Covid-19 hit like a shock wave in March 2020, shutting down dealerships, impelling them to adopt digital retailing (DR) as a low-touch transaction alternative to the legacy, showroom-based car buying experience. Digital path-to-purchase experiences, including remote contracting and delivery, were largely adopted by a retail automotive industry in crisis.   

Today, it is clear, the pandemic has accelerated the evolution of digital retailing beyond the wildest dreams that its evangelists and promoters were nurturing just over a year ago (and yes, I was/am one of them).  In fact, most dealers are continuing to pay forward what was the key to their pandemic survival into a post-pandemic world:  DR.  

All of this, and more, was revealed in a dealership survey released by eLEND Solutions last quarter.  

Much of what that survey uncovered comes as no surprise – 80% of auto dealers said the pandemic accelerated their adoption of digital path-to-purchase experiences, 90% expect to continue, or accelerate, digital retailing and 73% saw the pandemic-driven acceleration as both blessing and curse.   

Those are the obvious headlines, but the survey also revealed other data about endemic perception shifts about DR that indicates that the move to DR shift is not a temporary fix, but a lasting, and critical, solution to much of what has long ailed the traditional dealership sales process. 

Lead Gen to Deal Gen

Reality check: The pandemic may have finally helped auto dealers kick their addiction to lead generation – which, let’s face it, was how most dealers really thought of digital retailing pre-pandemic.  Auto dealer lead gen addiction is a heavy, and increasingly unhealthy, hangover from our industry’s last major technology revolution – the one that began the first day a customer lead form was delivered to an auto dealer through the ‘world wide web.’  

One of digital retailing’s big challenges has been shifting auto dealers’ presumption that DR is, and should behave as, mere enhanced lead generation.  Historically, our industry has been cautious-to-slow in adopting emerging technologies (understandably, as many shiny objects have had their day in the sun over the last 20 years.) 

So, without the catalyst of the pandemic, getting to 53% of dealers understanding digital retailing as ‘deal’ versus ‘lead’ generation – i.e. ‘the start of the deal’ – could have taken up to five years. But here we are, with dealer acceptance of digital retailing moving rapidly forward. In fact, I would guess that that number has probably advanced – and continues to – since we fielded our survey at the end of last year.  

Figure 1: Lead Gen to Deal Gen

Digital Path to Purchase Advances

And, that perception shift has advanced the digital path to purchase ‘desired end point’ – another critical step to end-to-end DR: the preferred relative finish of the digital path to purchase experiences now extends much farther down funnel than just the first pencil. A mere 14% of dealers see the DR ‘relative finish’ as the first pencil, with nearly one third viewing it as getting to a qualified deal structure – including trade, down payment, etc. 

Figure 2: Digital Path to Purchase Advances

More Transactional Websites

This has all led to a sea change in dealership website functionality to support the shift to digital retailing. 90% of dealerships report that their websites are more transactional today than they were pre-pandemic. The industry’s rapid adoption of digital path-to-purchase experiences – to meet consumers preference for lower-touch transactions is an indisputable silver lining of COVID-19’s impact on business.  

Good Results Advance DR

But, if these advances had had a negative impact on dealership results, it is unlikely that that perception shift would have advanced. The key metrics of PVR and efficiency were definitely positive and myth busting: 64% of auto dealers reported reduced transaction times vs pre-COVID averages and 87% reported that the PVR (front and back) of digital retail-initiated transactions was the same or higher compared to pre-COVID averages.    

Figure 3: What Are the Results of Pandemic-Driven DR Adoption?

Pandemic or not – consumers now expect a more convenient, technology-enabled car buying process (digital retailing) – and that emerging demand is creating a new ‘selling’ reality for dealers, advancing digital path to purchase experiences and positively impacting the bottom line. 

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