Dealers got better at selling vehicles online last year after their ability to sell in person was limited or shut off to reduce the spread of the coronavirus.
But many retailers and auto retailing experts say sales aren't likely to go completely digital anytime soon.
And "most people still want to touch it and feel it and get excited about it before they buy it," said Agresta, president of Benzel- Busch Motor Car Corp., which sells Mercedes- Benz and Audi vehicles in New York and New Jersey — two states hit hard by the virus and related government restrictions that closed dealership showrooms last spring.
"I kind of feel like this is going to take a lot longer to develop," he said of full automotive e-commerce.
Indeed, several dealers, retail technology vendors and industry consultants told Automotive News that it will take some time before a majority of consumers are buying vehicles fully online. But that doesn't mean the digital leap forward that auto retailers took in 2020 will stall as the industry emerges from the pandemic. The enhanced technology and digital sales strategies that dealerships adopted or refined last year should help improve one of the more challenging parts of the purchase process — the customer's transition from the online to in-store environment.
Making that switch more seamless than it is now would improve customers' satisfaction with buying a vehicle, experts say. Putting the tools and processes in place to complete seamless transitions may also become necessary as more consumers grow accustomed to shopping for vehicles online but fully digital buyers are still, in the near term, outnumbered by those who want to visit a dealership.
"The reality is, our customers want to be able to interact with us in physical showrooms and in the digital environment, and we need to be able to meet them wherever they want to shop," said Jeff Swickard, chairman of the Mercedes-Benz Dealer Board and CEO of Swickard Auto Group, which is based in Oregon and operates stores in five states.
Providing the digital tools and online and in-store processes to enable just that is the thrust of the omnichannel retailing strategies gaining steam with some of the nation's largest auto retailers, including Group 1 Automotive Inc. and CarMax Inc. Done well, proponents say, an omnichannel approach can save the customer and the dealership time, increase customers' trust in the process and keep up with consumers' growing expectations.
Industry veteran Ron Frey said dealers must shift their thinking around online sales away from digital retailing to what he terms modern retailing.
Under the modern-retailing approach, a dealer would envision the type of customer experience he or she wants to offer, install the technology that supports that experience and change the organizational structure as necessary to implement it, said Frey, a former CDK Global and AutoNation executive who now advises dealerships. Those changes could include adjustments to pay plans and more employee training.
Frey made the case for that approach nearly a year ago at the Automotive News Retail Forum: NADA in Las Vegas, shortly before the coronavirus crisis prompted many states and municipalities to restrict in-person business activity to limit transmission. The pandemic led many dealers to realize that they need digital retailing, and that digital retailing involves more than plugging in a technology tool, Frey said.
"How do I serve consumers in a virtual world?" he said. "That isn't a product — it's a mindset. It's the process."
More than 8 in 10 consumers surveyed by Cox Automotive in August said that doing as much of the purchase online as they wanted could make the in-store process seamless, according to a new study released last week. Nearly 80 percent of dealers polled said they agreed.
An effective omnichannel retail strategy makes the purchase process shorter, potentially alleviating one of the biggest pain points for customers today, said Brett Pomerantz, Cox Automotive's senior director of product for retail experience. In Cox's study, 86 percent of consumers said they expected that completing parts of the purchase digitally would save time once they got to the dealership.
"That omnichannel experience really delivers on the time savings," Pomerantz said. "You don't have to redo the different elements of what you were able to do online. You can come into the store prepared. You can come into the store with a deal in hand, and really now you're just confirming what you did online with this in-store experience."
Cox is rolling out a suite of products ahead of the 2021 NADA Show called Complete Retail, which the company says enhances its retail products, such as vehicle listings and dealership websites, and better links them with such tools as desking and remote signing. The goal is to improve the back-end workflow at a dealership, which in turn would speed up the deal process for both sales employees and customers and prevent having to redo steps, Cox said.
Jon Sederstrom, managing director of strategic initiatives for J.D. Power's global automotive division, told Automotive News that customers who spend hours researching online want that effort to translate into time saved at the dealership.
Achieving that will require dealers to choose technology and develop processes that provide a consistent experience, both for customers who want to do as much as they can online and for those who prefer to finish a deal in person, Sederstrom said. One way to do that is to use the same digital platform online and at the dealership.
"You have a real opportunity to make that connection and reward those customers who are doing some of the upfront work online, but that is going to be most effective if you continue using the tool in the showroom," he said.
Dealers should choose a tool that is user-friendly and can be used in the dealership as a sales employee works side-by-side with a customer, said David Kain, president of Kain Automotive, a dealership training company. It should be one that employees are comfortable using live with customers and that can pull up a shopper's transaction activity from the point at which he or she stopped, Kain said. Using a screen in the store similar to the one seen online helps build trust with consumers.
"That's what we're looking for, is that omnipresent, same experience, omnichannel approach — not from a marketing standpoint, but from a process standpoint," Kain said. "There's not any dealer that I've talked to that would be against that."
Agresta said his group is working on building a texting tool that will allow a sales employee to jump into a digital transaction with a customer and shorten the sales cycle by starting a purchase directly over chat, rather than through a traditional lead form.
If customers want to stay in the digital world, they should be able to, and if they want to transact in person, the text tool could facilitate the transition, he said.
"We want to jump in and keep them moving," Agresta said. "We don't want to stop the process."
Michael Martinez contributed to this report.
February 01, 2021 at 12:00PM
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Digital sales may help dealers with omnichannel retail - Automotive News
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