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Digital Retailing: Just a New Objection?

Christine Plunkett

Getting Refreshed
May 27, 2010
45
57
18
First Name
Christine
A few years ago, tech company managers were sitting around a room, and someone started lamenting about a bad experience they had buying a car… and someone else nodded their head… and by the end of the meeting, they had decided that customers don’t want to buy cars from dealers anymore; customers want to buy cars online. So — slap a calculator on the website so customers can figure their own payments, and never-mind that the payments are variably “close enough” (accuracy is overrated anyway). Of course… put a credit app online… and customers can already see inventory. PRESTO! Customers can do everything themselves.

And the Digital Retailing industry was born. And the best thing? DEALERS are going to pay the tab for these customer-facing solutions. One mention by a big company at NADA, and the industry was off to the races…

The problem? There were no dealers in that room full of tech managers. If there had been, maybe the industry would have realized that “Digital Retailing” is not a consumer-facing problem to solve. Maybe a dealer could have told them that most customers, the majority of consumers, want help from the dealer. Most customers are overall very satisfied with the dealer during and after a transaction. That in fact, it’s often the archaic tools in place at the dealership that create the confusion and logjams that result in those negative scores about the process. And there you have it: the reason that most dealers reject digital retailing tools and that digital retailing solutions have poor market share in the industry is that the tools were designed to bypass a process, instead of streamline a process.

I mean, how does this conversation help the customer or the dealer?

“Well, Ms. Customer, the payment you saw on our website is pretty close to the real payment you’ll have on this car. How close did you say? Well, why don’t we set an appointment to discuss….”

Is this progress? A solution that creates a new objection to overcome isn’t much of a solution. Or am I nuts?

But…. what if the solution actually puts the salesperson and the customer on the same page? What if, god forbid, your tools were actually good enough to work on the floor AND easy enough for the customers to use? Can you imagine what would happen if salespeople and customers were actually using the same set of tools? Isn’t that the very transparency dealers have been striving to provide and customers have been clamoring to experience?

What if the industry concentrated on building bridges vs. avoiding the river?
 

Eric88

Noob
Jan 27, 2019
25
12
8
First Name
Erik
This is actually an interesting problem area. I think customers started getting used to the Amazon experience, and as that expectation ratcheted up, dealers tried to add more tools for customers to use.

One idea is a digital retailing program actually circumvents virtually every internal dealer process. What if a customer could fill out a credit app, secure a lender approval, look at cars in their range, pick a payment, buy VSC and GAP, and the company overnighted the entire deal jacket to the dealer? What if the customer shows up to the dealership to receive their car, and then off they go? Is something like that too hands off? Or would auto dealers appreciate being able to sell a car with virtually no labor whatsoever?
 

john.quinn

Sr. Refresher
Dec 2, 2009
988
602
93
First Name
John
What if a customer could fill out a credit app, secure a lender approval, look at cars in their range, pick a payment, buy VSC and GAP, and the company overnighted the entire deal jacket to the dealer?
Would you buy a car this way? Would you buy a house this way? Even your living room furniture?

Some people would, sure. Right now, "how many" is "not many." There's options to do that now. Some people do it. Not many.

But geez Louise... if you're not a Ford or GM dealer, you can't appreciate this... GM and Ford dealers will laugh WITH me here: Can you IMAGINE customers going through the entirety of the Program/Incentive lists to find those for which they qualify???? Or just deal structure... 19-40ACS??? haha. No chance.

Honestly, it's the "Marketers" who say, "C'mon we just need a credit app, a calculator, and a website and we can sell cars "online." haha. You'll not find a single person with ANY REAL retail operational experience who is so naive.

And another point here, and NO ONE talks about this. YES, there are pain points to be addressed, but people DO have fun buying cars. I mean... 15,000,000ish retail deals last year?

There is no doubt that once we get beyond the B.S. Buzzword version of Digital Retailing referenced in today's market, V2 or V3 of DR will look and act much differently than the overwhelming barrage of website plug-in crap dealers are (mostly) rejecting now.
 

craigh

Super Moderator
May 19, 2011
1,665
1,076
113
First Name
Craig
Would you buy a car this way? Would you buy a house this way? Even your living room furniture?
Honestly, it's the "Marketers" who say, "C'mon we just need a credit app, a calculator, and a website and we can sell cars "online." haha. You'll not find a single person with ANY REAL retail operational experience who is so naive.
Agreed.
What I've seen dealers have success with is when they add online sales to their website using an additional vendor, but don't change any other processes. Almost every digital retailer is just sending a "fully qualified" lead to the dealership at the end of the process. The customer may be further in the funnel, but the reality is that most of them are just sending an ADF lead to the CRM.
Dealers that treat it as a casual option for the 5-10% of customers that are willing to go through this process alone seem to do well.
Dealers that try and remodel their whole store to become an online sales experience seem to be scratching their heads wondering why it isn't working.
 
