Should Dealers Take Control of the Consumer-Driven Sales Process?

Dealers need strong, cooperative integrations to meet the evolving competitive demands of consumers

The auto industry is experiencing rapidly evolving consumer expectations in all facets of the sales process. The evolution of these expectations is compelling and creating great change.

As we all know, times of great change create winners and losers. Among the many products and services showcased at this year’s NADA Convention, this was the overriding theme that permeated the entire show at both the OEM and dealer levels. Today’s retail auto consumers expect ever-greater levels of transparency and control of their vehicle shopping and purchase experience—and the market is absolutely rushing to provide it.

There are a variety of third parties working to offer consumers what they want. Some of them are threatening to disintermediate dealers and OEMs from the customer relationships they have long enjoyed by exerting ever-increasing control with the promise of providing leads. Still other third parties focus efforts to help dealers and OEMs remain central to their customer relationships by providing tools that support their ability to manage the sales and financing process the way they wish.

Dealers have a choice, and there are arguments to be made in favor of either approach. After all, the aim of both is to drive more vehicle sales and profits. When third parties insert themselves into the customer relationship, however, it creates an additional layer that, ironically, creates another cost in the sales process because of an extra middleman step in the industry: These third parties need to get paid.

There is rapid experimentation going on in the industry. Examples include GM’s “Shop. Click. Drive,” Lincoln’s “Click-to-Purchase,” Scion’s “Pure Process Plus,” and AutoNation Express’s online initiative. Each of these creates value in a manner appropriate for the respective OEM and dealer body, and generates findings foundational to the evolution of the future vehicle shopping and purchase process. With this approach, dealers and OEMs are in control with their service providers playing a supporting role—not the other way around.

Dealer control over dealer data

A key to enabling these initiatives and allowing OEMs and dealers to manage these processes, as well as their in-store operations, is the seamless flow of data between their selected providers. This was another hot topic at this year’s convention.

There has always been tension in this area between dealerships—which believe they should be able to own their data and direct it to their selected providers as they see fit—and the providers that control data flow and often monetize it for strategic and competitive reasons, in addition to recovering the cost of secure data transmission. Although this is a perennial issue, it’s becoming particularly acute because some of the largest players in the industry are dramatically raising their prices for data integration.

This can create significant challenges for dealers and their selected technology partners, who rely on an efficient flow of dealership data to enable the process selected by the dealer. The process benefits offered by innovative players can be substantially muted if data integration is not available—or if it is available at a price that eliminates the economic benefit that could otherwise be provided.

As usual, there are providers working to help customers solve these problems, just as they have for years. The day before the opening of NADA, the Automotive News Retail Forum hosted a panel discussion, “Your Dealership’s Data: Who Owns It and How to Protect It.”

Although much time was spent on data security, the need for integration was another major area of focus. It was also suggested that industry players work together to make it easier (and less costly) for dealers to move data between the various systems they use. The bottom line: Dealers need strong, cooperative integrations in order to meet the evolving competitive demands of consumers.

Mobile-enabled everything

Another key theme is the manner in which almost everything is becoming mobile-enabled. Inventory management, sales processes, financing tools, service appointments, and delivery are providing continually more powerful and creative process support through ever-more robust mobile devices. This is creating a great deal of experimentation, and opportunities for dealers to spend (but, they hope, not waste) dollars to enable new processes in their dealerships and in the mobile world.

This dealer-process creativity is being matched—and surpassed, in some cases—by consumer-facing tools that are creating further experimentation and disruption for the dealer world. Consumers can be accessed in new ways—and they also expect access in new ways.

One of Sunday’s Specialty Workshops examined how technology has changed consumer behavior and the future of automotive retail. The workshop covered how online shoppers interact with dealerships, and how to leverage these digital interactions. Dealers’ strategies need to be flexible enough to embrace the evolving expectations of customers without abandoning the tried-and-true methods that have worked over the years. These new tools can add value in a complementary fashion.

With the industry continuing to evolve, the logical approach will be to embrace and engage in these industry and technology megatrends, because—ready or not—they will continue. After all, this year’s NADA Convention theme was “Connect.”

Justin Oesterle is chief information officer for RouteOne, a joint venture between Ally Financial, Ford Motor Credit Company, TD Auto Finance, and Toyota Financial Services. He is responsible for managing all information technology and systems development for RouteOne. Prior to his current position, he served as vice president of sales, marketing, and strategic alliances and vice president of operations and program management for RouteOne.

Justin Oesterle


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