Digital Retailing for Dealers - What are your results?
- Thread starter John V.
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Just a bunch of sales shenanigans. It felt like every trick in the book they tried - we're buying new and we live 3 miles away. The business is yours. If you're buying new and paying retail - it's the most transactional deal there is. But they made it so we never want to step foot in the place again.
As a consumer, that's really the scenario where it's like ok, I wish we could just do it all online. On the way home my wife was like let's just use Costco. So those bad experiences sort of ruin it for everyone else.
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I was running a DR start-up for the last ~3 years so I have a perspective from the guy trying to sell this shiny new technology to all you guys. As a background, we were integrated with all the necessary lending, F&I, credit players in this ecosystem that gave us the ability to provide an end-to-end transaction in approx 8-10 minutes on a consumer's mobile device. I felt the technology was pretty smooth...but....
Greg
- Costs. In order for any DR provider to truly provide an end-to-end solution allowing a consumer to purchase a vehicle on a mobile device off-lot the fees add up and add up fast thus you had us (and our competitors) needing to charge >$1.500/mo. just to to cover all the rooftop integration click charges and minimal overhead costs.
- Costs part 2. Now that a DR provider needs to charge this amount of money how does a dealership justify another $20K+/yr expense on a technology realllllllly difficult to measure what the precise sell through rate fully attributed to your DR solution versus all the other plug-ins mentioned on other's posts above.
- Costs part 3. The winning DR operational formula to really make this work is a stand alone technology that cuts out all the other tech providers in this space, i.e. build out your own Loan Origination Software, integrate directly to the insurance providers, build out your own credit scoring system, etc. as that will be the best way to provide a fully end-to-end solution that is affordable to the dealer principle at scale. This is actually quite achievable with the only caveat that you need a good amount of cash to pay your dev team to build out all of this and time to court/negotiate the integrations. I found getting the providers willing to integrate faaaaaar easier than getting $2K/mo out of a dealership.
- Consumers. Consumers generally would go through the complete purchase journey <10% of the time after they began the process which was initiated by them providing us general lead gen type of information.
- Consumers part 2. As we all know, not all consumers are equal and the 10% of those who started the process that went through the complete purchasing journey probably 25% of them actually had provided everything necessary to make the deal completely happen, so this translated to 2.5% of users who took the time to start entering in their information actually fully using the DR plug in on our dealer customer's sites.
Greg
I don't disagree with you -- I love the word "Cliched."
But overall (I don't know the Retail SAAR number), but just use 10 million. 10 million retail purchases. There are not 10 million miserable people as a result.
A vendor created solution to a problem we didn't know that we had. We tested a great DR tool that actually functioned correctly, only two problems - it costs $24k per year and customers don't use it. Other than that, it was fantastic. Take the $24k and spend it on training, spiffs or trips to Aruba for your people, they will all help you sell more cars than DR.
@Greg M - you've got a lot of likes on your post. I left you one because this is a phenomenal admission! And one that is so true. Are you still running your start-up? If so, I think there are some things to discuss further. Maybe on a RefreshFriday show?
Are you still running your start-up? If so, I think there are some things to discuss further. Maybe on a RefreshFriday show?
Thanks Alex,
We have the business on hold as we contemplate if we pursue moving forward with a DR-light model stripping out costs. If interested though, I would be more than happy to discuss further.
A lot of our focus has shifted to the online classified marketplace as it feels like there is an opportunity to address some of the dealer-publisher friction while giving consumers more than the current 1.0 experience provided by all the players in the classified space.
Greg
- Mar 17, 2011
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- Tarry
I just did a blog post on this topic "Does Digital Retailing Help Generate Sales?"
Here's an excerpt from it.
There is a misconception today that installing a Digital Retailing tool alone attracts more shoppers and ultimately more sales. Unfortunately, many dealers are left disappointed when their sales needle hasn’t moved. So what’s happening here???? “Buying” vs “Shopping” – What’s the difference?
Buying – Digital Retailing
The buying process helps the consumer move through the purchase process better, faster, and more enjoyable.
Shopping
The shopping process involves emotion, personalization, privacy, safety, technology and budget.
Digital Retailing has many benefits for building a better consumer experience, but it doesn’t solve the basic question that many consumers have “What car should I buy?” Shopping tools help guide the consumer on where to start and what to buy, which can generate more leads and feed directly into the digital retailing strategy.
Where are my Shopping Tools?
As we scan the automotive landscape looking for shopping tools, you notice a recurring theme. Many dealer’s sites throw every conceivable search and inventory filter at the consumer. This may work well for a buyer who has already narrowed their search, but can ignore a shopper’s needs. It simply puts the onus on the consumer to figure out where to go.
Shopping Journey – Where to Start?
Think about your typical dealer’s home page as a tool for the “Shopper” and not as a tool for the “Buyer”. Is it clear to the shopper what tools they can use to narrow their search? Should they search for new, used, what about certified pre-owned? What about specials, incentives or should they get pre-qualified. Or maybe they should value their trade-in first? Where do they start? When someone asks you for directions, they probably don’t want you to tell them five different ways to get there.
Here's an excerpt from it.
There is a misconception today that installing a Digital Retailing tool alone attracts more shoppers and ultimately more sales. Unfortunately, many dealers are left disappointed when their sales needle hasn’t moved. So what’s happening here???? “Buying” vs “Shopping” – What’s the difference?
Buying – Digital Retailing
The buying process helps the consumer move through the purchase process better, faster, and more enjoyable.
Shopping
The shopping process involves emotion, personalization, privacy, safety, technology and budget.
Digital Retailing has many benefits for building a better consumer experience, but it doesn’t solve the basic question that many consumers have “What car should I buy?” Shopping tools help guide the consumer on where to start and what to buy, which can generate more leads and feed directly into the digital retailing strategy.
Where are my Shopping Tools?
As we scan the automotive landscape looking for shopping tools, you notice a recurring theme. Many dealer’s sites throw every conceivable search and inventory filter at the consumer. This may work well for a buyer who has already narrowed their search, but can ignore a shopper’s needs. It simply puts the onus on the consumer to figure out where to go.
Shopping Journey – Where to Start?
Think about your typical dealer’s home page as a tool for the “Shopper” and not as a tool for the “Buyer”. Is it clear to the shopper what tools they can use to narrow their search? Should they search for new, used, what about certified pre-owned? What about specials, incentives or should they get pre-qualified. Or maybe they should value their trade-in first? Where do they start? When someone asks you for directions, they probably don’t want you to tell them five different ways to get there.
Thanks for sharing Tarry :thumbup:
We now have 2 people from Digital Retailing companies stating an online shopping cart solution, alone, does not move the needle for most dealers. On top of that, Michelle Donegeon (Roadster CMO) and I co-wrote a whitepaper that essentially said digital retailing isn't a silver bullet.
I think what everyone is saying is that Digital Retailing does not succeed unless it is part of the dealer's process. And I have to ask: does incorporating digital retailing into the process help move the needle?
