It’s pretty much impossible these days to talk about automotive without talking about digital retail solutions. That’s not surprising, now that 80% of car shopping touchpoints have moved online. But it can be hard to pin down what digital retail actually means for automotive. Some define it as actually buying a car online, urging dealerships to prepare for a massive shift. Others, noting that 70% of car shoppers would never buy before seeing the car in person, define digital retail as digitizing as much of the car shopper’s pre-sale journey as possible. Others are still wary of overly digitizing, using the personalization lessons of digital to create a better in-person customer experience without relying too much on technology.
Each of these definitions contains a kernel of truth: personalizing, digitizing, and looking to future trends are all important goals. At the same time, each of them misses the fundamental change that the digital transformation has brought to retail. It’s not about the exact amount of technology your dealership uses, or the exact percentage of the process that moves online. Instead, we need to understand what has really changed in the move to a digital shopping experience.
How has digital retail changed shopping?
Let’s look at two perspectives: the shopper’s, and the retailer’s. For shoppers across industries, digital has brought unprecedented convenience and personalization. They can shop from their phones whenever they want, they can access a world of information, they can send questions to Facebook chat with instant answers. They also can expect product suggestions, ads, and dynamic websites that respond to their interests. Shopping, especially online shopping, has become a much better experience.
On the business end, providing for all these new customer needs is a challenge, and can feel like a race to meet the latest demand. But the digital transformation offers a significant benefit for retailers as well: they now have more insight than ever into what customers want. They can track behavior online. They can see impressions, clicks, and conversions from website campaigns. They can tell which ads generate responses and which don’t. They can even track in-store behavior, such as which areas get high foot traffic and how many customers arrive each hour. So, while it’s true that buyers expect more, sellers also are able to align service with customer needs like never before– and that can be a major win for dealerships.
What digital retail means, and why it matters for your dealership
Digital retail for auto, then, is about a change in mindset: it’s the shift to a more customer-centric model, powered by data. Retail industry influencer Nikki Baird helpfully talks about this in terms of the “digital value chain,” where sellers focus on collecting data, turning data into insight, and insight into action. In other words, digital retail means collecting as much data as possible, and then learning from that data to create smarter strategies.
Thinking about digital retail this way allows your dealership to take a proactive approach. Instead of scrambling to catch up with the latest trend, you can take a step back and think: how can you use data to understand your customers better? What pain points do you now have the ability to address, and what tools can you use to address them? And finally, how can you use data to build a more strategic marketing plan? The digital transformation means being able to reach customers more successfully– and sell more cars as a result.
Here are some practical ways to employ this proactive, data-driven approach:
Find the pain points on your website
Shoppers use your website to do hours of research before coming to your showroom, so giving them the best online experience possible is crucial. A focus on data makes it easier to figure out what’s working on your website, and what’s not. Gather user data that answers these questions: Are you getting high VDP views from expensive ad campaigns? What is the bounce rate on paid traffic vs. organic? Are shoppers scrolling the way you expect them to and clicking your CTAs? Are conversion tools engaging or are they just getting in the way? Digital tracking tools including Google Analytics and heatmaps allow you to see what users are doing onsite, and whether they are finding what they need or getting frustrated.
You might discover that one of your lead forms asks for too much, and your shoppers are not willing to fill it out. You’ll then have the opportunity to streamline the form and ensure it’s actually helping customers achieve their goals. You might find that users are ignoring a particular button and reconsider the placement or language. You might find that certain pages are not getting enough traffic and analyze why. These insights help you provide a better online experience for your shoppers– and smarter strategies for engaging your online shoppers.
Use tech that actually helps your customers– and you
There are so many digital tools these days that choosing can be overwhelming. Your customer data can help you choose which tools are actually helping your shoppers on their shopping journey and which ones are not worth it. When tracking lead capture tools, notice not only how many conversions they bring, but also whether they are related to a higher bounce rate or shorter site visit. Track if people are using your chat tools or closing them immediately. Ask your in-store customers if they find your F&I software helpful. You can even visit your site, taking on different personas and experiencing your tools to see what it’s really like for your customers. Just because a tool is digital doesn’t mean it’s helpful. Anything that’s not furthering your dealership’s goals should be reevaluated.
Follow the entire customer journey
Often, data tracking systems do not communicate with each other, which can make for a stilted customer experience. For example, a customer’s on-site behavior may not be recorded properly in the CRM, so follow-up conversations end up being repetitive. Or ad tracking is not integrated with website behavior– so it’s hard to see which ads actually lead to sales.
Conversion tools often don’t communicate with each other, so customers keep getting asked to enter the same information or seeing offers that are not relevant. All of these disconnects interfere with a process that should be seamless. To whatever extent possible, data sources need to be connected for a larger picture of the whole customer journey. Smoothing bumps in this path provides the ability to understand customers better, and to be more strategic at every stage of marketing.
Across industries, the digital transformation is forcing businesses to rethink their strategies. Luckily, the shift to digital can be an amazing opportunity for growth. It can allow your dealership to use data to provide more for your customers– while they provide you with the data you need to keep improving your business. Digital is about insight– and insight is key to success.