NADA 2019: Cox Automotive, Peter Batten

Peter Batten

Jim Fitzpatrick is joined by Peter Batten, General Manager of Digital Retail with Cox Automotive at this year’s NADA Show.The pair discussed digital retailing in 2019 and what trends you can expect to see stay.

Peter Batten

For more coverage from the 2019 NADA Show, visit us here.


Jim: We’re at the 2019 NADA convention in San Francisco. We may be with the man of the hour, Mr. Peter Batten. He is in charge. He’s the GM of digital retailing for Cox Automotive.

So glad you could take the time with us in this very busy event that we’ve got going on.

Peter Batten: Thank you. Thanks for having me.

Sure. Every dealer’s out there walking around almost like a zombie saying, “Digital retailing.” What does it mean? It is here to stay? Is it a fad? Are people really going to want to buy cars completely online and bypass the showroom? What’s the time frame and what do I need to do in order to retrofit my dealership to be prepared for that? I know I just threw a whole lot at you, but let’s start at the beginning.

Peter Batten: Those are good questions. That’s some really questions. From my perspective, the digital retailing kind of revolution that happens is really just letting a consumer be able to structure more of their deal online, that’s the start. We want shoppers to be able to do that but we also work with dealers and dealers are our customers. Dealers have to make money. That’s why we’re in business. I’ve got my 51% here. What we found is that contrary to what most dealers are worried about, which is it’s going to be a race to the bottom. If I show a payment, if I show an accurate deal structure, consumers are going to cross shop me and all of a sudden I’m going to be giving away my cars, right?

What we’ve found is actually that’s not true at all. The profitability of our digital retail deal leads is actually higher than other internet leads by 51%.
Which equals about $710.00 per deal.

Jim: Seven hundred and ten in today’s economy or I should say ecosystem is a lot of money.

Peter Batten: It’s a nice … I mean, dealers need it. Dealers need to have a profitable solution. Fundamentally the fear was if I enable consumers, I’m going to lose some of my business. What we’re finding is that’s not true at all. You’re enabling a consumer to have a good, quick, convenient experience and you’re making more money. Fundamentally what’s happening is a consumer is converting themselves to a payment buyer, which has always been the goal, when they get in the store I need to get them talking about payments, not a purchase price. That’s what happens is people are looking for convenience, they’re finding it in a payment online, and they’re coming into the store instead negotiating, like, “Hey, I saw it for 30 and I want it for 27,” they’re saying, “I saw it for 249 online, can I still get that?” The dealer with our tools can say, “Yes, you can get that.”

Jim: And they can live up to it.

Peter Batten: They can. Exactly.

Jim: There’s a disconnect if it comes in at 255 after they were told it’s 249 online, you got a customer that’s pretty unhappy, right?

It’s very important that you’ve got that platform and that tool to work with that where the payments are going to be accurate, right?

Peter Batten: That’s right. We include taxes and fees. It’s up to the dealer if they want to include that, but we can have the whole meal deal sitting there ready for the dealer so when the shopper shows up in the store, they don’t have to change anything, they don’t have to renegotiate anything. They don’t have to even add on products. Our tools show many products, protection products, sold by payment. So $7.00 a month, not $800.00, right?

It’s just a very convenient process and gets the shopper interested and learning about protection products before they get to the store.

Jim: Dealers that are out there, they’ve got tremendous anxiety over the loss of gross profit and somebody’s able to completely complete the transaction online, calm down, talk to you, and get the full story?


Jim: Because you’ve basically got the numbers to support a different story, right?

Peter Batten: That’s exactly right…
We see it across thousands of transactions. It’s working and it’s working well.

Jim: What percent right now, if you had to guess, how many transactions are done completely online now from new car franchise dealers?

Peter Batten: Virtually none completely online. When we talk about the full deal transaction, because we have digital contracting and the whole FNI workflow, that’s not there yet. People aren’t signing online I don’t think anywhere actually. But it’s something that’s in our roadmap, we’re enabling it. We just actually last week had the first remote signing ceremony that happened with our tools, and that’s where it’s starting. It video tapes it, it records it so that we’ve got that and it’s just a matter of verifying their identity, making sure that this person who is signing and is not in the store, they hold up their driver’s license, they really are this person.

Jim: Of course. We get questions at CBT news from dealers and managers that say, “How come Carvana can deliver online and advertise that?” You’ve got a young lady sitting on the couch, she’s watching a show, she’s buying a car, it shows where you can even sign online and low and behold a tractor, or a trailer rather, pulls up and drops her vehicle off. Is that gonna happen soon for new car franchise dealers?

Peter Batten: I think it’s up to the dealer if they want to do that. We want to enable it. I think it is still very complex. Getting verification of identity, a lot of lenders and states still require a wet signature. We want to be able to deliver but the important part to get started is you just don’t want that payment to change. That’s the fully structured deal. Whether you get the signature, whether you’ve had achance to actually validate that the trade is exactly as reported, you don’t want to sign contracts until you know that. There’s still a physical touch that happens in the store. We think the store is still very important to the overall shopping experience. But the idea is instead of spending three and half hours or four hours in the store, why don’t you spend 20 minutes? Why don’t you spend the time on the delivery, and the test drive, and the fun part of buying a car?

Jim: Well, Peter Batten, I want to thank you so much for joining us on CBT to answer some of the concerns that dealers have. If they want to learn more, they can go to Cox Automotive, get in touch Peter and his team, and he’ll help you navigate through all of this. Thank you so much.Peter Batten