Digital RetailingCommentary & Insights

Digital Retailing
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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.
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The Automotive Retail Shift

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The automotive industry on the retail side has been seeing some nice profitable shifts in recent months. Here we are in the hottest-selling part of the year and we are dealing with supply and demand issues. While it is a beautiful thing to watch dealers be profitable and command the market for a change I am worried about what will happen to our selling skills for the future. Right now anyone can be a superstar and gross $4,000 per unit just by showing a vehicle and going through a few steps to the sale. But what happens when supply levels come back to normal? How will we be able to maintain the same level of profitability while selling three times more units? I make it a point to look at inventory at some of the biggest dealerships in the nation to truly understand what our fellow partners are going through. I see Facebook groups that include retail automotive professionals from all walks of life posting pictures of empty lots and explaining how they cannot even put cars into showrooms since they are selling fast. These are scary times because dealers cannot afford to slow down. This is such an expense-driven business that we must continue to progress forward. I even saw a few posts where salespeople complained that their dealership is cutting pay plans because they are paying out way too much money for people that do not deserve it.  The big question is how do we move forward? We must remember that historically our industry has been resilient through the toughest times and came back better than ever. It will happen again very soon. We are in a business that forces “survival of the fittest” and things will normalize again. Now is the time to think about how we are going to sharpen our skills. Let’s get back to focusing on customer service. Let’s get back to focusing on building our sales and marketing skills. It is time that we take matters into our own hands and take control of our own personal development. Ralph Waldo Emerson once said, “The only person you are destined to become is the person you decide to be.” We must refuse to be stuck in continuing to do everything the way that we always have done it. The automotive retail shift has incorporated new ways for us to sell and acquire vehicles. Technology has given consumers the power to shop and be more knowledgeable than ever before about vehicles and the shopping process. It is time to train, self-develop, and improve how we handle our business. I recommend fifteen minutes of personal development daily every morning by reading a good book and watching some wonderful inspirational YouTube videos.  Additionally, we need to invest in training our people at dealerships. We need to empower our people to use our tools better. It is time to master the CRM and finally use it the right way. It is also time to create a process to use digital retailing tools to improve how we negotiate and talk to our customers. If customers will not start to embrace digital retailing the way that we as an industry planned then we need to once again take matters into our own hands and use these tools to improve our own salesmanship. Opportunities to improve are all around us. Let’s grow!
Beyond the Shopping Cart: The New Era of Going Digital

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The automotive retail industry is changing at the most significant pace in its hundred-year history. COVID-19 has accelerated retail trends in the automotive industry, so the 21st-century car buyer is no longer limited to dealerships but is now an "anywhere" buyer. Slow-to-adapt dealerships have been faced with the harsh reality that to succeed "”not merely exist"” they must move the buying experience from the showroom into the living room. An end-to-end digitally delivered experience, from first look to purchase, has been the only option for customers wary of public places. The next generation of automotive retail will be defined by convenient financial options, backend logistics, and rapid home delivery. Dealers must bring the showroom, F&I, and white-glove delivery to their customers regardless of physical location "” whether a showroom, a living room, a back yard, or a tent. Meanwhile, customer expectations for seamless remote purchasing experiences have been raised dramatically, thanks to the influence of Amazon, Apple, Facebook, and Netflix. A  McKinsey report  predicts millennials will represent the largest new-car-purchasing demographic by 2025, making it critical to address the preferences of these digital natives who expect smooth, "contactless" experiences. Breaking the Retail Mindset The old mindset was that "going digital" meant updating the dealership website with a catalog and a shopping cart. But going digital encompasses a lot more than online inventory. It means enabling a "buy anywhere" approach. It means adopting a flexible, process-focused mindset based on operational speed and dependability to address customer pain points. It means mastering the logistics of contactless product delivery, customer service, and remote sales. The key to successful remote sales is breaking this outdated retail mindset and moving to a modern approach based on operational speed and dependability. Once merely an online bookstore, look at how Amazon evolved to become a logistical juggernaut capable of delivering goods to any doorstep the next day with stunning dependability. What Your Customers Really Want A business exists to make its customers' lives better. If the customers' most significant pain points are around time, complexity and trust, every new feature or service rolled out should be designed to address those pain points. And the dealership needs to make that clear in its "brand promise," the experience customers should receive every time they interact with the dealer. The traditional brand promise is that the dealership is the biggest, cheapest, largest, friendliest, most award-winning, etc. But today, a brand promise must relate to solving the biggest pain points through speed, convenience, and transparency while being consistent across all customer touchpoints. These can include: Connected online visits so customers can continue their journey right where they left off Transparent and upfront pricing 100% online purchase with available home delivery or curbside pickup Online cash offers for trades Service pickup and delivery 7-day exchange program Lifetime engine/powertrain warranty Dealerships need the right technology foundation for becoming a customer-centric and digitally efficient dealership. They have to take advantage of emerging retail technology to grow their market share, increase F&I profitability and exceed customer expectations. The Silver Lining Because of COVID-19, the shopping experience that used to be a matter of convenience has become a matter of necessity. Dealers are now transforming their operations and connecting more effectively with buyers in any location. By focusing on proven digital strategies, dealerships can make a great leap forward in their ability to promote, sell, finance, and schedule delivery of cars remotely. They will not only survive in this new era, but thrive.
