Debunking Common Misconceptions About Digital Retailing – Mo Zahabi, VinSolutions & Dealertrack

digital retailing

Digital retailing continues to be a topic on everyone’s mind in the auto retail industry. In fact, according to Cox Automotive, 61 percent of all car shoppers are reaching and buying vehicles online, and there are multiple projections that number will climb. To debunk some common misconceptions about digital retailing and how out how to capitalize on this trend, we recently caught up with Mo Zahabi, Senior Director of Product Consulting at VinSolutions and Dealertrack.

digital retailing

digital retailing




Jim Fitzpatrick: Hi everyone. Thanks so much for joining us on another edition of CBT News. We’re so happy to have with us today, Mr. Mo Zahabi, he’s the senior director of product consulting at VinSolutions and Dealertrack, welcome into the show, Mo.

Mo Zahabi: How you doing? Good to be on.

Jim Fitzpatrick: Good. So let’s talk a little bit about digital retailing. I know that you guys have your hand on the pulse of that, working with dealers across the country. And I think there are some dealers out there that are trying to get their hands around exactly what digital retailing is all about. From your perspective, kind of give us a view, a 30,000-foot view, and then we’ll kind of dive in a little bit, as to what digital retailing is.

Mo Zahabi: I mean to me, digital retail, you hear about buying online and all these different terms. I think that’s part of it. I think, to me, digital retail is more about connecting what happens on online, giving a customer the way to educate themselves on available programs, aftermarket programs.

Kind of doing this all on their own terms, but having an ability to take what the customer has done, and being able to connect it to the in-dealership experience once they crossed over that threshold to the physical plane. I think that’s really digital retail for me.

Jim Fitzpatrick: And what do you think are some of the reasons that dealers haven’t embraced digital retailing, and all that’s going on in that arena? Because we’ll still talk with dealers today here at CBT and they’ll say, “Ah, digital retailing, I’m not so sure.” People still want to come in and kick the tires, and do business at their local dealership. And drive the car, and interact with the salesperson, and have their questions answered in person and such.

But they’re just not getting on the digital train. And is that a concern, do you think, for those dealers? Do you think something’s gonna happen where the industry or their market passes them by?

Mo Zahabi: Yeah, I think there’s a couple of different things that are going on. I mean, there’s a fear of lost control with the dealers out there. And I mean, when I was first entered into retail, it was you know, sit them down, slow down, you’ve got to control everything that’s taking place.

The truth is, dealers, lose control of deals every day. It just happens. Customers, though, need to feel like they have control over their own process. It makes them happier. The deals work faster that way, and ultimately, I think that we’re more profitable, especially when we can make our customers happy.

So smart viewers, I think, could figure this out. They’re their most profitable customers in the dealership, they’re the happiest ones. They are the ones that refer people. I think that if they saw, or stopped to really look at with DR offers, digital retail offers the buying experience, they’d be much more willing to adapt to it.

The other part is, putting those deal structures as monthly payments out there online, I think again, that’s one of those areas where dealers are fearful that they’re giving too much. But I think it’s also a reason for customers to go out there and embrace it, because they’ve been looking for that.

And truth is, if we don’t give that to them, they’re gonna go out there and they’re going to find information, whether it’s right or wrong, and they’re going to believe it because you know, Google is always right, for example. So, there are fears, and I get it. The big part of that also is, everything changes once it gets in the dealership, anyway.

I mean, I’ve been out, and I’ve been working with a lot of different dealers lately. And a lot of the dealers right now, they use digital retail as a tool to, more or less, educate for customers and aggregate leads. Because once the customer shows up in the dealership, there are so many different types of technology on a vehicle right now, that the customers do change their minds. So they might come in on a specific vehicle, so odds are they will end up leaving with another car.

Jim Fitzpatrick: We’ve spoken to a dealer, or I spoke to a dealer recently that said, “I want to be able to provide our customers and our car shoppers with a full digital experience. So if they actually want to deliver a car to somebody’s front door, and do all the paperwork online, they can do that through our dealer group. But what we realize, is that every consumer is going to come in at a different request or a different level.

Some may want to do some of the items online, maybe a pre-application or maybe they get an idea of what their trade-in is worth, or maybe get some bottom-line numbers. But then they end up coming to the dealership for affirmation and confirmation on the deal and the car, and driving it and what have you. While others may want to just use us to shop online, and then do the paperwork in the dealership, including the credit app and things like that.”

But he felt as though he wanted his dealer group to be on the front line, so that they could offer a full digital experience to the consumer if they so wanted that. Have you found dealers to be that way?

Mo Zahabi: Yeah, but I think that dealers more so want flexibility. They want the capabilities to deliver that experience if the customer is that advanced. But not every customer is going to be there, kind of like you said. I mean, we want some flexibility where … I think nine out of ten truck customers right now want to do at least one part of it online.

Most of them are going to want to sign in the dealership, but each person’s going to have variance in what they are comfortable doing online, and how much of it they may choose to do online. So you have to offer technology that’s flexible, no matter who the user is, to make sure that for each customer. The elements to get where they need to be are there.

So I think the big thing though, for the dealers. Again, it’s really the continuity and being able to pick up where you left off, and rather than the old days of, “What brings to the dealership,” When a customer shows up, I go, “Hey, you’re here to look at this car, I’ve got it pulled out front.”

