Whereas CarSaver has a very nice platform for conducting online transactions, it doesn't fit all.
Digital paperwork tools (what digital retailing should be called) require the dealer to change his world and add more systems to a process that is already quite complicated. And when they're implemented for the consumer to initiate the process things are even worse because the in-store experience isn't setup to work with the online one.
And it is the latter that is the large issue the OEMs don't understand. It takes a consumer AND A DEALER working together to make a car sale happen. If you build a Buy Now button on a website I don't care how fancy the workflow is if the dealer is under-represented. Traditionally, OEMs make this mistake time and time again.
This Digital Paperwork trend is not nearly as necessary as it was in March/April when dealership sales departments were declared non-essential for a few months in a few states. They're all open again. Looking back, less than 8% of consumers actually went through the process. For higher acceptance of Digital Paperwork tools the dealer has to use it as the in-store process.
And what good does that do them?
In most cases the digital paperwork tools cannot match the kind of flexibility desk managers are used to because they were coded by non-car-people. They barely understand how a lease is calculated, so expecting them to comprehend how to move trade equity around or better position dealer cash is waaaaaaaay over their heads. Then one needs to understand the APIs provided by companies like OfferLogix and Market Scan and how those mesh with NADA Guides, AIS, etc.
Lastly, the integrations needed to replace CRM paperwork and DMS printing are crazy expensive. So, your digital paperwork tool is well into the $1,500+ territory to hit margins. And now you're asking a dealer to spend $1,500+ on a certified CRM, $3,000+ on a DMS that works with the financial statement the OEM wants, $500+ on an approved website, and another $900+ on a digital paperwork tool that doesn't work with the CRM, is hacked into the website, and probably doesn't push to the DMS.
Why are digital paperwork tools so much?
Expenses in digital paperwork tools per rooftop:
- Calculation API cost ($100 to $500 a month)
- Incentives API ($75 to $300 a month)
- Taxes & Registration feed ($25 to $150 a month)
- CRM integration ($50 to $150 a month)
- DMS integration ($50 to $700 a month)
- Delivery mechanisms like email/texting ($2 to $40 a month)
- Inventory feed (free to $100 a month)
- Guide Books ($40 to $100 a month)
- Trade valuation ($5 to $100 a month)
- F&I products ($50 to $150 a month)
- Approval System ($30 to $100 a month)
- OEM program (5% to 30% of revenue)
- Cost of engineers
- Cost of support team
- Cost of sales team
- Cost of management
- Cost of hosting
- Other items