Mask-less Socialising: What This Means For Your Dealership

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There will come a time, sooner than we think at this point, where we'll be living in a post-COVID era. We'll be back at our favorite crowded bars, our kids will be in school — real school — and we'll be on the road: business trips, family vacations, and holidays.  But while we may be able to share the air with others again, the remnants of COVID will still linger. Predictions are that many retail habits- like curbside pickup- will be ingrained in our society forever. And considering the amount of new proud Peloton owners (seriously, check their stock), I'm assuming at-home and on-demand workouts won't be going anywhere either.  So what does this mean for your dealership? Just because we'll hit a post-COVID era does not mean dealerships should do away with some of the accelerated technology adoption and customer service accommodations derived from the pandemic. Quite the opposite: dealers should expect a shift in retail behavior forever.  Full funnel digital commerce  COVID introduced new emerging markets to automotive that helped the industry's fast economic rebound starting in 2020 Q3. Millennials, one-car families, New Yorkers. It was therefore imperative for dealers to have the technology in place to reach those buyers; efficient, hyper-targeted campaigns to attract new customers during a time of financial stress and uncertainty. The dealerships that were able to switch on and off messaging instantly, leverage streamlined data, and automate marketing campaigns were investing in full-funnel digital commerce that makes 1:1 matches between the shoppers and inventory. Reaching your customers with technology-driven marketing will stay relevant as buyers shift even more focus to online and pre showroom visits. Your dealership should have the infrastructure in place to target and engage all funnel shoppers, anywhere, including a top-notch browsing experience on your website, even if you see an uptick in showroom walk-ins.  Shortening in-person visits Even if there is no rampant pandemic, no one will want to spend their entire Saturday inside your dealership. This was true pre-pandemic and even more true post-pandemic. Dealerships that kept up excellent customer service during COVID were able to shorten the time in-store and do as much as possible before the customer visits. As the average in-market shopper only visits 1-2 dealerships, you need to make sure your dealership accommodates for the new normal that will never go back: less time indoors, less contamination, more efficiency, everywhere. Dealerships need to set up the closest thing to curbside pickup — or curbside test drive, if you will — to keep customers in-line with their new shopping habits. Less friction and more efficient appointment setting will be key. Facilitate the sale While facilitating the sale was always the number one priority for dealerships, consumers have a new level of expectations that we need to take into account. We've seen the world go upside down, and with that, business models adapt to continue to reach consumers in any circumstance. Curbside pickup, drive-though testing sites, cocktails on-the-go. Dealers should gear up to continue to provide virtual trade-in evaluations, solo test drives, service pick-up/drop-off at home, and more because shoppers now know this is an option and may very well prefer it. Consumers have become "spoiled" by the flexibility of the new normal and it's predicted this will dictate many new retail habits in the future. Make it easy for your shoppers and facilitate the sale to accommodate all funnel shoppers.  So yes. There will be a time where we'll all be back at our favorite pubs, hugging family members, and going into work. However, COVID has changed the face of business and customer service and dealers should prepare to stay competitive in this environment. It's about continuing the best practices that kept automotive strong in 2020 and beyond. 
