Last week we wrote about Selling in the age of COVID and how this changes the traditional Road to the Sale. The article had some legs and was picked up by the CBT Automotive Network. The article was born from us asking some simple questions about how we can use technology to innovate and overcome many of the limitations that COVID placed upon us. Our first article focused on low tech options for selling to customers during COVID.
Our second article covers digital retail (DR for short) because it is such a hot topic and is being considered by many dealerships. Some of us already use it, while others are trying to figure out whether they need it, and how to differentiate one digital retail solution from another.
We are covering DR in two articles so that we can stick to our goal of providing articles that can be read in 5 minutes or less. Today we will provide a checklist for selecting a DR platform, while next week’s article will address the planning and process changes you should consider after you make that selection.
So What Is Digital Retail?
DR, in the purest form, is a soup to nuts retailing solution that allows car shoppers to self direct their car buying process online, or at least up to the paperwork and vehicle delivery. Almost every dealership website has the capacity to let customers select vehicles, appraise their trade-in, calculate payments and even apply for financing online. Today’s digital retailing solutions have well-developed designs to walk an online shopper through the entire buying process in a simple sequence ending with the completion of e-docs.
For dealers, it is the act of selling a vehicle online with or without direct human intervention. Soon, we expect that every doc can be signed without a wet signature. Imagine how great it would be to come in on a workday and see that 10 people had sold themselves a vehicle overnight. This is music to any dealer’s ears!
Do I Need Digital Retail And, If So, What do I Need?
Whether you need DR depends on your dealership’s growth plan. If you see COVID as creating a new normal where DR will be more common, then DR might be a good choice for you. If you are still suffering from limits on how many people you can have in your showroom, then DR might be for you. If you think that the world is changing and you want to capture the different ways people shop, then, again, digital retail might be for you. You get the point…
If you decide you need DR, you have many choices in solutions. Before you buy, grab a drink and go through the next section asking which questions are relevant to you and then rank them accordingly. Not all DR solutions are the same, so you need to first know what’s important to you before you start looking.
The Digital Retail Checklist
The list below is not meant to be exhaustive but should supply you with a large enough checklist to meet most dealership’s needs. Take the list, order it so that your most important items are at the top, and then get your pen and evaluate each contender.
- Is it easy to use for both your customers and your staff? This is a no brainer that gets missed too many times when dealers buy a new app. You don’t want a DR solution that is hard for shoppers to use, or requires a lot of training for your staff. If you can’t figure it out quickly – as the customer or dealer – you probably shouldn’t buy it. And, just as importantly, if the mobile experience is bad, drop it. With the vast majority of shoppers on mobile devices, a bad mobile experience will kill you. You definitely need a solution that your team members trust so they can convey that trust to shoppers.
- Will the tool accommodate the credit-challenged customers? Not everyone can buy exactly what they want. Is the tool complimentary to your website? Do you have a specific section of your lot (and your website) for shoppers who have these special challenges? Think about it, and make sure the tool meets your needs.
- Can I save money by removing other third-party tools? As you know, there are a ton of third-party tools on the market. A good DR solution will help you eliminate some of those tools from your budget. For example, does the DR solution you’re looking at provide easy access to trade-in evaluations and financing? If so, and you have these third-party tools on your website, you might see a way to save money making the DR tool more affordable.
- Does trade valuation make an offer to buy a vehicle? Continuing with the talk about trade-ins, some DR platforms include a built-in car-buying solution, not just trade-valuation. This is great for keeping the shopper in your DR sales funnel and moving them toward the sale without interruptions. With used inventory in short supply at present, you’ll benefit from having a way to acquire more used vehicles to sell.
- How easily does the platform integrate with third-party tools? This is huge. You want a platform that can easily integrate with any CRM, website, etc. And you want to ensure that you can do this economically. How much will the vendor charge (on a monthly basis) to connect to other tools? Consider negotiating this issue upfront to save yourself hassle later.
- Does the DR platform have an integrated F & I menu system? This one is pretty obvious, but not all solutions have it covered. If the DR platform lacks an F & I menu system, then you might want to rethink the solution. Menus are essential for keeping you compliant with the law and out of trouble.
- Do the calls-to-action (CTAs) stand out to capture the attention of buyers and does the DR process start with one click from the VDP? This two-pronged question is necessary for ease-of-use and conforms to user experience best practices. The ideal solution should supply eye-catching CTAs and start with one tap of a finger or click of a mouse. We study the verbiage on CTAs and can guide you there if needed.
