Reimagining Digital Retailing Software After Missing The Mark

So what happened to the predictions that 60% of buyers under 45 would be purchasing their next vehicle online (McKinsey, 2021)? How close is one manufacturer to reaching its 2025 goal to see 25% of new car sales completed online (Forbes, 2022)? What about the prediction that EV sales will be 100% online (Detroit Free Press)?

Pandemic Hype

Software companies that had digital retailing solutions available at the start of the pandemic saw a dramatic increase in demand and soon OEMs developed their own platforms to conduct sales online. The hype surrounding the demand for online sales tools is very similar to the hype about consumer demand for EVs.

One might even say that both DR and EV sales have missed the mark because the infrastructure was not in already place to support a major structural change. There is a growing number of EVs sitting on dealer lots with no buyers, which is not a surprise for seasoned dealer principals.

For the most part, the initial use cases put forth for digital retailing have never been realized. They were not supposed to be a supercharged lead generation tool.

There are many reasons why the promise of transacting online, in scale, has never been realized. In a sober assessment on current utilization of digital retailing (DR) tools, I can safely say that they are the dealer's best lead-generation source. This is a far cry from what was first sold to dealers during the pandemic.

Another observation is how DR tools are being implemented. The consistent utilization of one DR tool, online and in the showroom, is hard to find. The key word is consistently. Few dealers have re-engineered their showroom experience to match the workflows and prices that are shown online to create a seamless retail experience when consumers arrive in the showroom.

Watching DR Poll Numbers

I am watching a poll that Brian Pasch, MA is conducting on Linkedin, which is shown below. The final polling results showed that a small percentage of dealers are actually transacting online.

Market Forces Decelerated Transactional Online Sales

During the pandemic, with wild swings in supply and demand, dealers had the opportunity to sell vehicles over MSRP. This short lived phenomena put the brakes on online transactions. Why? The purchase prices shown online (via a DR tool) often did not reflect the dealer's market adjusted price addendum. Dealers knew that if they showed their true "out the door" price online, they would lose showroom traffic.

Explaining a $5,000 market adjustment price with an online shopper, over chat, is not very effective.

Dealers also had zero floor planning costs for a period of time. Since cars were selling so quickly, many dealers reverted to an old industry "word track" when consumers asked about vehicle pricing and payments online. "When can you come in to see the vehicle and have a test drive?" replaced working the deal online with collaborative retailing tools.

My reflections are not to be interpreted as critical to the industry I serve, I'm just stating facts that market forces have dampened enthusiasm for online sales. Today, it is clear that the majority of consumers WANT to visit the dealer's showroom.

Regardless of the past predictions, restrictive state laws that require a wet signature, and hype around online vehicle sales, it is clear that consumers prefer going to a local dealership before purchasing a vehicle.

If consumers want to visit a local dealer, what is the middle ground to create a better retail experience?

Dealers Also Hate Being Forced Into a Template

One of the other realities (that few talk about) is that hundreds of franchise dealers in 2023 don't offer a DR experience on their website. Other dealers may have a DR tool from the OEM, but they don't promote it and will try to bury the DR software as the 6th button on a vehicle listing page.

When I ask dealers who would like a DR tool but having pulled the trigger, their response normally falls into one of two categories. Some have told me that the tools on the market do not match their company culture and sales process. This is especially true for dealers that run a very profitable business. Others are fearful that being more transparent and centralizing some of the F&I offerings will result in losing good sales and F&I staff.

To address these concerns, I am offering a new approach for dealer groups who want to move closer to a frictionless sales experience.

Creating a Customized Online Retail Experience

Dealer eProcess has deliberately chosen to build their own software tools for important elements of automotive retail. These tools includes our popular trade evaluation software, soft-pull / hard pull credit technology, and more recently our inventory management platform. We built our current digital retailing platform using all these tools, but as many dealers know, OEM selection processes limit which tools can be added to dealer websites and qualify for co-op funds.

We are taking a new approach to helping dealer groups who want to bridge the gap between templated DR tools and simple form based websites. Dealer groups who invest in our Connected Retailing Platform (CRP) for the primary websites will now also benefit as we build a bespoke DR experience for their dealer group.

Dealer eProcess will customize our digital retailing technology to match the culture, sales processes, and workflows at dealer groups who have a vision to present a seamless shopping experience for their customers. No more templates, patches, and awkward workflows.

Our DR vision includes connecting our DR tools to Customer Data Platforms (CDP) to present the most personalized online experience based on accurate customer data.

As more dealer groups invest in CDPs, we believe that the online retailing experience should be fueled by the most accurate and up-to-date data for each consumer. Our advanced work in CDP integration will give dealers a competitive edge.

DEPs custom design services for online retailing experiences will be quoted based on the scope of work. The good news is that we have already built the tools to make a better digital retailing experience which compare well to other solutions on the market.

Dealers who are looking to reimagine their website and retailing experiences should reach out to our team to discuss building exactly what is needed to create a better, memorable retail sales and service experience.

It's your future. Let's create it together.

Imagine presenting a bespoke experience for each consumer who visit your website and explores the payments for the vehicles you have to offer.