By Ted Rubin, Founder and President, ActivEngage, Inc.
In August of 1994, Phil Brandenberger went shopping for a compact audio disk, paid for it with his credit card, and made history. This was, by all accounts, the first online transaction. That CD was Sting’s Ten Summoner’s Tales. According to the Times Mirror Center’s 1995 survey, however, only 3% of all Americans had ever logged onto the World Wide Web by that time.
Thirteen years later, people could take the Internet with them wherever they went, thanks to the release of smartphones. A few years later, we saw the rise of omnichannel shopping, allowing businesses to offer a seamless shopping experience, regardless of shoppers’ point of access — desktop, mobile device, phone, brick-and-mortar, etc. Then came the Internet of Things (IoT), most commonly known as your Alexa, along with modern-day appliances, and of course, cars.
Today’s Consumers Live their Lives Online.
We’re in the age of the always-on consumer. The evolution and accessibility of digital have unlocked consumer control, empowerment, and choice to an extent we have never seen before. More people are buying from wherever is the most convenient — at work, on the train ride home, in the bathroom — nowhere is safe from the desire to hit the ‘BUY NOW’ button.
Social media platforms such as Facebook, marketplaces like Amazon, and even online-only stores like Frank and Oak now allow consumers the freedom to buy when they want and where they want. Even the traditional grocery basket is moving closer to its digital tipping point. Retailers like Walmart, Publix, and Target now allow consumers to order grocery items for pickup or delivery to their homes.
Countless industries with tangible goods are looking to digital for ways to close the convenience gap and keep customers coming back — and consumers are loving it.
What Does it Mean for Automotive?
When it comes to “milestone” products like cars, homes, boats, and RVs, digital retailing is currently more about inventory and information than it is about finalizing a purchase online. We, as an industry, have defined it that way for now.
Yes, there have been successful companies like Carvana and Vroom that allow a complete online vehicle purchase, but their business model also includes no-haggle pricing and used-inventory-only sales. That’s not to say we won’t get there — but our take on digital retailing isn’t merely pushing a ‘BUY NOW’ button and paying by credit card.
However, the average customer often does not identify with digital retailing the way car dealers do. Outside of the automotive industry, most define digital retailing as the ability to shop and complete a transaction online. These misaligned expectations can be problematic for dealerships who want to make money while also responding to the industry’s sudden and intense shift into full online retailing.
Be Practical. Listen to Your Car Buyers.
Consumer experience must remain at the center of your focus. Too often, dealerships make business decisions like diving fully into digital retailing and fail because their customer base never wanted the option in the first place. Making a change for the sake of making a change won’t sell more cars — listening to your car buyers will.
Fortunately, it’s easier to have a finger on the pulse of consumer expectations. According to Cox Automotive, 83% of car shoppers want to complete one or more steps of the sales process online, but an even higher percentage still want to sign the final documents at the dealership.
So, what can you do? Let consumers start their paperwork online, offer help and reassurance throughout the process, and provide the best possible consumer experience. These are all things you’d do at your physical store, and you can accomplish it online. Then, take it a step further.
Be Practical. Mirror Online and Offline Experiences.
To be effective with digital retailing, you need to match up your in-store process with your online process. According to eMarketer, 65% of customers expect “consistent levels of service across physical and digital experiences.” Rethink convenience, and make browsing, comparison shopping, and deal-building intuitive and frictionless every time car shoppers visit your digital showroom.
It’s a great time to be a digitally-driven car dealer. You can present your dealership’s inventory in more places than ever, connect with more car buyers, and sell in ways you couldn’t possibly have dreamed of before Sting sold his first CD online. But, with great power comes great responsibility (Spiderman, 1962) — the responsibility to your customers and your business to make digital retailing work today while you prepare for tomorrow.
Learn more about digital retailing and how to use it to your advantage during Ted Rubin’s session at Digital Dealer 27 Conference& Expo (Aug. 19-21, 2019 in Las Vegas).
About the Author
Ted Rubin is the founder and president of ActivEngage. He is a leading expert on Operations Management, process deployment, technology development, and personnel management. Ted has more than 20 years in the automotive industry and has held virtually every position available in both dealership sales and service departments. He also has almost 10 years of experience in banking and real estate. In 2001 Ted co-founded, DealerUps, Inc., his 4th company and the leading CRM in the automotive industry, which was gainfully sold to JM Family Enterprises six years later. Ted is a sought-after thought leader and has consulted for many recognized automotive manufacturers and industry vendors, as well as Fortune 100 technology and services companies, to develop go-to-market plans and business development processes, leveraging Internet-related strategies. Ted has a profound desire to understand people and cultures of the world, and has traveled extensively to many of its far corners.