What Will Automotive Retailing Look Like in 2030? A future perspective on the possible & probable scenarios

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Introduction Slight disclaimer, I am putting forward my thoughts and perspectives on the future of automotive retailing in 2030, not based on specific research, but rather on my years in the industry, the evolutions we have seen already, and the disruptive shifts of this global pandemic that all will carry forward. It is also not possible in a short paper to encompass all of the entire changes, but rather tries to highlight some significant transformations. More than anything, this perspective is based on the standing principle that the core business model of the way we buy and sell cars is not sustainable and survivable into the future. Something has to change dramatically. The industry will have to find new revenue sources, new offerings, and become part of a larger mobility ecosystem. So, what are some of the possible changes and shifts we will see in 2030 in Automotive Retailing? Overview One of the most significant shifts in the future of auto retailing will be the very concept itself. Retailing will not mean just physical selling. It will not mean a transaction at the brick and mortar dealer storefront. The very idea of "automotive retailing" will come to be known as a valuable customer interaction or engagement through any channel, any time and any way. The very differentiation of physical and digital will become blended.   Retail will be all "phygital"  (the intersection of digital and physical experiences), and merely an instance of experiences enabled through a customer journey. In addition, automotive retailing will not be centered around "selling" only, but be more inclusive of access and availability to experience products and services without a standard transaction of a new or used car as we know it today. It will include digital services, applications, brand attachment and engagement, and overall mobility platform access that is not about the sale of a physical product. The Future Perspective of Automotive Retail For the sake of trying to grasp a few major changes and shifts in 2030 for automotive retailing, I am going to twist the traditional sales cycle thinking into the "What," the "Where" and the "How" of what automotive retail consumers may literally not necessarily buy but "consume." The What To be clear, by the "what" I am referring to,  what  it is consumers will buy, or access, or consume. I firmly believe the idea of the industry being hinged to success or even survival as new car sales as the key success metric as a business model will not sustain. In 2030, and already underway, I see the "what" being  Access over Ownership.   Consumers of mobility will want and need access to commuting, transportation, or personal mobility. This mobility may be in the form of a new or used car in the traditional sense. Still, it may also be in some form of new transportation modes (including autonomous, ride sharing, high-speed systems, public city and urban mobility, mini-car fleets, electric bikes, and more).   The" what" will be a more personalized mode of mobility options and platform of access. The ability to access on-demand or leverage in short-term durations and have more choices that meet the consumer needs will be the key driver of benefit and success to this new model. The very "what" is the auto retailers and auto retailing will become about being a  customer mobility network platform , and not about vehicle inventory, transactions, and mechanical service. The Where This one is likely easier for all of us to imagine. The "where" is anywhere and everywhere. It is wherever the consumer of mobility and retail engagement wants it to be. It is digitally driven, and the majority of the process of engagement, if not all of it, will be accessible with a few swipes of a screen. But the "where" will also include the current dealer store and lot footprint. It will just be revamped to become more of a mobility access portal than just a blacktop of inventory (inventory station) and service bays in the back. The physical dealer in the future will contain other means of mobility accessibility, as described in the "what" above. The fleets of mobility access would include daily rentals and pay by the mile fleet availability, other forms of transportation such as autonomous and electric shuttles, e-bikes, and more. The "mobility center" (dealership) would also include electrification stations and the electrical shift from a car, or house, to powerplant and back as an exchange system and a means by which electric vehicle owners "make money" or transfer electricity as a value proposition. In addition, the "where" of assessing future mobility options will include urban centers, shopping malls, and various pop-up or shared brand locations. In these venues, people would be able to "test drive" or demo options of future mobility in virtual and augmented reality and gamification platforms. This digital gamification and VR/AR options would also be available online via tablets and mobile phones as applications. As for accessing the very mobility, this will include a much larger integrated footprint that is some cases, will include the OEM and dealer options and offers, but in other cases, be personal or city-owned options. These pick-ups, drop-off, and access centers could and will potentially include large parking lots, shopping malls, and other essential stadium and event venues, and in some cases, even smaller urban spots of convenience and high-volume easy access. The short of it for "where" is that where must mean anywhere and everywhere for the future of retail, as I have redefined it. Retail and access to retail options such as mobility access and digital services will be  "Phygital."  Retail will not be constrained to a physical location or a specific function, but be omni-channel, personalized value for meeting customers' mobility needs. The How I have eluded to the "how" in the what and where sections, but the "how" will be consumer-centric and consumer-driven. The how to access mobility could and will include various models such as standard finance or lease transaction and include subscription possibilities, membership or license models, daily and monthly passes, pay per mile and pay as you go options, and many more creative on-demand means. Just as the future of retail and the future of mobility will be a more dynamic and open platform, so to will the access and economic models have to be more personalized and inclusive of options. By many figures, the average household spends 10% or more of its net income on "subscriptions" currently. Those include streaming media services, gym memberships, cable and Internet access, and many other areas of our life. Why would our need for mobility not have such flexible, on-demand access? I know there have been some OEMs dabble in some form of a subscription model. Still, the retail level is where the consumer will be able to best physically and digitally interact with the available options and needs. I also don't want to blanket define "subscription" as just another fancy version of a lease. Whatever we may call it, the point is the "how" must be more dynamic, more flexible, more on-demand, and accessible anywhere and anytime. We have not witnessed much in terms of new financial terms or economic models in the industry since the creation of leasing in the late 1990s. Surely there can be more creative means to leverage the OEM and dealer assets in a value-add and additional revenue source while improving the actual customer experience and customer engagement options.   