There’s no guessing. There’s no questions. We abbreviate that time in the dealership, I think it’s the ability, more so, to get to the really situation of yes for the customer, than it is about, again, the whole experience online. But the tools have to be in place, you have to give the dealer all of those tools. So, depending on what the customer’s willingness to complete them are, they have the opportunity.

Jim Fitzpatrick: What should dealers consider when choosing a digital retailing provider or solution company out there?

Mo Zahabi: For me, and this is kind of not just, obviously I work for Cox Automotive and I’m very familiar with our product sets, but I had about 12 years of retail experience as well. So from my standpoint, if I was buying software, the biggest disconnect in the industry right now is that online to in-store experience.

You know, the customer spends all this time out there doing all this research, and then again, they show up in the dealership and I asked silly questions like, “You here to look at a car?” Well, you’re at a dealership. Yes, you’re here to look at a car. I’d rather have that unique understanding.

So I think that’s a partner out there, that provides them with some visibility there. The other part is, again, culture is a big part of this. And it is a disruptor in the industry right now, making that shift.

So you really need to have a partner there, that helps train you on the expectations of the customer, especially as they continue to change, not just the product. Obviously that’s a big part of it. But teaching them how to streamline the process in the dealership by essentially providing them with a playbook.

So I think that’s another big component of it. The other one here would be connecting the ecosystems. And obviously at Cox Automotive we have an advantage, because we have a lot of different product sets. There’s a lot of different integration that connects these tools together, that eliminate things like, a duplicate entry may make it easier to consume data.

So I think that being able to connect across channels in an integrated ecosystem is a huge part of a dealer’s success. But again, it really goes down to the people that support the product. Cause if you don’t have people supporting the product, it’s just software. It’s not a solution at that point. And at Cox Automotive, we’re all about selling solutions. Solutions solve problems, products cost money. I’d rather solve the problem.

Jim Fitzpatrick: That’s right. You’ve been on the retail side, you mentioned, for 12 years. So you know both sides, from the vendors side and also from the retail side. What are some of the things that you think dealers can do today, in order to be successful with digital retailing now and in the future?

Mo Zahabi: Start making the change. I mean really starting to understand that this is something that’s going to happen. As we see other go about this, it’s just something that they’re going to have to adapt to. And some people will say that digital retail for example, it’s impersonal. You don’t have anybody there walking you through the steps. I think that’s a common misbelief right now.

I’ve never personally had to call Amazon and get somebody on the phone to continue my purchase, but I tend to have a nice bill at the end of the month from Amazon, because it’s convenient and they provide me with the things that I need.

So I think that viewers, to be successful in this, to look forward, they have to embrace it, they have to start training their personnel and developing their playbook. Obviously it’s nice to have the assistance of professionals within the industry to help you do that. But if you don’t start, you really can’t get where you want to be. And I think that’s the biggest component of it, is you have to get going with it, and you have to embrace it. It’s something that’s going to change, and if you don’t start, you’ll never finish.

Jim Fitzpatrick: Yeah, that’s for sure. If you were a dealer today or running a dealer group today, would you be pushing this in a big way, digital retailing among your staff and such?

Mo Zahabi: Wow, that’s hard to say. I mean, if I was running a dealership today, I’d really probably look at changing everything, and I was a little bit more forward-thinking. I love-love technology. It’s my background. I would be greeting customers on iPads, and introducing them to the process. Because, again, they’re not familiar with it. So as new customers come in, if I can say, “Hey, here’s our digital retail platform. We offer another way of doing business.” Let them walk themselves through it.

They have the ability to see things like inventory right there, rates on the vehicles that they qualify, the aftermarket, educating them there in the dealership, so that when it is time for them to do this again and they go out to the website, they’re more familiar with it. I think that if it’s done right, I mean you might see three-quarter, half, or maybe more of the vehicles from your dealership being purchased, which is great because that saves the dealership a lot of time.

And that’s the biggest proponent for me in the dealership, is cutting down the time it takes to buy a vehicle. That point of being able to get to yes. We know, right now, that the average customer spends about three hours in-dealership. That’s not accessible. They say 90 minutes.

What if I could get it to 90 minutes? Would I make more money? Probably. Would CSI be better? Absolutely. And CSI, I mean that really turns to retention, and those customers coming back and buying from you in the future. And if you want to be successful, you’ve got to retain your customers. Because retention means they’re there today. It does not mean they stay tomorrow.

Jim Fitzpatrick: That’s right. It sounds to me like the industry is now a technology play, right? You wind over the technology. You’ve got salespeople and managers that can work the technology to their advantage, and to the consumers’ advantage with regard to the experience, the customer experience. And you’ve won the deal and you’ve won that customer for a very long period of time. Right?

Mo Zahabi: Absolutely.

Jim Fitzpatrick: For sure. Well, Mo Zahabi, Senior Director of product consulting at VIN Solutions and Dealer Track. I want to thank you so much for joining us today on CBT news. We very much appreciate it.

Mo Zahabi: Thanks, Jim. Appreciate it.

CBT automotive network, the number one most-watched network in retail automotive. This has been a JBF Business Media production.