Digital RetailingCommentary & Insights

Digital Retailing
Mobile Shopping is Impacting Online Parts Sales

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For millions of people, shopping online has become the preferred method, especially over the past two years since the start of the pandemic. However, just because things have begun to look more normal doesn’t mean people are giving up their shopping habits. The rise in online purchases across all retail industries has caused many retailers to pivot their strategy to a fully optimized buying experience. This pivot has not escaped the automotive industry as new franchised dealers turn to eCommerce to drive additional revenue. However, recent data also shows that if dealers want to maximize online efforts, they need to keep the mobile experience in mind.   Don’t Ignore The Data A recent report from  RevolutionParts  that looked at the shopping behavior of over 100 million online parts shoppers showed that nearly 59% of consumers shopped for parts through a mobile device, marking a nearly 5% increase in mobile shoppers from 2020. Mobile users spent an average of $168 in parts orders and made up a little over $204k in total revenue for dealers signed up with RevolutionParts in 2021.  Not only were more shoppers searching for parts through mobile, but they were also purchasing more often, with 1.2k transactions made through mobile compared to 1.1k transactions made through desktop.  Although in 2020, we saw more shoppers searching for parts using mobile. However, 2021 marked the first year more consumers completed their purchases through mobile devices. What Does This Mean For the Parts Department? The dealership’s online parts business needs to be mobile-friendly. This rise in mobile purchases means dealerships will have to include mobile shopping in their online parts strategy and understand their customer’s mobile shopping experience.  Building an online parts business where the mobile experience is lacking will cost the parts department sales. Ignoring the data in the report mentioned above could lead to losing half of the department’s potential online sales. To ensure customers have the best online shopping experience when shopping from their mobile device, you need to make sure that the mobile version of the parts web store meets specific criteria. Otherwise, when a customer lands on the parts website, they may not know how to navigate the site to find what they are looking for, or they may have difficulty inputting their information and checking out. A poorly made mobile version can also confuse mobile shoppers, especially if it is visually unappealing, the text is difficult to read, or links don’t work. When building an online parts business, there are certain qualities you want from the mobile version of the website:  -       Easy to navigate  -       Quick load time -       Text is easy to read -       Visually appealing on a small screen -       Links are easily clickable -       Forms are easy to fill out Ensuring an online parts store is mobile-friendly is a must. A mobile-friendly parts site with these qualities is more likely to increase parts sales and deliver higher customer satisfaction.  Mobile shopping isn’t the future of shopping; it’s already here and growing. If the parts department wants to build a successful online parts business and capture more sales, the data shows that implementing a mobile-friendly shopping experience is a must. Get the Full 2022 eCommerce Shopper Behavior Report The RevolutionParts  2022 eCommerce Shopper Behavior Report  gives parts sellers insight into the behavior online auto parts customers, devices they shop from, how much they are spending, and demographics. To view the full report, visit: https://www.revolutionparts.com/  
How Combining Agile Thinking and Acknowledging the Individualism of the Customer is Disrupting Auto Finance

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In the post-pandemic world, the, in some ways forced, adoption of digital has had resounding effects on the purchasing process. The pandemic created an increased sense of digital comfort amongst consumers. As consumers began to rely on digital platforms for everything from shopping for groceries, to meeting with friends, to job interviews, one of the more profound developments has been the upward surge in consumer driven research capabilities.  With access to information through digital applications more prevalent than before, the new, digitally comfortable customer, can educate themselves prior to making any form of direct engagement. This greatly impacts the playing field and changes some of the traditional metrics previously held as decisive factors when it comes to digital marketing. In preparation for his upcoming presentation at CXAUTO2022 , we met with Lewis Scott, the Director of Marketing: Digital and Field Performance, at Byrider. Along with sharing his story, Lewis gave his expert opinion on the current state of the industry, as well as what him and the team at Byrider are doing to solidify their presence (and the future of automotive) through vertical integration, redefining the customer and the full customer journey.  Growing up in Southeast Michigan, Lewis was destined to build a career in automotive. Having interned at Chrysler’s parts division, MOPAR, Lewis moved on to join Chrysler Financial once he had graduated from St Joseph’s College with a bachelor’s degree in Business Administration and Management. In 2012, Lewis and his family relocated to Indiana and, with the Byrider Headquarters situated in Carmel, it seemed like the perfect place to settle down and establish a root structure. Byrider’s in-house proprietary approval platform and in-house financing, has supported the establishment of 32 company stores and 114 franchise rooftops. Lewis has spent the last decade with the Company, moving up the ranks from an underwriter to where he is now, directing marketing for digital and field operations.  