The auto industry has been laser-focused on digitizing the retail shopping experience for several years, especially since the pandemic in 2020. However, the right digital retail strategy for today’s used dealer goes beyond up leveling a dealer’s web presence. This thinking has evolved, and many in the industry now realize that the sweet spot consumers want when shopping for a car will take a truly omnichannel approach – where customers want to research and build deals online, but still appear in the showrooms at some point in the process when it’s convenient.
The convergence of tools for an omnichannel environment
Driving this omnichannel movement will be continued economic uncertainty and shifting consumer behavior. These trends include a consumer desire for convenience, so they can do as much remotely before coming into the store, save money and have the flexibility to buy when, where, and how they want.
In order to truly enable this experience for consumers, used vehicle-focused retailers, lenders, and OEM partners must team together and leverage the right tools and resources that are advanced enough to power a digital shopping experience in an omnichannel environment.
The lack thereof for this combination of digital-enabling shopping continues to be a pain point for consumers. In fact, roughly 84% of dealers have adopted a digital retailing tool of some kind, but only 30% are maximizing its use in the store, according to dealership technology giant CDK Global Inc.’s 2023 Friction Points Study. What the digital technology adoption statistics show is that dealerships are using digital retailing products as online tools, but relatively few also use them in the physical store.
Pre-qualification technologies as just one example
As an example of a key element of one of these resources, used dealers must leverage sophisticated pre-qualification tools in a way they never have before. Transitioning the consumer from the digital retailing experience into the dealers’ CRM experience and not starting the car buying process over for the consumer is still a significant challenge for the dealership.
Pre-qualification tools today must enable customers to know their terms on vehicles across a dealer’s inventory within minutes, including monthly payments and annual percentage rate (APR).
This is especially critical since inflation and rising interest rates are forcing customers to have a better understanding of what they can afford from the beginning of their shopping processes, allowing them to find vehicles that fit their needs and budget. This is extremely critical, especially today as dealership inventories are once again rising. With more vehicles to choose from, it’s understandable that customers’ appetites will grow larger. The right pre-qualification tools will help dealers match the right customer with the right vehicle, early on in the sales process.
Once pre-qualified on a dealer’s website or mobile app, customers can adjust filters such as down payment to see how it affects their terms or filter to show only vehicles that meet their monthly payment budgets.
This approach will also strengthen a used dealer’s ability to embrace more of a credit-first strategy. Dealers recognize the importance of integrating a smarter credit-first conversion strategy, and leading options today are centered around solutions built around helping customers shop based on payment possibilities.
Credit-first strategies provide a one-to-one personalized shopping experience, allowing consumers to shop simultaneously for their vehicle and financing across a retailer’s entire inventory and finance programs, for all available terms, with rebates, incentives, specials, ePrice, trade-in equity, etc. calculated and applied.
This approach also enables a frictionless shopping experience, and it helps dealers increase the quality of their leads so that they can pinpoint the customers who are qualified, ready, able, and willing to buy now.
The combination of data and technology helping retailers build the right lead-gen and conversion strategy will separate those retailers who thrive, versus those retailers who simply try to survive in the months and years ahead in this new digital ecosystem.
With the emergence of today’s digital and online shopping, the desire to build a more comprehensive and complete omnichannel ecosystem will only grow in importance. As more used dealers and partners continue with their digital retailing transformation they will embrace this strategy with their car-shopping consumers. Having the right tools in place will help them elevate their customer satisfaction scores, prevent fraudulent threats, and ultimately sell more vehicles.