Tag Archive | "digital retailing"

Digital Retailing Solves Top Consumer and Dealer Issues


The automotive industry is in a frenzy over selling cars online. Pure online retailers and rising consumer expectations are applying enough pressure for traditional dealers to know that they have to add the online option for car buyers. However, when dealers hear Cox Automotive Chief Economist Jonathan Smoke say that we are moving into a “post peak period” for the U.S. auto industry, they may wonder how a tightening market and digital retailing can coexist.

What’s Next, a Car in a Shopping Cart?

Let’s face it, ordering Thursday night’s dinner or a pair of shoes online does not begin to approach the complexity of a vehicle purchase. Why can’t automotive easily replicate that success? We can definitely learn from these nonautomotive examples and integrate some of the consumer-friendly options offered in other retail categories. However, it is up to the automotive industry to meet consumer expectations for making car buying easier, more efficient and fun.

Consumers are in the driver’s seat when it comes to how they want to purchase vehicles. As a result, dealers need to adapt or they will get left behind. In recent years, Cox Automotive research has shown the persistent frustrations car buyers have with the F&I process, which includes negotiating the purchase price, finding a good deal, and valuing the trade-in.

So if dealers do nothing other than address these ongoing frustrations, they will be miles ahead on the journey to provide consumers with a superior buying experience. In other words, putting the paperwork online isn’t the first place dealers should look to begin their journey into the digital retailing transformation.

What Consumers Want vs. What Dealers Provide

Consumers want a convenient (and that means digital) buying experience. Research proves this over and over. For now, let’s focus on millennials. It might not be the greatest generation, but it is certainly the largest, comprising 75.4 million potential buyers. This generation was shaped by the smartphone and has never lived without the internet. They account for 29% of new car sales today and will make up 40% in 2020. Perhaps wiser from recent student debt, millennials are driven by budget more than any other generation, and 83% say that an affordable monthly payment is very important.

Across all generations of car buyers, we find that 61% want dealers to allow them to review prices, payments and add-ons before the F&I process begins. A convincing 83% are interested in learning about F&I products before entering the dealership. Finally, 63% are more likely to buy F&I products if they can learn more about them on their own time, before finalizing the vehicle purchase.

Since we already know what consumers want, what is the problem? The problem is what most dealers provide. By not adapting their sales process and operations, dealers put consumers on an emotional instore roller coaster. Most of the time in the dealership is spent in a valley of negative emotion during a prolonged and stressful buying process.

The Way Forward

Dealers should embrace digitizing the buying process to meet consumer expectations. Digital retailing is a win-win because it can vastly improve dealership efficiency — and profitability — by enabling dealers to work deals, not leads.

As a first step, dealers need to replace the payment calculator on their dealership website with a self-penciling tool on the vehicle display page (VDP) in order to start deals online. Basic payment calculators give buyers bad information because they have an uncontrolled tool that allows them to enter unrealistic deal terms.

Shifting the conversation from price to payment meets 90% of consumers’ needs who buy based on their monthly budgets. And because buyers lead themselves to the “Yes” through a more comfortable and convenient online process, dealers can achieve higher profits when the conversation shifts off price to payment.

A digital retailing self-penciling experience on the VDP allows the dealer to control the parameters that build the deal structure and the vehicle-specific advertised monthly payments. When shoppers select their credit tier and/or finance or lease term, enter their trade information and adjust their preferred cash down, they are leading themselves to the right amount of car and farther down the path to the purchase.

This self-directed part of the journey is happening before dealers invest the time and money of the traditional labor-intensive sales process — a process that consumers would rather fast forward through online. With a self-penciling tool, dealers and consumers can avoid payment misunderstandings because the consumer is seeing a real payment based on real terms.

In the second step, car buyers and dealers agree on terms and make deals online. This is when dealers negotiate price and consumers fill out their finance application and receive approval. This step should include a full protection product catalog and monthly payments. In today’s virtual world, it is possible to build strong online relationships. Using tactics and tools to nurture a good virtual relationship will translate to a strong in-person relationship when the customer comes into the store to confirm the deal, test-drive the vehicle and sign the paperwork.

Contrary to what some people might lead you to believe, the final step in digital retailing is not putting a car in a shopping cart. There has been much fanfare about the prospect of buying online, but consumer research doesn’t support the idea of end-to-end click-to-buy for the majority of consumers. However, most consumers will appreciate — and expect — the convenience of electronic paperwork and esignature after test-driving the vehicle.

By digitizing the F&I process, dealers can simultaneously solve the top car buyer frustrations, achieve higher F&I product penetration, and become more efficient and profitable. While we are still in the early adoption phase of digital retailing, we have surveyed people who have used existing digital tools and they report being two to three times more satisfied with the process. They are more satisfied with virtually communicating with the salesperson, negotiating the deal, and the amount of time spent in the dealership.