Prior to being promoted to Director, Lewis worked on the Franchising side as a Franchise Consultant, which, along with the exposure gained throughout his tenure in the industry, uniquely positioned him to understand the complex nature of consumer behavior within the automotive industry.  The Metamorphosis of the Customer The customer is educated: they want their answer online, virtually, remotely, digitally. Before they decide if they want to give you their business and buy a car from you, they want to understand if they can get approved. In the old days, circa pre-2016, customers would call your store, look at newspapers, look at automotive ads, come up on the lot, “kicking tires” so to speak, and right now, customers are comfortable with and require an experience that is digital and remote.  Our ability to build relationships and engage in experiences online has become the expectation. Customers want an experience, they want to know what you have, what you stand for; they want to know about the business. Customers now want to understand the journey upfront, what is the approval process like and before deciding on whether or not to commit, they want to understand both the pre- and post-sale experience.  Digitalists versus Traditionalists When we consider the sales methodology, I am a product of both.  My background is firmly established in the traditionalist model of sales however, it is my role to ensure that my team understands the importance of incorporating a digitalist perspective. At Byrider, this means equipping ourselves to recognize the potential embedded in a consumer through digital engagement.  A hybrid model means that, whilst we acknowledge that the traditionalist process still takes place, just later on down the line, digital is here, now. That is what we are seeing, a mixture of both approaches but a transition or shift in terms of the sequence of the engagement and process.  Although it will likely be two to five years before we see the full spectrum of digital adoption across the board, the facts remain, 85% of our engagement comes from digital, mobile specifically.  My role is really about the sales funnel, above the attributed lead or captured lead. Leads are no longer what is in our CRM, those consumers landing on the website, looking for information - by definition, that is a lead. How do we get that customer more engaged in a sales funnel? The answer comes down to overall brand engagement. We are able to engage customers through sharing knowledge of who we are and what we do.  Byrider has 32 company stores and 46 individual franchises that account for over 114 rooftops. We come from many cloths including traditional dealerships, some have been key employees from traditional or captive finance, some come from entrepreneurial backgrounds and there is success in this combination. However digital is forcing traditional to realize you can no longer come at this from a purely traditional route. Consumers want to know if they are pre-approved, can they get approved, whether they qualify for the vehicle, all before they come see you. That is a digital mindset and a digital scope. From the perspective of managing the anxiety that comes with a hybrid approach, training and development can ease the transition. Historically, we were able to deal with objections while a customer physically sat in our cubicle, we now find that we need to handle these objections from afar through telecommunication and digital channels. On the upside, those customers who are calling, are doing so because they have seen our vehicle online. Those submitting information to you, are showing deeper engagement from a consumer intent to purchase. In terms of managing the gap, Byrider has embraced web chat and by doing so, we work towards meeting the digital needs of our customers.  What we are focused on, is determining which communications with customers can be automated, what can we do to support the activities of our customers in order to make them comfortable to self-serve.  The ability to buy and get approval, the ability to finance, incorporating the reality of bad credit, new credit, no credit and facilitating real life scenarios such as job gaps, multiple jobs, non-traditional employment; these are all the things we can take into consideration. Through our in-house financing, we are the dealer, the underwriters, the service shop. All entities of our vertical integration are managed with the customer ownership experience in mind, and this is what makes Byrider different.  Our operations are uniquely set up to truly be there every step of the way and keep our customers on the road. Through these three pillars of vertical integration, sales, underwriting and service, we can support the customer at the most critical steps of their journey.  From start to end, Credit For Being You is an agile approach to an inclusive offering. The beauty of vertical integration is the agility that we can employ, we are able to consider the ability and willingness to pay which is not possible through a traditional model. We are able to consider our customers through a lens which is not afforded to them when it comes to an automated credit platform.  As Lewis and I neared the end of our conversation, we reflected on the sense of honor that came with working in a Company whose principle business operations meant that he could proactively play a role in people lives, knowing that the Team at Byrider are the reason that some families can get to work in the mornings. Themes of accessibility and the ability to approach the customer from an individualistic perspective, whilst driving business forward, is what happens when you apply agile thinking to a community driven industry.  We also got some crib notes on the “top secret ideas” that Lewis will be sharing at CXAUTO2022 . We highly recommend seeing him in person.  See more about Lewis here
