By Rusty West, President, Market Scan Information Systems
In 2020 the world adopted online shopping to a degree where brick and mortar retail saw a significant shift. According to Adobe Analytics, during the 2020 Black Friday event, online sales increased 22% over the previous year. Even more impressive, the National Retail Federation expected this year’s online holiday sales totals would increase 20% and reach $202 billion.
The same trends are being seen in the automotive industry as well. It has become very attractive to consumers to place orders for vehicles online considering the disruptions COVID-19 offered this past year.
Online Shopping Is the New Normal
Millennials and Gen-Z contribute to a vast majority of digital retailing. According to McKinsey, less than a third of younger consumers today want to shop for their next car in-person at the dealership, and a larger number of these individuals are interested in contactless service as well.
According to Cars.com, 48% of consumers today would like to handle price negotiations online, and another 42% say they want to handle financing online, including being able to obtain accurate payments online.
If you are to deliver a prime online automotive retail experience, there are many pieces that must be swiftly put together to ensure consistent and transparent messaging for each step of the way for the customers satisfaction to be guaranteed.
In accordance with the effects of COVID-19, there has been an observable shift toward more buyer-friendly accommodations in the automotive retail environment. The goal for retailers should be to provide a convenience to customers that other channels are not providing. To successfully capture the market and deliver on services, the industry has begun the process of implementing new data to create a smooth transition into a fresh automotive shopping experience.
While new data is most helpful to any retailer, the industry contains mountains of data that will reveal the most significant trends within the past 90 days. However, the magic lies between how one uses the data and science to create the best service for their customers. Luckily, today, we have access to the most intuitive analytics platforms ever devised to educate and cash in on ROIs.
The greatest solutions today are engineered to provide dealerships with unwavering expertise in digital retailing and re-innovate the process in which manufacturers build offers to obtain market share- without over compromising.
The Technical Industry of Automotive
The driving force for digital retailing is a user-friendly database which holds all necessary parameters, policy and factor that persuade an automotive sale or lease transaction – every lender program, every manufacturer rebate and incentive, every municipality tax and fee and every term and condition under which each dealership is willing to transact.
Today’s trusted platforms produce honest representation of all five major automotive sectors necessary for a satisfactory sale, online or in-store:
- Manufacturer: Every model and customization offered by other manufacturers; all incentives and rebates including compatibility and combined offers. As well as VIN-specific, option package specific, regional specific, and dealership specific target offers.
- Lender: All published programs offered by each lender in the country, including all parameters, policies and factors that can influence an automotive transaction.
- Dealer: Each dealer’s individual selling price rules, lender relationships, fees, reserve policies, and all other required terms and conditions.
- Municipality & Government: ALL STATE, COUNTY, and LOCAL laws, rules, regulations, calculation methodologies, tax percentage rates and registration fee and DMV calculations.
- Consumer: All consumer credit brands – and how they are segmented and considered by every manufacturer and lender.
The Pieces Come Together
The bottom line is dealers, lenders, and manufacturers should all become roped together to produce a flawless system that can offers a canvas of its most streamlined business model and leaves the customer with ultimate satisfaction. This technology includes a solution that finds, analyzes, and organizes billions of combinations and iterations of all lender and manufacturer programs offered in the marketplace.
Today’s best and most comprehensive solutions better consumer experience and the showroom process by digitally displaying all payment options to customers with complete transparency. As a result, this process drastically lessens transaction times, boost dealership efficiencies and margins, and raise customer satisfaction because of all the information being presented in one place.
2021 has the potential to be an exemplary year for automotive dealers if digital retailing, in this new format, is utilized to its full potential.
About the Author
Rusty West is president of Market Scan Information Systems and has more than three decades worth of experience developing leading data and technology-based solutions for the automotive industry.