Digital Retail has dramatically changed the car buying experience for both customers and dealerships. We take an in-depth look at most important questions surrounding Digital Retail in this edition of Happy Hao Car University.

Digital Retail solutions are transforming the way dealerships gather leads and sell vehicles.

Digital retail is in high demand for car buyers. Their expectations have evolved, and they are demanding robust digital features that emulate the in-store experience and can be accessed anytime, anywhere. This surge in demand has resulted in an influx of digital retail tools into the market, with varying degrees of success.

These digital retail applications are not simple “plug and play” widgets that can be installed on your website and forgotten about. Digital retail solutions are going to dramatically change the way customers interact with your website, while simultaneously changing the way you interact with your customers.

Car buyers will be handing over leads with much more detail than a run-of-the mill contact form, and in many cases, agree to a carefully crafted offer based on your available lenders, special offers, and finance packages. Deciding on a digital retail solution requires the same kind of research your customers are putting into their vehicle purchases.

• Does Digital Retail mean customers buy vehicles online?
• Do car buyers want Digital Retail solutions?
• How can your dealership provide a quality Digital Retail experience?
• Which Digital Retail solution is right for your dealership?
• The Happy Hao Car Digital Retail solution

We’re here to give you all the information you need before embarking on your digital retail journey. Let’s start by addressing some of the most common questions when it comes to digital retail for dealerships.

Does Digital Retail mean customers buy vehicles online?

Digital Retail for car dealerships means that a car buyer can complete most of the car purchasing process online. While there are a few digital retailing experiences out there that allow customers to complete the entire vehicle purchase process online, we’ve found that it’s best to allow the customers to do most of the heavy lifting at their convenience and then finalize the sale in-store.

There are a few critical reasons for this distinction. Most car customers, especially pre-owned customers, are not going to lock themselves into a large purchase without seeing the vehicle up close, sitting in it, and taking it for a test drive. Even new vehicle buyers will want to sit in a floor model and take a test drive in a similar model before signing on the dotted line and placing an order. In a recent Capitol One report, 82% of car buyers stated that they prefer a hybrid online and in-person approach to buying a car.

Digital Retail solutions are going to dramatically change the way customers interact with your website, while simultaneously changing the way you interact with your customers.

Another reason you don’t necessarily want customers purchasing vehicles entirely online is that you will lose out on valuable upselling opportunities.

By leaving a little bit of wiggle room in the sales process, you allow your sales staff to do what they have been trained to do and give customers the opportunity to try out the premium or limited edition of the vehicle they are looking for. Perhaps after a quick test-ride they are convinced that the extra horsepower or roomier model will be worth the extra money. You won’t have those chances if you don’t allow the customers to see and drive the vehicles once they get into the store.

Now that we’ve gone over what Digital Retail does, and does not mean for car dealerships, let’s take a look at whether car buyers actually want to create their vehicle offers online.

Do car buyers want Digital Retail solutions?

The high level of detail and in-depth features of Digital Retail apps may seem like a headache for car customers but make no mistake, Digital Retail is the preferred way for most customers, especially younger customers, to create their vehicle offers. According to a recent study by Cox Automotive, “80% of consumers say that they want to do at least part of their vehicle purchase online.”

The desire for convenience and transparency in the car buying experience is an upward trend, not some fly-by-night fad that will disappear. You do not want to miss out on leads simply because you don’t offer the same quality of digital car shopping experience as your competitors.

“80% of consumers say that they want to do at least part of their vehicle purchase online.” – Cox Automotive

The vehicle offer creation process evolving into a digital experience is not something that should be avoided, but embraced.

Allowing customers to create offers at their convenience helps mitigate a substantial portion of the anxiety many car buyers have about purchasing a vehicle. Many potential buyers prefer to avoid spending too much time in a dealership, haggling over financing, and filling out paperwork in-person. Giving these customers the option to craft vehicle offers at their leisure gives you more opportunities for leads that generate sales.

There have been several studies that show Digital Retail solutions are going to be critical to the success of your dealership, now and in the future. A Deloitte study conducted in September 2020 sampled more than 2000 recent car buyers to determine which parts of the process they would like to do online instead of in person.

• 78% want to determine the final price of their vehicle
• 75% want to value their trade-in vehicle
• 74% want online credit checks and financing
• 73% want to review and purchase insurance or extended warranties
• 76% want to schedule an appointment to receive/take possession of the car

These figures all point to a customer base demanding Digital Retail solutions, and it’s up to your dealership to provide a robust, user-friendly solution that enables car buyers to create a deal that works for both parties.

How can your dealership provide a quality Digital Retail experience?

Providing a quality Digital Retail experience means that a customer should be able to engage with your store in a variety of spaces and receive a unified journey that ends with the customer ready to purchase a vehicle. They should be able to find your special offers, engage with your website, and walk into the dealership ready to buy.

You can no longer afford to simply use your website as a glorified car lot. Customers won’t be completing the entire sales process online, but they must be able to perform significant parts of it digitally, at their convenience. Whether a car buyer is engaging with your dealership in-person or online, each point needs access to data available across your marketing channels.

Your customers must be able to create their vehicle offers anytime, anywhere.

The modern car buyer requires a convenient, easy-to-use, self-guided approach to purchases, which is where your Digital Retail solution needs to shine.

Digital Retail experiences must allow customers to configure a wide variety of lease and finance offers based on their unique needs, such as their credit ratings, down payment availability, and trade-in amount. When customers provide this level of detail up front, it allows Digital Retail services to calculate and present the best options available for each customer based on their individual needs.

To provide a high level of service and allow the customer to feel comfortable handing over sensitive information, your Digital Retail experience needs to meet certain criteria:

• The application must be backed by real-time pricing, incentives, and tax data unique to your region.
• A Digital Retail experience needs to be user-friendly in order to ease the customer through the offer creation process.
• The entire pricing process needs to be available to the customer. This includes features such as trade evaluations, test-drive scheduling, and aftermarket options.

It is important to note and make clear to consumers that Digital Retail leads are not legally binding until your dealership reviews them and the offers are signed. A Digital Retail offer will still require the customer to come into your store, review the paperwork, and sign on the dotted line.

Which Digital Retail solution is right for your dealership?

Finding the right Digital Retail solution is going to be critical to the success of your dealership’s digital marketing efforts. A poor experience for your customers will cost you hard-earned leads.

One of the major issues that can hamper a Digital Retail experience is a lack of transparency in the offer creation process. When a customer goes through the offer creation process, they will be entering detailed information and making their way through a multitude of menu options.