Supply Chain Issues and Inventory Challenges For Franchised New Car Dealers

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The automotive industry has experienced a variety of challenges since the beginning of the pandemic, and with ongoing supply chain issues impacting inventory, OEMs and dealers are encountering new obstacles at every level.  New Vehicle Inventory Challenges The current supply chain issues are limiting the amount of new vehicle inventory produced and supplied to dealers. As every dealer knows, this leads to low availability of new vehicles, high prices on new and old vehicles, and a rise in older vehicles remaining on the road.  Issues in the supply chain are also leading to mass amounts of unfinished vehicles being produced and waiting on chips. To combat this, some manufacturers have decided to produce and sell, at a discount, “unfinished” vehicles, with the idea that dealers can install the missing chip components as they become available. Other manufacturers have opted to drop popular features to increase sellable inventory, including rear-climate control, automatic start-stop features, wireless charging, hands-free driving, and HD radios.  For example, according to  Automotive News , Ford will soon begin to ship and sell vehicles missing non-safety-related chips that can be installed at a later date. These missing chips control things like rear-seat heating and air conditioning and auto start-stop features.  With more used cars being sold and some new vehicles being sold “unfinished,” this will mean more, potential dealer-installed options. These missing parts will need to be installed as inventory is available, and older cars will need to be maintained to remain on the road.  The Rise in Used Vehicles Inventory issues are also having an impact on the vehicles currently on the road. Due to the rise in vehicle price and inventory challenges, consumers opt to keep their current vehicles longer or purchase used. This means more used cars are on the road than ever, with the average vehicle age nearing 13-years old. Over time, wear and tear on vehicles lead to more part replacements. They also don’t run as efficiently as newer vehicles and require more maintenance, such as more frequent oil changes. It is estimated that vehicles that are a decade old cost twice as much to repair and maintain yearly than a vehicle that is just five years old. These aging cars represent a great amount of  potential growth the fixed ops side of the dealership as more people will need parts and service as their vehicles age. Roadblocks in Parts Inventory Along with a disruption in new vehicle inventory, there is also a disruption in the supply of automotive parts (more specifically, materials). Dealers and repair shops are struggling to source some of the parts their customers need, resulting in vehicles taking weeks and sometimes months to repair.  The ability to communicate with customers is critical. Be honest with them and let them know if they can expect delay issues on specific parts. If a delay comes up unexpectedly, let the customer know what is happening.  If you are selling parts online, this communication may be easier. Dealers who are selling OEM parts online should be able to have the ability to display what parts they have in stock and which parts they do not. Controlling what inventory a customer can order online prevents customers from ordering an out-of-stock part, lowering order cancellation rates. Currently, many dealers are facing higher cancellation rates due to supply chain issues and inventory shortages. The ability to shop online and expand sourcing options can help alleviate the pressure of getting parts by increasing the odds of finding a part. While your dealership may not have a part in stock, there is a chance that another dealership in the nation may. The ability to go online and shop around for the part can determine how long a car is sitting in a dealership’s service lane.  The same is true for other dealers and repair shops sourcing parts. By creating an online parts business for the dealership, dealers and repair shops nationwide have the ability to source parts from your dealership. Looking Ahead With OEM Parts While not much can currently be done about continuing supply chain issues, OEMs and retailers should focus on providing service to the aging vehicles on the road now, by maintaining OEM replacement parts.  Dealers lack new inventory, and consumers may be hesitant to pay the rising prices; the one thing that remains consistent is the vehicles on the road continue to age. This places more importance on fixed ops and the ability to sell and source parts. To do this efficiently, dealers need to expand their reach by taking their parts business online. By creating an online parts business for your dealership, you become part of a national market with access to millions of more buyers and thousands of more parts sources.       
