Digital Retailing for Dealers - What are your results?

[Rick Buffkin]

I would replace "dealer's process" with "customer's process".

 

[Zhendrix]

I'm just teasin' @Alex Snyder here. But in reality, it's consumer driven, is it not? If consumers just aren't ready to buy a car online or optimize a showroom visit by using a DR tool then it really doesn't matter what the process or tech is.

 

[Tarry Shebesta]

I'm just teasin' @Alex Snyder here. But in reality, it's consumer driven, is it not? If consumers just aren't ready to buy a car online or optimize a showroom visit by using a DR tool then it really doesn't matter what the process or tech is.

We've been doing online car sales since 1993 thru the Cars forum on Compuserve.

In 2008 we managed the entire eBay Motors Finance Center where almost 90% of the buyers and sellers were NEVER in the same state. Contracts at that time were PDF'd and customers printed, signed, and returned the docs for funding.

11 years ago everything as possible was online and consumers responded.

Henry Ford said if you asked customers at the time what they wanted, they said "a faster horse". Nobody knew they needed an iPod, iPad or iPhone until Steve Jobs delivered it to them.

You have to think outside the box. DR today only duplicates the offline selling process which is not revolutionary or inspiring.

Current DR is not the answer .... stay tuned .....

 

[Alex Snyder]

I'm just teasin' @Alex Snyder here. But in reality, it's consumer driven, is it not? If consumers just aren't ready to buy a car online or optimize a showroom visit by using a DR tool then it really doesn't matter what the process or tech is.

Brian Pasch has labeled me the digital retailing contrarian so allow me to opine on my contrary stance. You may be teasing, but I believe you threw me a giant softball. Thanks Zach!

Approaching digital retailing from the customer's perspective is why it was created in the first place. During my Dealer.com career, a good friend of mine named Jai Macker (currently heading the Autotrader product) came to @john.quinn, @joe.pistell, and me with a way to finally provide an online vehicle transaction in Dealer.com websites that would appease the consumer. It would save them tons of time. The capabilities sounded fantastic, but the approach had very little to do with how the dealer actually did business. We immediately poked significant holes in the idea. Holes that could only be understood by people who had earned commission checks pushing metal over the curb. The idea was still pursued but became a bit perverted by all the acquisitions and bureaucracy that followed. Jai did alright, but his original vision sure went through a cheese grater.

At best digital retailing is a lead capture tool. At worst it is so convoluted and confusing it is a bounce engine.

Because it was approached from the consumer perspective it is failing. It never accounted for the way dealers do business.

Here are some problems on accuracy to start:

1. The digital retailing tool does not use the same calculations the dealer does, so (mostly lease) payments don't match
2. Dealers have different policies for how down payment money is applied to the lease cap and many developers don't know how to work with that
3. Taxes can vary significantly from one zip code to the next in some states - hell, tax rates can vary within the same zip code! A lot of dealers can't even explain how it works. Techies need expert desking people on staff with an aptitude for algebraic equations.
4. Some states have different ways trade equity is handled
5. Some states tax differently depending on the purchase price, contract price, or monthly payment amount
6. Many states tax differently depending on how the car is paid for
7. Incentives from OEMs can vary on SO MANY different terms and variables it will make you sick (I'm looking at you GM)
8. Inventory feeds are not always accurate
9. What equipment is actually on a new car determines what incentives apply and we know how often that is 100% correct
10. What equipment is actually on a used car impacts the book value needed to figure out what the advance is
11. Which book value to use can vary by lender
12. Not all lenders publish rates to remain competitive - in those cases, payments cannot be displayed for those lenders without a full credit app

Some other technical things people don't think about on the surface

• Storing PII data (even if for a nanosecond) requires SERIOUS security
• Keeping a web service fast for all devices at speeds down to 4G is incredibly limiting (have you seen how slow your dealership website is these days?)
• Can you tell people that Microsoft doesn't even support Internet Explorer anymore?
• Fusing good technology into someone else's bad technology is on par with having unprotected sex in warlord-controlled parts of Africa

And lastly, there are the operational parts of car buying that take 4 hours in the store - this is the part that truly makes digital retailing fail. And here is the golden statement: If the CRM or DMS is used as the desking, paperwork, and/or contracting piece it is the center of the dealer's operational process. If the digital retailing solution is not working directly with at least the CRM it is a process burden on the dealership staff. So many issues come into focus once this is realized.

 

[John V.]

PREACH!!!

 

[Tarry Shebesta]

Here are some problems on accuracy to start:

1. The digital retailing tool does not use the same calculations the dealer does, so (mostly lease) payments don't match
2. Dealers have different policies for how down payment money is applied to the lease cap and many developers don't know how to work with that
3. Taxes can vary significantly from one zip code to the next in some states - hell, tax rates can vary within the same zip code! A lot of dealers can't even explain how it works. Techies need expert desking people on staff with an aptitude for algebraic equations.
4. Some states have different ways trade equity is handled
5. Some states tax differently depending on the purchase price, contract price, or monthly payment amount
6. Many states tax differently depending on how the car is paid for
7. Incentives from OEMs can vary on SO MANY different terms and variables it will make you sick (I'm looking at you GM)
8. Inventory feeds are not always accurate
9. What equipment is actually on a new car determines what incentives apply and we know how often that is 100% correct
10. What equipment is actually on a used car impacts the book value needed to figure out what the advance is
11. Which book value to use can vary by lender
12. Not all lenders publish rates to remain competitive - in those cases, payments cannot be displayed for those lenders without a full credit app