Reactions: john.quinn

Alex Snyder

President Skroob
May 1, 2006
2,797
1,412
113
First Name
Alex
It is hard to deny the consumer is getting more and more comfortable buying things based on online descriptions. I've bought most of the furniture for my home online and am in the process of doing this for an entire office space. My house... that was one I needed to see in person. The office... again, one I needed to see in person. I will commit to a car purchase online (in the process of doing that now), but I will not do the entire deal outside of the dealership.

Paint me in that 5-10% of customers @craigh is talking about.

But I have to agree with @john.quinn on his points about the gross underestimation that has occurred on Digital Retailing. It has been implemented wrong for the masses and that is getting more obvious daily. The problem seems to fester from the fact that the people working the sales floor are not included in the process. Because of this, they do not honor what's been done online. And it is really that simple.

Digital Retailing cannot be solved until it is just Retailing.
 

craigh

Super Moderator
May 19, 2011
1,665
1,076
113
First Name
Craig
IBecause of this, they do not honor what's been done online.
I love going through a CRM and seeing the responses to digital retailing "deals".
"When would you like to come see the car?" - the sales person often likes to bring the customer right back to step 1 in the process.
 
Reactions: john.quinn

Eric88

Noob
Jan 27, 2019
25
12
8
First Name
Erik
Would you buy a car this way? Would you buy a house this way? Even your living room furniture?
Yes, I'd definitely buy a car this way. Not a house, though. And I did buy my living room furniture this way! We're out here. :D

But geez Louise... if you're not a Ford or GM dealer, you can't appreciate this... GM and Ford dealers will laugh WITH me here: Can you IMAGINE customers going through the entirety of the Program/Incentive lists to find those for which they qualify???? Or just deal structure... 19-40ACS??? haha. No chance.
I think this is why we've seen most of the work done in this space (at least with Carvana and some other DR solutions) on used. I know exactly what you're talking about. The customer wouldn't know how to properly apply the incentives, but the rules for how and when incentives can be applied can be programmed. Nonetheless, launching something like this would be infinitely easier to apply to used cars, but it should be working to bring this idea to new cars as quickly as possible. At this point, many manufacturers probably have APIs to help this process.

Honestly, it's the "Marketers" who say, "C'mon we just need a credit app, a calculator, and a website and we can sell cars "online." haha. You'll not find a single person with ANY REAL retail operational experience who is so naive.
I laugh at marketers when they take this [very] naive stance. I also resent them for poisoning the well, so to speak. Generally, I don't think marketers really understand the car buying process. It's going to take someone who knows the business to be able to know what to promise.

And another point here, and NO ONE talks about this. YES, there are pain points to be addressed, but people DO have fun buying cars. I mean... 15,000,000ish retail deals last year?
A lot of people enjoy the car buying process, I agree. I am kind of one of them. Selecting a car is fun and test driving it is fun, but the rest of the process is a drag. But I don't think that's something that can be substantiated just by looking at last year's sales numbers. Surely some percentage of people bought new cars because they enjoy buying new cars, but I think that's low on the list of motivators. And nobody likes getting beaten up in the box, or waiting for eons to get their new car so they can go home.
 
Reactions: john.quinn

Eric88

Noob
Jan 27, 2019
25
12
8
First Name
Erik
I love going through a CRM and seeing the responses to digital retailing "deals".
"When would you like to come see the car?" - the sales person often likes to bring the customer right back to step 1 in the process.
If a truly comprehensive DR solution existed that could deliver a signed contract to the dealer (which I believe it can), it would not be in anyone's interest to unwind that deal. And it wouldn't please the folks providing the solution, either.

Maybe a salesperson, who thinks they could flip the customer, but they'd be trading a sure thing for something a little less certain. My guess is that the sales manager wouldn't allow it, especially if/when they end up losing the sale when they try it.

Maybe incentivizing the salesperson in a different way would be a way to combat this? When I bought my Audi they had a special person there to handle the delivery. I imagine something like that could work.
 

Mike Rod

Noob
Aug 27, 2019
9
7
3
First Name
Mike
I never understood how anyone can even buy an everyday car online without test driving it. Have you ever had someone simply walk in and be like "I will take it" without testing it? I never have. Everyone sits in the car, they look around, they place their hands on the steering wheel and twist their hands on the steering wheel to get a sense of "what will this car feel like when driving it" and so fourth. I think I have come across a few sites that ask if you would like to enter your information to have it ready for when you arrive which makes sense, but to flat out buy it before test driving it? I feel buying a car is a very personal purchase like buying clothing. People like to make sure they fit in the car
 

Marc Lavoie

Refresher
Jan 3, 2019
127
74
28
First Name
Marc
Made easy through PEOPLE, buying a new car has little to no comparable. It's truly fun when made right.

For me, I buy sight unseen, but I still think I'm an exception. I read about cars every day for fun.

If you want to make money, don't focus on exceptions... I have yet to see a dealership landing more than 50% of their deals 100% online.

We have to be very careful because it's not because it can be done, that it should be done.