- Does the DR platform’s internal reporting give you insights into the whole buying process so you can identify opportunities and fix breakdowns? You’ll want to analyze drop-off points in the DR process and the right reporting allows you to identify what’s working and what’s not for the buyer. Such knowledge will allow you to adjust accordingly and improve your online selling performance over time.
- How quickly does the tool perform for shoppers? Can the user quickly move between screens, or are they stuck waiting at different times. Slow speeds kill sales. Avoid any DR solutions that chug and slug their way through the buying process.
- Does the DR solution have the ability to submit a credit app to a lender? If we go by the rule that you are more likely to lose a sale if the buying process is interrupted, then having the ability to submit a credit app to a lender is absolutely critical. Keeping the shopper engaged and satisfied at every step in the sales funnel leads to more sales.
- If the DR solution does handle credit apps, then does it have a large base of lenders available, or not? This is a nuanced question. While it is good that a DR platform can process credit applications, it is far better that it work with the lenders you already use (with options for more if you need them). Otherwise, you risk a breakdown in the sales process if the shopper can’t find a lender that meets their needs.
- If your lenders are not on the platform, is it difficult for the DR solution to add them (at no charge)? Hidden fees suck, right?
- Does the DR platform do e-contracting? Again, we believe that a solution that doesn’t have any breaks in the sales process as the best option for most dealers. Consequently, having a solution that handles e-contracting is important.
- Can the DR solution handle new and used cars? Some solutions are only designed for new cars and can’t handle the variations imposed by used cars. We believe that the best solutions should handle both with the necessary idiosyncratic differences based on things such as new vs used car interest rates, etc.
- Is the DR platform really just a lead gen tool? Let’s be clear. If the DR solution you’re reviewing can’t process a sale from start to “relative” finish (including trade evaluation, trade buy, F & I menu, lender selection, etc.), it is not really a digital retail solution. It is just a lead gen tool with a few extra bells and whistles. This is ok if you are simply looking for a “super lead”, but if your intent is to actually sell, this will disappoint you and the buyer. But there is nuance here… some dealers are comfortable not getting a deposit and just giving the impression that the customer is buying. If you are one of those dealers and it works for you, then run with it. We’re not fanatics.
- Does the DR solution work with your OEM? Before you waste time reviewing options, find out if the DR solution works with your OEM. You know what to do.
- Does the DR solution allow for interaction during the sales process? Some solutions have integrated messaging or chat capacity and this allows for gentle guidance or hand-holding. Don’t worry about having to assist shoppers in the buying process. It’s still considered a digital retail deal even if you help them. Who cares anyway, let’s just find efficient solutions that help customers find and buy the car they want.
- Is the tool compliant beyond F & I? We could write articles on this topic alone. Does the solution allow for adaptation for your processes and documents – e.g., the Home Solicitation Sales Act, the Buyer’s Order, Retail Installment Sales Contract (RISC), taxes, Lease Agreements, etc.? Please go slowly and cover the bases to avoid future pain and suffering. As you know, this is VERY important!
Make a Plan or You’ll Waste Money
Suffice it to say, you will need a plan to implement DR within your dealership or group. You will need to answer questions such as how DR changes your sales process, who on your staff will hand DR sales, what standards will you require for DR success, etc. This is no small task and will require its own checklist that we’ll cover in the third article of our series.
Why Should I Care with the States Opening Back Up
Today’s crisis has precipitated a new normal for our community that was heading our way anyhow. Let’s be honest. Car buying is not what it was when we were spring chickens. A website like Carvana would have given us a good chuckle back in the day, but they did really well in the first quarter, dipped a bit in March, but picked back up in May. Now they’re committing to expand to 100 additional markets. With Amazon considering a similar sales model, are you still willing to risk just putting off purchasing a digital retail solution for the future, or will you adapt now? We know what happened to the dinosaurs when they didn’t adapt…
Let Us Know What You Think!
Our goal today was to give you a detailed checklist you can use to evaluate a DR solution. We hope we met that goal for you.
As we said in our first article, we Americans are strongest when we work together. That’s the purpose of these articles. We want all dealers to survive these tough times.
Our next article will address how you should plan for integrating digital retail into your business. If you have already made that adjustment, please share your experience with us either here or via a private message on LinkedIn.
Thank you and all the success with your sales this June!
Jointly authored by: