A recent report found car dealers offering consumers the ability to do a deal online has grown to 40% in the last year—but an urgent need to cutdown on repetitive steps happening in the showroom.

Nearly all car dealers currently using digital retailing tools claim it has positively impacted their business, especially in customer experience and satisfaction, according to the 2023 Digitization of Car Buying Study from Cox Automotive.

“Digital retailing has made significant progress in penetration among dealers,’ said Tracy Noonan Fred, SVP of Dealer Solutions at Cox Automotive when the report was released. “Nearly 4-in-10 dealers [are] offering customers the ability to complete all of the steps of the deal online, up from 3-in-10 only a year ago.”

Post-Pandemic World

When it comes to capturing data from shoppers, buyers, and franchise dealers, Cox Automotive’s latest research underscores how commonplace it is and the improvements added to the overall buying and selling experience.

Compared to a year before, 2023 digital retailing has made a larger impact in four areas of dealers’ business: customer relationships, deal-making, staff implications and F&I. Since 2017, Cox Automotive has studied both dealer and buyer perceptions related to the digitization of car buying and the rise of automotive eCommerce, which accelerated due to the pandemic.

“Despite the recent economic ups and downs, dealers continue to remain highly satisfied with these digital investments because of their positive impact on both customer and staff experience,” said Noonan Fred.

Survey Results

Digital retailing continues to drive efficiency, as a tool for strengthening personal connections with buyers. The numbers backing this declaration include;

• 76% of dealers find digital retailing tools have improved customer relationships and have eased completing the deal;
• 61% of dealers have found these tools improve the F&I process, an area that has historically been a major pain point for shoppers.
• Shoppers are willing to provide access to information that enables an ideal buying experience as74% of shoppers are comfortable sharing personal data such as income and credit score, 52% their vehicle data, and 29% their online and social media data.

However, digital retailing faces challenges, namely in repetitive processes, which can undermine customer trust and increase the time it takes to complete a deal.

Repeat Frustrations

The survey found 97% of dealers said customers complete steps online and repeat them in-store. The most frequently repeated steps relate to trade-in offers, deal breakouts, finalizing the purchase price, selecting add-ons, and financing applications.

Behind this repetition is a trust gap; only 8% of dealers completely trust the information shoppers share with them online, and 70% say shoppers repeat steps to verify data is accurate.

“Now that buyers have a growing willingness to share their data with dealers online, knowing that it is driving a more personalized online experience, digital retailing is not just a tool for efficiency—it is a mainstream best practice that consumers expect from their shopping experience,” added Jessica Stafford, SVP of Consumer Solutions at Cox Automotive.

A hybrid digital approach in-store can mitigate the barriers shoppers find online, according to authors of the report.

Continuity is Key

Only 1-in-4 dealers acknowledge their digital solutions offer a congruent experience online and in-store. This lack of consistency instills a sense of doubt that can disrupt an otherwise satisfying purchase process, according to the authors of the study.

Additionally, the report found 91% of shoppers want the option to interact digitally at the dealership, and many dealers are embracing new tools to meet this desire. And 81% of dealers currently use or are interested in their salespeople using digital tools to connect and continue their shoppers’ process at the dealership.

Lori Wittman, President of Retail Solutions for Cox Automotive, noted the report shows it’s no longer enough to put widgets on a website when it comes to digital dealing.

“Dealers who continue to invest in digital and AI-powered tools that provide a user-friendly, secure environment where shoppers can share personal data and complete deals with tools that work both online and in-store, will continue to reap financial benefits that come with higher shopper and staff satisfaction,” stated Wittman.