By Brian Pasch
I recently attended an Automotive Lenders Conference in New York City hosted by Dealertrack Technologies. The speakers and discussions surrounding Digital Retailing inspired me to write this post.
Digital Retailing is a relatively new term for car dealers, and it pertains to the automation of the car buying process online.
Digital Retailing (DR) is in its infancy; the definition will surely expand as new offerings come to market.
Today Digital Retailing includes website-based tools to search inventory by payment and calculate an accurate first pencil to establish a monthly payment and create smarter online credit applications and precise trade-in valuations. DR is empowering consumers with new tools to expedite their shopping experience.
Once only available when the consumer visited the dealership, Digital Retailing tools provide answers to consumers directly on the dealership’s website.
Not all dealers are ready to embrace DR, but those that have are smiling. Josh Aaronson and Lou Bregou have embraced DR and are very glad that they have the jump on their competition.
The Consumer Demand for DR
At the Dealertrack Conference, I moderated a panel with two successful dealership groups that have embraced DR. Their website statistics have shown a steady growth on online credit application submissions, year over year.
At the Yonkers Automall, Josh Aaronson has seen a strong increase in online credit applications in 2013, which are already up over 26% from 2012.
According to Josh, “Most interesting, is that consumers with PRIME credit are completing online credit applications and not just those with sub-prime credit.”
Dealers can choose how to implement Digital Retailing software; the variations are endless.
Lou Bregou from Driver’s Village in Syracuse, New York decided that he wanted automated routining of online credit applications through Dealertrack. The software will take credit applications and process them in real-time. The Dealertrack software routes applications to banks that the dealer chooses; very important. The software can also apply current loan programs offered on per a VIN basis if the consumer is interested in financing a specific vehicle.
When consumers submit credit applications after the dealership is closed, they have a list of people to call with approvals by the time the dealer’s sales department arrives in the morning. When the dealership calls in the morning, the consumers are actually pleasantly shocked that they were approved so quickly. The dealers on the panel shared that the closing ratio of pre-approved consumers, using DR, is extremely high – over 40% is the norm.
Digital Retailing Will Be Disruptive
Dealers who have been purchasing sub-prime leads now have new tools to power their own websites, landing pages, and microsites with tools to capture their own first party credit leads. Digital Retailing will elevate and differentiate dealers in the Zero Moment of Truth (ZMOT) with more transparent pricing and self-service options.
Digital Retailing will also impact the conversion rates of landing pages used in Digital Marketing. DR software has the potential to dramatically change the perception of the car buying experience. Our industry is just testing the best ways to integrate Digital Marketing and Digital Retailing, and PCG will be at the forefront of that research.
Digital Retailing does not diminish the need or role of sales professionals, but it will change the sales process. This will be an exciting time for car dealers who embrace the digital retailing movement to perfect the new sales processes and how to integrate traditional value added up-selling in the F&I office.
The move to provide more self-service tools on the dealer’s website is exciting. Dealers no longer have to be captive to drive traffic to third parties or wait for third parties to deliver leads.
Are high quality, third party lead generations companies valuable in our eco-system? Absolutely. The best third party lead generation networks offer the economy of scale that can deliver an ROI that cannot be easily matched by all the dealer’s advertising channels.
The good news is that Digital Retailing will transform dealership websites to be a more relevant and higher converting sales tools, which is exactly what dealers have been asking for!
Dealers interesting in the latest Digital Retailing strategies should register for AutoCon 2013, September 4-6th at the beautiful Aria Hotel & Casino in Las Vegas. The conference will host a number of workshops on Digital Retailing. Information on the conference can be found at http://www.AutoCon2013.com or by calling Carrie Hemphill at 908-601-6475.
Brian Pasch, CEO