Research says that, rather than being a concern, online F&I presentations are an opportunity. Most consumers report that they are more likely to purchase certain F&I products if they do part or all of the research at home or online. Additionally, digital retailing can be a profit center for dealerships because we found that cars sell faster and average more gross profit. And, by eliminating that “valley of negative emotion” for consumers, you will have happier and more loyal customers who enjoy visiting the dealership for the delivery and service.

 

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Roadster Adds Southern California’s Longo Toyota


SAN FRANCISCO — Roadster is on the move. The startup has secured additional funding and added the largest Toyota dealership in the world to its digital retailing platform.

The ecommerce solution provider today announced that Penske Motor Group’s flagship dealership, Longo Toyota, is now plugged into its Express Storefront ecommerce platform. The El Monte, Calif-based dealership this year celebrated its 50th consecutive year as the No. 1 Toyota dealership in the world.

“While buying a car is much more complicated than buying a toaster online, shoppers increasingly want a similar experience,” said Brendan Harrington, president of Longo Toyota, which averages 30,000 unit sales annually between its Toyota and Lexus stores. “With the help of Roadster’s technology, our sales team can help our guests configure their purchase either online or in-store, and have the vehicle washed and ready in less than two hours.”

First adopted by San Rafael, Calif.-based Toyota Marin in July 2016, Roadster is now being used by 85 dealerships in 21 states and across 22 brands. One of the company’s most recent additions was Paragon Honda and Paragon Acura in Queens, N.Y., which added Express Storefront earlier this month.

Roadster officials also revealed this week that the startup raised $7.25 million in additional funding from Palo Alto, Calif.-based venture capital firm Costanoa Ventures. The new funding round will be directed toward building more field teams, dealer support teams, and dealer success managers.

Through the Roadster Express Storefront, dealerships can offer their entire inventory of vehicles to consumers online. Consumers can design their deal anyway they want, whether it’s a cash, finance or lease purchase. They also have the option to select the finance source and finance incentive that fits their budget. Buyers can also take advantage of Kelley Blue Book’s Instant Cash Offer if they have a trade-in and also purchase F&I products straight from the dealership’s website.

The platform is also designed to work as an in-store mobile app that allows tablet-equipped salespeople to guide customers through the Express Storefront buying process.

“Instead of being six to eight hours to buy a car, we’re taking three to six hours out of that process,” said Roadster CEO Any Moss. “The consumers in some ways are less fatigued by the time they get to the F&I office, and all those things kind of contribute to maintaining or even increasing the sort of the back-end growth that you can expect on these kinds of transactions.”

Longo’s Harrington added: “As the largest volume automobile dealership in the world, guest experience and high efficiency are extremely important to us. We believe [Roadster] is the most modern and comprehensive solution on the market.”

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Fastlane Launches Online Car-Buying Platform


DALLAS — Startup Fastlane this week launched a new ecommerce platform for automotive dealerships. It offers dealers the ability to customize and brand their online car-buying experience, while providing customers with a start-to-finish purchasing process.

Dealers use Fastlane to showcase their inventory, help their customers pick out the car they want, and choose other purchase components such as financing, service contracts and insurance, officials said.

“Fastlane has taken online car-buying to the next level by letting dealers customize their online check-out flow,” said David Luce, Fastlane’s vice president of sales. “Other car-buying platforms have a cookie cutter check-out flow that cannot be changed. Fastlane recognizes that dealers in one market, such as New York, may sell cars differently from dealers in other markets, such as Georgia or California. Fastlane offers dealers a way to personalize the online car-buying experience to meet their customers’ needs, while adding value to the overall purchase experience.”

Brandon Hall, Fastlane’s CEO, added: “Fastlane is much more than a lead-generating tool for dealers. It is a complete car-buying system, with advanced features and customizability. The platform seamlessly walks customers through the many aspects of the buying process.”

Online shoppers who land on a dealer’s website equipped with Fastlane’s platform can pick out their vehicle, get a value for their trade-in vehicle, get pre-approved for financing and even educate themselves on F&I products and vehicle insurance.

“Online car-buying certainly has its benefits, but that doesn’t eliminate the need for car owners to have a good relationship with a dealer. Our goal is to supplement current dealer operations by adding a unique customer experience through our online checkout,” Hall said. “We are here to make online car buying advantageous for car dealers and customers alike by fostering new ways of engagement and creating a dynamic shopping experience for all parties. It’s the best of both worlds.”

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New Report Reveals ‘Apparent Consumer Appetite’ for Chatbots


BOCA RATON, Fla. — A new study reveals an apparent appetite among consumers for chatbots, but it concluded that these digital boxes that allow customers to converse with a human or AI-enabled bot still have ways to go before impacting business.

