice is to designate a couple digital retailing “champions” to handle all digital retailing leads. These team members would serve as concierges throughout the whole online and in-store process and allow your dealership to hone this new way of doing business while developing some best practices of your own. This is a great way to build a foundation for your digital retailing evolution, and it becomes a model for training when you are ready to roll it out dealership-wide.
Stay tuned for more in-depth articles on the people and process part of digital retailing. In the meantime, check out the e-book, Working Deals in a Digital World, which shares five steps to digital retailing success and focuses on the necessary shift in the dealership’s culture and mentality.
Times May Have Changed, But Quality Remains
The way we shop, buy and service vehicles is different today, thanks to the power of technology and information. But what stays constant and steady is the core, tangible value of an in-person experience. In fact, 8 out of 10 consumers would never purchase a car without a test drive, and 7 out of 10 would never purchase a car without physically seeing it first, even if a condition report is offered online.3 Indeed, even the Epsilon study found the same preference within their Amazon study: 69% of respondents said that “touching a product is an important part of shopping.”1
It’s simple: to touch something is to feel assured that it exists and is of high quality. Customers want the personal assurance of a quality experience. But they also want to leverage technology to make the process easier and more convenient. It’s almost as if car shoppers understand that buying a car takes time – which is why they want to bring digital and mobile tools into the process, to alleviate the long, slow grind – and help create a nimble experience better aligned to their lifestyles.
After all, when 89% of consumers still want to sign final paperwork at the dealership but 83% want to take at least one step online during their purchase,3 the message seems clear: the way to make car buying cool again is to integrate the power of digital retailing with the consistent service of a knowledgeable dealership staff.
- Epsilon: How to Win in the Amazon Era
- Cox Automotive 2018 Car Buyer Journey
- 2018 Cox Automotive Future of Digital Retail Study
- Cox Automotive Product Analytics, Accelerate Dealer Close Rate Product Analysis (September, 2018), which identified Digital Retailing clients using VinSolutions CRM and compared sold leads from Digital Retailing lead sources to other internet lead sources. This analysis excludes leads classified as “active.” Active leads are open opportunities not classified as lost or sold. Profit analysis based on increased F&I product purchases.