Parts eCommerce Fuels Revenue Growth in 2021

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Despite the intense economic challenges and supply issues that occurred during 2020 and 2021, dealers selling parts online with an effective eCommerce strategy continued to see an increase in parts sales. RevolutionParts measured the success of dealers selling through with their eCommerce platform to determine the top trends of digital retail in 2021. RevolutionParts found that the average dealership selling online with their eCommerce tools grew their revenue by 13.4% in 2021, making it their most profitable year yet.    New Car Dealers’ Selling on the RevolutionParts Platform  Online Parts & Accessories Sales Growth, (YoY) Dealer Revenue Continued to Grow Online Despite the challenges presented to dealers over the past two years, online parts sales continued to rise. On average, dealers selling through the RevolutionParts platform generated $38,972 a month, a 13.9% increase over 2020, and the average annual revenue per dealer reached over $600,000, adding massive revenue to their parts department.   This increase in sales comes with a new shift in the way consumers buy parts. Not only are they buying online, but year-over-year, more consumers are buying parts from their mobile devices.  In 2020, most people did their online shopping via desktop. However, in 2021 mobile shopping surpassed desktop purchases for the first time, with 49.3% of people using mobile to make their online purchases, which is an 8.4% increase from 2020. This points to the growing importance of targeting parts buyers on the move with a high-quality, responsive web store and a shopping experience that is also mobile-friendly.  This report shows how important it is for dealers who want to continue to grow their parts business and provide a modern customer experience to sell parts online. Parts buyers are shopping online in high numbers from their desktops and mobile phones. Having a successful parts business means meeting your customers where they are.    Get the Full 2021 eCommerce Year-In-Review Report  The  RevolutionParts 2021 Parts eCommerce Year in Review  provides a look into the performance and top eCommerce trends in 2021, including insights from how and when people are shopping for parts, to the top parts and accessories they are buying. To view the full report, visit:  https://www.revolutionparts.com/ebook/2021-parts-ecommerce-year-in-review/
digital transformation
Digital Transformation in the Automotive Industry

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76% of CEOs, in every industry, agree their business models will be unrecognizable in 5 years. Think your dealership is immune? Technology touches every part of our lives. From the Alexa alarm that wakes you up to the UberEats app that brings you lunch, technology has radically shifted the way we live our lives and conduct our businesses. Forrester Research surveyed the world’s top CEOs and found that more than three-quarters of CEOs across every industry expect their business model to change in the next five years. After a year of explosive growth for automotive e-commerce companies like Carvana and Vroom, it’s time for dealerships to make their move.  Age of the Giants Depending on where you or your dealership clients are located, it’s possible that you’ve already felt the presence of tech-first dealerships like CarMax, Carvana, and Vroom. These companies have entered the market nearly a decade ago and have seen their growth explode thanks to shifting consumer attitudes about online car buying, especially over the last year.  Digital dealerships have seen large success because they make it easy and transparent for shoppers to get the information they need to make a confident purchase decision online. Fortunately, it doesn’t take millions in raised capital or shareholder money to create the type of online shopping experience that converts. Instead, it takes a digital transformation. The Tech Takeover Technology has been traditionally considered its own industry, but Forrester analyst, Jay McBain, predicts that soon the “tech industry” will disappear as it becomes ingrained in overall business strategy. McBain had this to say on a recent episode of The Ultimate Guide to Partnering podcast,  “…you used to compete against the person across the street and in your industry, and do things 10% better. Well, there’s a set of startups somewhere in the world right now that are thinking about ending your industry. So, every company has had to become a technology company. And every day, you’re reading about car companies having to look more like Tesla, you’re reading about almost every industry, you’ve got these big changes underway. So this technology is no longer a part of a company. In many cases, it’s becoming the entire business model…” Some of the most notable companies are already leading the charge in this change. Tesla is a technology company at its core and just happens to produce automobiles. Uber is not a taxi service, but rather a tech company that allows consumers to leverage technology to solve transportation problems. As consumers insist on more personalized and on-demand service, dealerships will profit from reinvigorating their business models with the new IT strategy. Your New Most Valuable Real Estate A lot of dealership owners think that their physical car lot is their most valuable piece of real estate. Dealers put a lot of attention into their dealership’s physical location and designing their showroom experience with special thought and planning, but neglect their mobile digital customer experience.  But consider this: how many customers visit your dealership showroom every day? Now consider how many people visit your website on a mobile device every day. The first experience a consumer has with your dealership before they walk into your showroom is your website. Consumers are doing so much more research on their own, likely on a mobile device, going through the selection process and eliminating dealerships to visit. As a result, they are visiting fewer dealerships. Does your website give consumers the experience you would expect as a car shopper?  Digital transformation is not just a new digital retailing tool or a video and 360° walkaround tool. Instead, it’s an overall adoption of digital technology by a dealership to enhance the car shopping experience while improving business processes and profitability. Leading the Digital Transformation Has your dealership business model changed in the last 5 years? What changes are you planning to make in the next 5 years? Dealers can only be successful if vendors invest in partnerships, integrations, and guide dealers through mobile digital transformation. Software companies, software integrators, service providers, marketing agencies, trainers, and consultants have a massive opportunity to help dealers meet customers online by partnering and connecting the right tech solutions together.