Some other technical things people don't think about on the surface

• Storing PII data (even if for a nanosecond) requires SERIOUS security
• Keeping a web service fast for all devices at speeds down to 4G is incredibly limiting (have you seen how slow your dealership website is these days?)
• Can you tell people that Microsoft doesn't even support Internet Explorer anymore?
• Fusing good technology into someone else's bad technology is on par with having unprotected sex in warlord-controlled parts of Africa

And lastly, there are the operational parts of car buying that take 4 hours in the store - this is the part that truly makes digital retailing fail. And here is the golden statement: If the CRM or DMS is used as the desking, paperwork, and/or contracting piece it is the center of the dealer's operational process. If the digital retailing solution is not working directly with at least the CRM it is a process burden on the dealership staff. So many issues come into focus once this is realized.

1-12 has been solved and you are missing a few, like MMR. When we launched LeaseCompare.com in 2000, we had leasing licenses for every state. We had to collect and pay sales tax for each State and do all the titling and plates. This without ever seeing the customer. We built our own loan origination system (LOS) that had a direct pipe into RouteOne . We created our own decisioning engine and credit applications, along with deal structures (including F&I products), were submitted thru RotueOne to our indirect lenders and a response (final credit decision) was sent back into our LOS. Any required supporting documentation (POI, Drivers License, Insurance, etc) was uploaded to our system and all documents were automatically created as a PDF for customer to print, sign, and return (before electronic contracting).

We bypassed the technical things you mentioned above because we were the dealer, lender and the technology company all rolled into one. Oh, and a fraud prevention system. (I spent 4 hours on the witness stand in Chicago a few years ago, in conjunction with the FBI, to put away some bad industry guys)

When we rolled this out to dealers in 2008 that's where the tech issues you mention became relevant and is why we have roadblocks to an end-to-end franchise dealer solution.

Do you know why DealerTrack will NEVER support the model above? The answer lies in one of the reasons they (DealerTrack & ALG [WebALG]) sued us in 2000 to try and shut down LeaseCompare.com.

 

[Carluminati]

Has anyone ever asked the last 10 car shoppers they talked to whether or not they were excited to buy a car online? I have. But like everyone else, my GM suspected online retail would sweep our town. Ha. I can tell you we were 100% all in for about 15 days a few years back, but decided to bail after all leads imploded on our CDK platform, lead traffic stopped, nobody wanted to play, or buy online. Panic set in, since we need volume, not onesies and twosies. As soon as we dropped the buy it now program on the website, the leads started flowing. Soon as we replaced CDK, the sun came back out and all the creatures of the world rejoiced.

 

[Alex Snyder]

1-12 has been solved and you are missing a few, like MMR.

They are absolutely not solved Tarry. There are solutions that have done a better job than others at taking care of some of them, but there are 50+ digital retailing solutions that are not doing all of those 12 items properly. If you are not one of those solutions, here's a cookie

Some of the most utilized digital retailing solutions are not showing the same payments dealers are showing in their stores.

 

[Tarry Shebesta]

They are absolutely not solved Tarry. There are solutions that have done a better job than others at taking care of some of them, but there are 50+ digital retailing solutions that are not doing all of those 12 items properly. If you are not one of those solutions, here's a cookie

Some of the most utilized digital retailing solutions are not showing the same payments dealers are showing in their stores.

Sorry, you are correct. for the now 50+ digital solutions they are absolutely NOT quoting correct monthly payments. Almost ALL of them do not do their own payment quoting and NONE of them are based on real credit. Not one company has ALL the data. We currently use multiple data sources plus our own data generation efforts.

We are NOT one of those solutions and we have solved 1-12 with our own (the only one I'm aware of) payment quoting decisioning engine. You can't create accurate payments on a credit score alone, let alone having the customer supply it.

Our plan is to open our truPayments payment quoting decisioning engine API to others in the industry to help them solve 1-12.

Previously Drive Motors (now Modal) came to us to do their payment quoting. At the time our data partners did not allow that. Now we are open to powering other DR tools that need 1-12 solved.

I'll take that cookie now

 

[Tarry Shebesta]

Has anyone ever asked the last 10 car shoppers they talked to whether or not they were excited to buy a car online? I have. But like everyone else, my GM suspected online retail would sweep our town. Ha. I can tell you we were 100% all in for about 15 days a few years back, but decided to bail after all leads imploded on our CDK platform, lead traffic stopped, nobody wanted to play, or buy online. Panic set in, since we need volume, not onesies and twosies. As soon as we dropped the buy it now program on the website, the leads started flowing. Soon as we replaced CDK, the sun came back out and all the creatures of the world rejoiced.

There are certain CTAs that do engage shoppers on a particular car to move forward. It's NOT usually a "Start Your Deal" or similar CTA. There are a few pieces that need to be solved along the way. Nobody believes generic info on a dealer's website.

87% of dealer respondents agreed that it’s common for payment estimator tools to provide inaccurate or unrealistic payment expectations.
2019 eLEND Solutions Survey