Summary All of the above is meant to merely lay out food for thought and the possible and, in many cases, probable new business models and customer expectation and needs that will be upon us in the next decade. As a dealer or retailer today, what do I do with this? Well, for me, it would strongly suggest and encourage that I have an eye on the future and start building my business model and capabilities to enable the new type of transformative experiences and offerings. While still grinding at the core business, I would start to accelerate opportunities and capabilities such as: Deeper customer connections (better data, better personalization, more interactions, more engagement, and more value-add offerings) A customer network platform approach Build technology, data, and integrated systems and workflows to treat the customer in context in their journey through multiple channels. Identify and begin to leverage new "what" and "how" capabilities New business offerings such as mobile service, mobile delivery, customer apps, rental and fleet possibilities, servicing for P2P or car sharing platforms, other mobility options like e-bikes. Leverage creative financial and access models for customers to the transportation such as daily rates, subscription models, low and flex mileage leases, pay as you go, and more. In all, start to redefine your own dealership as a mobility access center and not just an inventory lot. Start to measure success through customer engagement and experience. Create and measure new business offerings and services that expand your footprint in mobility with the customer and create new revenue opportunities. It is coming. We can be part of it as a bigger ecosystem or slug away at diminishing business models and relevance. I believe the disruption we see now will only continue and accelerate and revamp the "what," "where," and "how" of automotive retail.
A Time-Lapse of Automotive Retailing & the BDC as We Know It

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Remember the days when internet leads were coming in by fax just like the daily lunch specials from the local pizzeria still do? Those were the days that, sadly, I did not experience as I started selling cars just as CRM tools became popular. I remember the Internet Sales department consisting of salespeople that gave prices, created appointments and sold vehicles directly to the customer. This was without a BDC department.  I loved it so much that after two years on the showroom taking ups I switched to the Internet department.  We were considered the “giveaway artists” that made no gross or lost the store money. Management considered us important because we moved units and grew volume. Salespeople on the floor did not like us because in the dead of winter when it was freezing cold and customers were not coming in, we still had customers coming to see us. We were starting to provide the customer with the experience they wanted, and they enjoyed buying vehicles from us. I loved it because it kept me busy on the phone instead of sitting around, waiting for the door to open, and I made a six-figure income.  Enter the Era of Fancy Digital Marketing The internet had officially taken over with the likes of “SEO,” “SEM,” “Social Media,” and everything else that came along. If we add the fact that there was an unfair advantage to having two different types of sales departments, there became a need for the BDC. The mentality of hiring lower-cost customer service agents that had no clue about selling cars seemed like a great idea because all they need to do is “just get them in.” Many dealerships went back to handling phone calls the same way they did in the old days, without giving numbers. The problem is that no one would understand that consumers had every tool available to them thanks to sites like Edmunds, Cars.com, AutoTrader, CarsDirect, and many others. Now customers have to deal with two layers of people to talk to. First, they speak to a BDC agent, and when they visit the dealership, they get passed over to a salesperson. The experience of this created a longer sales process and constant complaints from customers because the process starts all over again. Even today, salespeople are not prepared to talk to customers because they have no clue about the digital tools that can help sell more efficiently. This problem still exists in the dealership today, even after digital retailing became the modern way of life.  Enter Digital Retailing While I remember seeing Digital Retailing tools on dealer’s website’s as long as ten years ago I do not remember seeing a single Sales, BDC or Manager even know how to navigate the website. The dealership website is the digital showroom and I think that only now we truly are starting to get it. While customers are constantly saying that they want to do a complete transaction online they still do not realize that they have this ability. In fact, we as sales professionals need to coach customers to use these tools. Instead of “when can you come in” we shift the conversation intelligently to pressing a few buttons and discussing pricing and payments.  It is important to train people to ask the right questions and work their digital retailing tools. Nowadays, when customers want to negotiate numbers discussed we can start asking for a commitment and getting management involved to structure the deal. Essentially, if we use the digital retailing tool properly we can bring customers in the showrooms with half the deal being already finished and lowering the time it takes to finish a deal. Digital retailing is a culture that is officially forced upon us by the consumer and the software creator. We need to embrace this new way of doing business.  It is sad to see many dealers still not embracing this shift in business. We talk about disruptors like Carvana and even Tesla often being upset about their growth. Yet we forget that this is all about the customer experience. A digital retailing culture is the best way to battle disruptors and give customers a positive buying experience. My suggestion to auto dealers is that they need to rethink how they are training their Sales and BDC teams to work leads and car deals. The future is here! Let’s embrace it!