digital disruption
A Guide to Getting More From Your Digital Retailing Tools

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When I joined the automotive industry, the Chevrolet Celebrity was the top-selling car in the U.S. A lot has changed in the intervening 35 years. Just as models are tweaked to address changing taste in design, so too do dealers need to address changing preferences for how customers buy and sell cars. I’ve been in many conversations with dealers about providing customer-centric environments. But setting an appointment and hoping a customer is willing to spend four hours on the showroom floor to close a deal no longer qualifies as customer centric. The standards for efficiency in customer acquisition are changing as consumers move beyond the traditional purchasing experience. Dealers who seamlessly integrate their customers’ online shopping experience with the in-store one can improve deal throughput and profitability. The capabilities are probably available in your existing digital retailing platform — you just need to take advantage of them. As a father, I watch how my kids interact with online tools to satisfy their needs — all in the moment, starting and stopping and picking up again at their convenience. A McKinsey report suggests that by 2025, millennials will represent as much as 45% of the new-car purchasing demographic. Smart dealers are already integrating their services to cater to the taste of these digital natives for a contactless experience, which will only grow as more consumers enter the market with no recollection of the slower, in-person ways.  It’s time to rethink the customer experience to address the changing attitudes of a new generation of shoppers, where dealers will be challenged to get consumers to the showroom. You can do this by: Taking advantage of digital tools to improve both marketing and operational efficiencies Ensuring seamless transitions from online to in-store experiences Facing forward Many dealers tap only limited functions of their digital retailing platform. They view the tools through a marketing lens, to send emails to attract the customer to the dealership, without thinking of how the technology can improve their operational processes already in place.  It’s easy to become so mired in your usual checklists that you overlook opportunities to improve efficiencies. Efficiency isn’t only about putting a trade or purchase value on the car, getting signatures, and determining the “we owe” to the customer. It’s more than simply revising an in-store process. If you only view your digital retailing platform as an extension of your marketing department, you’re not leveraging its capabilities. The platform integrates physical dealerships with the virtual world, allowing your customers to shop for cars on your website just as they’d shop for products on Amazon. After finding a vehicle on your website, potential buyers build their customized offer and explore credit position and financing options — all from their laptops or smartphones, whenever and wherever they desire. Robust platforms are able to track what the customer has done prior to coming to the showroom. This preliminary research will save time once they’re in the dealership. They’ll have a more informed idea of what they want and arrive more inclined to buy. It becomes a streamlined experience for the customer and results in improved throughput for the dealer. But this only happens if the transition from online to in-store is seamless, with the customer able to pick up the buying trail in-person where it left off online, rather than re-starting in the store from scratch. There are three key questions to ask about your digital retailing capabilities: Does your marketing messaging match the in-store experience you intend to give your customers? Is your team able to execute on your marketing promise to deliver a seamless online to in-store experience? Where do your inefficiencies lie and where can you become more efficient? It might sound trite, but words matter. Your messaging defines the customer experience, which itself is defined by the dealer's execution. If your website promises an expedited, always-on purchasing experience, you need to deliver that. And just as you maximize the efficiencies of your technicians on a day-to-day basis, so too should you maximize your digital retailing process. Ready for a change What’s at stake here is retailer throughput and ultimate profitability. Empowered, trained sales departments leveraging the capabilities of robust digital platforms can move more customers effortlessly through the buying funnel, with less manpower, adding to gross profit. If changing your process allows you to serve even three additional customers every busy Saturday through the course of a year, it can make a dramatic difference to your bottom line. And you can do that simply by using the features that are already available in your digital retailing platform. While not every dealer is seeking to offer a fully digital one-touch experience, every dealer should be seeking to maximize operational efficiencies.  Moreover, a robust digital retail platform can be used to solicit inventory in addition to outbound sales. Dealerships hungry to supplement stock in today’s tight market can reach out to customers to gauge interest in selling or trading in vehicles. The ability to get an accurate trade valuation without having to visit the physical dealership, and in a way that is transparent and easy to understand, might turn a disinterested customer into an enthusiastic buyer.  As inventory levels return to normal later in the year, customer throughput and wait time as vehicles arrive will become more challenging. It’s up to the dealer to turn that challenge into an opportunity. So now is the time that you should be analyzing your procedures to see if you're able to deliver the most efficient experience from online to in-store. However you adjust your operational processes, your customers will benefit as well as your bottom line.