By Pete MacInnis, Founder and CEO, eLEND Solutions

In late 2021, we sought out the answer to the question – In the Post-Pandemic New Normal, Where does Digital Retailing End? After surveying automotive dealers across the US, some of what we heard was predictable, some was not. Here is a little of what dealers told us, and I will share more during my presentation at Digital Dealer Tampa on May 11 from 10:00 – 10:50 AM.

While dealerships confirmed that the pandemic sped up the adoption of digital retailing (DR), increased PVR and decreased transaction times, our survey results indicate that dealers are still stopping short of a full digital path to purchase. Despite the fact that many dealers allow customers to perform the initial car purchasing steps remotely, there is a significant drop off in offered digital capabilities as the buyer moves closer to the deal, i.e., digital F&I: twenty-three percent stop their digital path short at a qualified deal structure and another 24% end the customer’s digital journey at the very first pencil. This illustrates that many dealers remain hesitant to move F&I online, a major speed bump in the realization of ‘transactional’ digital retailing.

Also hindering DR’s potential, are the ongoing people/staffing challenges related to the operational changes required for a successful DR transformation. And, there is ongoing evidence that dealers have mixed views of the role of DR: 53% view it as the start of the deal (i.e., deal generation), while 47% view it as simply enhanced lead generation – a major hurdle to the true realization of an end-to-end digital path to purchase.

People, technology and process challenges continue to plague the advancement of digital retailing, the survey revealed, along with a small, but significant, hardcore of dealers who reject digital retailing capabilities altogether. Approximately one-third of dealers reported not offering customers some of the most basic buying conveniences online, and nearly one-third disagreed that offering digital path-to-purchase capabilities for customers is critical to their retail success.

Despite the growing pains for dealers, consumers’ preference for digital buying experiences shows no signs of slowing down: almost 80% of dealers reported that over 20% of their retailed unit sales were initiated via a DR tool or platform – and this is well past the height of the pandemic.

In spite of this, our survey results offer evidence that dealers are bullish on DR, if not now, but in the future, with nearly one in three dealers predicting that in just 3 years 25% of all retail vehicle sales will be completed partially or fully online.

The question, however, remains: when will dealers accept the inevitable evolution to an increasingly digital buying experience?

A snap survey we fielded of dealers right before NADA 2022 did not offer much in the way of progress. In fact, it showed that dealerships are experiencing a significant disconnect between the online and in-store process and, while they agree this must be solved to shorten transaction times and improve the customer experience, the survey results show that they remain reluctant to fully embrace DR.

My presentation will offer a ‘pandemic new normal’ reality check, supported by our most recent data from dealership surveys, and underscore that offering a customer-first experience, delivering what consumers want, when they want it, will advance dealership profits – and DR – well into the future.

Author: Christine Corkran

Digital Dealer