Released today by mobile marketing firm 3Cinteractive Corp. (3C), the Chatbot Consumer Report provides an in-depth look at how consumers interact with chatbots and their preferences on using the technology when communicating with brands. Its findings are based on an online poll of 500 U.S. households.

According to results, a quarter of the consumers surveyed said they use chatbots on a daily basis (40% alone for Millennials).When consumers were asked why they thought chatbots were not valuable, 71% said the chatbot could not answer their question or help them. That means businesses will need to expand the capabilities of their chatbots as the technology advances to keep up with growing consumer expectation, 3C officials said.

When asked which tasks they’d prefer a chatbot to handle for a brand vs. a human, checking order status (46%) and product research (42%) rose to the top of the list. But for other tasks, consumers polled still preferred humans over chatbots — 50% for customer service inquiries, and 44% for making an appointment or reservation.

This data is critical for brands since 83% of respondents said they would be more loyal to a brand for offering a chatbot that enables these tasks. Additionally, Business Insider reported earlier this year that 80% of business plan to have chatbots by 2020.

“Choosing the right chatbot strategy for your brand is critical, it’s not one size fits all,” said Margie Kupfer, vice president of marketing at 3C. “Understand your customer preferences and build your chatbot strategy around a specific function that benefits the customer. Starting small and executing your chatbot successfully ensures a positive brand experience and allows you to learn more about your customer in order to scale your chatbot into other business functions.”

Click here to download the complete report.

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VW Credit Invests in AutoGravity


HERNDON, Va. — VW Credit Inc. (VCI) today announced it is making an equity investment in automotive fintech firm AutoGravity, pending customary regulatory approvals. According to company officials, the strategic investment supports the captive’s goal to digitize the customer financing process.

The announcement means finance options from Volkswagen Credit are now available to the more than 400,000 consumers who have downloaded the AutoGravity car-shopping and financing mobile app. Additionally, the captive has launched the Volkswagen Credit smartphone app, powered by proprietary AutoGravity technology and available for iOS and Android.

“Customers are becoming more demanding of mobile technology and the world of auto financing is no exception,” said VW Credit President and CEO Horst Meima. “We are ready to become a leader in shaping this part of the industry and believe that AutoGravity can help get us there.”

Through investment and partnership, according to officials, VW Credit has positioned itself to realize the full potential of AutoGravity’s technology. Volkswagen dealers benefit from a new source of potential car buyers.

Based in Irvine, Calif., AutoGravity, which appeared on the cover of F&I and Showroom’s January 2017 issue, offers car buyers across the U.S. the ability to obtain up to four personalized financing offers on the vehicle of their choice. Designed with state-of-the-art security, AutoGravity protects consumers’ information with advanced bank-level encryption and proprietary data security technologies, ensuring sensitive information is processed securely.

“Mobile technology is a game changer for consumers, dealers and lenders. We have pioneered a digital experience that saves time and improves satisfaction for all parties through a device we are intimately familiar with — the smartphone.” said Andy Hinrichs, CEO at AutoGravity. “AutoGravity has experienced substantial growth since our first app hit the marketplace in the summer of 2016. This investment will help us accelerate in the face of rapidly growing consumer and industry demand.”

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CarMax Looks to Expand Digital Retailing Push


RICHMOND, Va. — Officials with CarMax Auto Finance, a subsidiary of CarMax Inc., said a focus on its online prequalification portal drove a 7% gain in first-quarter originations from a year ago.

The portal has been live at all CarMax locations for two full quarters. Officials said the next step is to offer customers home delivery, although they said the service will stop short of a complete online buying experience.

“Customers are engaging well with this offering and it continues to contribute to increased online leads, which we believe ultimately generate incremental sales,” said President and CEO Bill Nash during the company’s June 21 earnings call to discuss first-quarter performance. “Now we’re focused on improving the experience and proactively marketing our online financing capability nationwide.”

The auto finance company recorded $1.5 billion in first-quarter originations, up from $1.4 billion in the year-ago quarter. The firm did not disclose a total origination count or total outstanding balances.

According to officials, state regulations prevent the automotive retailer from allowing consumers to complete vehicle transactions online. The used-vehicle retailer will instead deliver vehicles to a customer’s home for test-drives. If the customer agrees to purchase after testing the vehicle, the associate accompanying the vehicle will be trained to help the consumer complete the deal paperwork.

Officials also said the pre-owned dealer group is testing an online appraisal tool in its Charlotte, N.C., market. It is designed to allow customers to submit condition reports on their trade-in online to receive an appraisal value. Nash said the company plans to expand that pilot to two more Charlotte stores.

“We continue our home delivery test and one key learning we found is that human intervention at the right time is important to giving our customers the personalized experience they expect,” Nash said. “Our goal with this test is to build the functionality needed to fully integrate our online and in-store experiences that we can offer as much or as little the car buying process online as each customer wants.”

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