Digitize Your Dealership Operations Now to Be Ready for 2020—and Beyond

Have you made the commitment to grow your dealership’s ability to connect with consumers digitally?


Dealership operations can often be a big ship with a small rudder. With all this movement in the technology revolution, what does it take to change course?

The answer depends upon the lens through which you view technology, change, and what is happening in the industry.

When implementing technology, or deciding whether to so, do you see such decisions as ornamental or systemic?

The answer is revealed, in part, by how much you budgeted this coming year to grow your dealership’s ability to connect with consumers digitally. If you made no change, you’re not unique.

A new study from Ernst & Young (EY) reveals that only 20% of dealers plan to invest in their digital presence through 2020. That’s not prudent, the research firm suggests, if dealers want to remain viable connection points for consumers.

“Dealers need to redesign their value proposition adapting digitalization to provide an engaging interaction and compelling experience across all touch points,” notes EY’s new report, “Automotive Retail 2030: Evolution of dealerships and potential new roles in retail.”

Consumers continue to perceive and engage dealerships as their primary way to buy a car, the EY study notes. Does this information mean the calls to digital retailing have fallen—and are falling on—deaf dealer ears?

The industry is nearing a jumping-off point as dealers are feeling the effects of the following trends and their influence on dealership practices:

  • Cars as a service (CaaS) model
  • Rideshare and ride-hailing
  • Autonomous vehicles
  • Electric vehicles
  • Worker robots
  • Used car sourcing
  • Vehicle affordability
  • Finance interest rates

Digital technologies can help a dealer engage these forces that are reshaping the industry. Digital does this by eliminating the obstacles, redundancy, delays, and errors that can encumber traditional practices.

For instance, by having a digital subscription model platform in place, dealers will be able to streamline, manage, control, and ensure customer satisfaction from this new profit center.

Modernizing F&I to enable online consumers in obtaining financing information, evaluating trades, and learning about extended warranties and other aftermarket products will help make the dealership more profitable, as well as a more accessible and comfortable choice for customers to buy a car.

We know dealers are embracing digital technologies of all sorts to help them serve customers better. The herd of technology vendors at the annual NADA exhibition would have been culled out by now if dealers weren’t buying their wares, one would think. We know this is not the case.

Dealer adoption of digital F&I menu systems is a good example. As we’ve reported before, dealers using a digital F&I menu versus no menu to present F&I products realize a:

  • 58% increase in profitability;
  • 50% increase in service contract penetration;
  • 35% increase in GAP penetration; and
  • 60% increase in other products.

These performance gains result in a $537.50 average increase in PVR—$500 per new car and $575 per used car—for a $967,500 F&I profit per year on an annual volume of 1,800 cars.

The need for dealer expansion in all channels that reach potential customers is high. Ernst & Young notes the progress OEMs, captives, and brokers are making to reach customers throughout this sales funnel.

This emphasizes, based on separate studies about online sales done by EY, that these entities are improving how they reach and engage customers along their sales funnel by providing:

  • Product information, including digitized brochures, videos, and product specs using downloads, chat, and texts;
  • Product engagement, using online interactive tools, videos, and virtual reality experiences; and
  • Purchase engagement, by making available online vehicle reservation tools and accessible virtual documentation, e-signature, and delivery options.

Up-funnel engagement practices as described by EY cannot be understated. Use these channels to educate consumers about not only vehicles and services, but about the various F&I products you sell.

The data shows a significant percentage of consumers in your F&I office will not understand the value or benefit to them from purchasing the service contracts, maintenance plans, and similar budget-protection products you sell.

In past articles, we’ve often discussed how when customers don’t understand these products or their value, they decline to purchase them. A little bit of product value-based product education with customers can help counter this, whether you educate them online and up funnel, or in your office.

Finally, F&I continues to be a source of complaints from buyers, who grumble the process takes too long. Digital is the solution.

Using F&I interactive videos, virtual reality tools, and self-administered surveys that reveal consumer interests about the risks and rewards aftermarket products address helps to increase product sales. At the same time, digital lending, contracting, rating, and remitting speeds up transaction times to get the customer to delivery more quickly.

Tools make the transaction experience easier and the relationship between F&I manager and customer more productive for everyone.


In the future consumers will increasingly move to complete retail product transactions virtually. The current usage rates may not be that convincing—through 2017, online insurance product sales accounted for 4% of all sales. But watch out: The segment is expected to blossom, growing by 300% by 2020.

The evidence is sound, and the case studies are aligning around the same message. Perhaps the 80% of dealers interviewed for the EY study who did not plan digital presence investment are now awake, realizing 2020 is barely more than 12 months away.

If you plan today, 2020 could be the year you look back and see the benefits of a digitized dealership—or look back in hindsight and wish you had embraced the change more seriously. The choice is yours.

Jim Maxim, Jr. is president of MaximTrak, a RouteOne company, and chief digital officer for RouteOne, a provider of digital F&I platforms for dealers. He is an F&I visionary recognized by CIO Review magazine, a frequent panelist and speaker at various F&I conferences and summits, and a contributor to automotive retail media about evolving F&I technologies. Reach him at maxim@maximtrak.com.

Jim Maxim, Jr.

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