Before March, dealerships were taking baby steps towards a true end-to-end online retail experience. COVID-19 upended that strategy. Suddenly the only way dealers could sell to consumers was online. The step-by-step move to digital was replaced by a headlong rush.
Many consumers wanted to do more than just shop for and select a vehicle online. They wanted the same thing they get from other retailers – a seamless end-to-end purchase experience. Solutions to provide that do exist, but there are still potholes in both the dealer and the consumer process.
“Consumers got used to being able to buy everything online,” Chad Collier, co-founder and CEO of CarSaver, the online platform adopted by retail giant Wal-Mart, says. “Cars are not going to be any different.”
CarSaver in 2015 began working with Wal-Mart to develop a platform that would make buying a car through Wal-Mart’s website easy. In their research, says Collier, “the Wal-Mart shopper wanted to do everything in one place. They wanted to do the entire transaction online.”
Launched in 2016, CarSaver by Walmart began its national rollout in 2019. Through the platform, consumers search inventory at thousands of certified dealerships and are able to buy any brand, make, or model (except a new Tesla); decide between buying or leasing; finance with a variety of banks; buy insurance; close the deal; and have the vehicle delivered or pick it up at the dealership.
There are still a few gaps, admits Collier. Not all states allow online signing of contracts, so-called “wet” signatures. There, the dealership has to obtain the actual signature. CarSaver also has not “perfected” the process for adding aftermarket accessories to a vehicle, he says. “A lot of accessories providers aren’t digitalized,” says Collier. “It’s also very complex given the number of combinations.”
Del Grande Dealer Group in the San Francisco Bay Area is close to offering an end-to-end online experience, says DGDG president Jeremy Beaver. Using a platform created by Prodigy, a San Francisco-based startup, DGDG’s customers can locate and price a new or used vehicle, get a Kelley Blue Book trade-in value, compare and customize payments on a loan or lease, and schedule in-store or at-home delivery. Customers can easily go into a dealership and transfer from online to offline at any point in the process.
Tablet computer software allows DGDG employees to continue the sale where the customer left off at home. Only three components are missing to make the process seamless, says Beaver: Adding accessories at the time of purchase; customizing pricing based on customer history and location; and allowing a customer to select a specific lender if they have a previous or needed relationship with that bank.
DGDG is still doing in-person financing, he says.
Two of those three functions are now available, Prodigy’s Director of Marketing Elliot Kohl says, including the ability to accessorize and customize pricing. Selecting a lender is “coming soon,” he adds.
Accessorizing and selecting the lender of choice are two elements that help personalize that online experience, and personalization is crucial, Cox Auto SVP of Consumer Solutions Jessica Stafford said during a recent webinar. Cox research found consumers are not just asking for but demanding a “personalized, on-demand, brought to me” type of experience because they “are used to getting everything they need that way now,” she said.
The used sector was a pioneer in offering a completely online retail experience.
Carvana early on recognized the value of online buying. Its vending machines even offered a touch-free delivery before that was a priority. Other used vehicles sellers have followed. For example, Shift allows consumers to browse inventory, arrange financing, take a virtual tour of the vehicle and buy at a no-haggle price with a seven-day or 200-mile return guarantee, all online.
Toronto-based PowerBand Solutions’ cloud-based DRIVRZ works with dealerships to sell their used vehicle inventory and is just a few steps away from offering a fully online experience, says Bruce Polkes, CEO of Intellacar, the i-Pad component of DRIVRZ. The goal “is to make (the purchase) seamless by empowering dealerships to do business in a way more comfortable to consumers,” he says.
After consumers decide on a vehicle on a dealership website or at the dealership, using DRIVRZ they provide information, get a trade-in value, add warranties or other add-ons, arrange financing, and sign.
“Its five simple steps to purchase a vehicle,” says Polkes.
Another function, DRIVRZ’s Driveaway app, allows consumers buy and sell used vehicles to dealerships through virtual auctions.
Customers are returning to dealerships for in-person browsing, says Cox Auto’s September 23 COVID-19: Tracking U.S. Consumer and Automotive Dealer Sentiment report. But consumers, having gotten a taste of online car buying, still want a seamless digital shopping experience. Buying a vehicle online is “a rare win-win opportunity for consumers and dealers,” says the report.
Most dealerships Cox surveyed said they would keep their digital retailing solutions, the number one reason being increased efficiency. They need to continue to evolve those solutions. The technology for an end-to-end experience may not be perfected, but consumers want it and dealerships need to offer it or risk losing those customers.
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The Presidio Group provides M&A advisory services through its wholly-owned investment bank, Presidio Merchant Partners LLC, Member FINRA and SIPC.