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Jennifer “Jenn” Reid, Vice President – Automotive Marketing & Strategy Lead – U.S. Information Solutions (USIS), Equifax
In a recent survey of more than 100 auto dealer professionals, approximately one out of every four respondents indicated they make a complete digital retailing offering available online to customers and shoppers before they ever step into the dealership. Given the industry’s continued focus involving digital retailing solutions, this might appear to be good news. However, the fact that roughly 74 percent of consumers indicated they want digital retaling as part of their car-shopping experience shows how much work remains.
While many agree that digital retail is defined as the complete spectrum of offerings, others might think that making their inventory available online encompasses a digital retail experience. The survey considers digital retailing as a complete online experience of research, shop, and transactions. Thus, dealers make available online to their customers the ability to research and build their vehicle with real-time inventory, arrange trade-in and financing, review the deal and complete the purchase–so that the consumer experiences a more seamless transaction.
Why more dealers are not leveraging digital retailing?
Why does such a gap exist today? Afterall, consumers are accustomed to the “Amazon Effect”, where they may fully research, shop, and transact a multitude of products online without ever stepping foot into a retail storefront.
According to the U.S. Census Bureaue-commerce sales comprised approximately 10 percent of total U.S. retail sales in the third quarter of 2018, which is significant when considering the total overall number of retail sales in 2018 reached $3.63 trillion. And it is not just computers and games that people are buying online: it is estimated that 20 percent of global grocery sales will take place online by 2020, reaching $100 billion in sales, according to Forbes. Before I roll out the list of items of what it will take to narrow the gap, understand that this does not mean we should do away with auto dealer storefronts. Between vehicle pickup/delivery, test drives (if requested), additional questions on F&I, and the all-important service and maintenance of vehicles, the rooftop will be even more important in the future.
What drives the experience for digital retailing is the connection of online and offline handoffs. The customer wants to show up at the dealership and pick up right where they left off online without missing a beat.
What components are needed for digital retailing?
The right digital retail solution starts with proper integration of all components, including lead-management systems, CRM, DMS, third-party and OEM websites, as well as lender information.
What drives the experience for digital retailing is the connection of online and offline handoffs
Moreover, robust verification digital solutions help to vet that consumers are who they say they are. The integration of these components is no easy task and is quite possibly the leading reason why such a gap exists today.
How to integrate the right customer experience?
Customers want the full automotive purchasing experience. They want to view real cars/inventory with real prices – similar to many online retail buying experiences. For the dealer, this means access to better, real-time data on everything, from supplytrade valuation to incentives to inventory procurement (pricing and regionality), are needed. Dealers need access to better, more accurate data that can help with profitability and online transparency.
What role does the storefront play?
As mentioned previously, the importance of integrating the storefront (offline) into the online experience are important connections. Consumers want a fair deal with a great experience from start to finish. Having the car ready upon arrival, presenting vehicle and F&I add-ons in a no-pressure yet educational process, and even providing the option to make alternate vehicle decisions creates a win-win scenario that builds a trustworthy, enjoyable experience.
Understanding what is needed, and having access to trusted partners, can bring this digital retailing experience to life and help narrow the gap between the dealers’ offer and the customer’s wants.