Dealertrack

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Brian Chee

Dealertrack

Feb 2, 2017

Closing Time at NADA: Celebrating the Past, Looking Forward to a Connected Future

One hundred years in the making, this year’s “NADA 100” convention served as a perfectly-timed and appropriate gateway to the connected and digital future of auto retailing.

On the floor and throughout the keynotes, there was a feeling of measured optimism. At the opening press briefing, Steven Szakaly, chief economist of the National Automobile Dealers Association (NADA), reported a baseline forecast of 17.1 million units, “a slight decline of about 350,000 units, but still a very, very strong year.” Talk throughout the show was about adjusting to the chance of increased automaker incentives, and the impact those incentives may have on the used vehicle market – especially prime off-lease shoppers. According to Cox Automotive Insights, used sales increased 3 percent in 2016, with sales “projected to remain very strong in 2017 as wholesale supplies are expected to rise due to an influx in off-lease volumes entering the market.”

In other words – another year in the life of the automotive business. Come to think of it, that’s what this amazing show has always been about: possibilities. Over the weekend, that played out countless times at demo booths and partner meetings, where the discussion seemed to be less about a slowdown in sales and more about the possibilities of gearing up and getting ready for the next phase of changes.

Possibilities. There’s that word again. We saw it all weekend at the Dealertrack booth, whether the solution helped a sales team, improve business office efficiencies, or streamline F&I product sales. Questions ran the gamut from eliminating data errors to optimizing the time spent with customers, all with the same basic goal: evolve sales operations toward a connected reality that over-delivers on customer expectations and streamlines process into a tight, productive workflow. It was an optimistic show with all eyes on change that revolved around three key topics:

1. Mobility

According to Cox Automotive’s recently released 2017 Car Buyer Journey report, 53 percent of shoppers use multiple devices while shopping for a car, and 18 percent used only mobile devices. That’s up from last year’s 46 percent and 14 percent, respectively, and clearly shows the changing preferences of in-market shoppers. The lesson for dealerships: The days of bland, fern-laden cubicles are disappearing, and fast. Today, customers want the mobile experience to continue inside the showroom.

2. Connectivity

Streamlining key connections throughout the entire purchase journey is all-important, including (and especially) during the showroom experience. For example, the Car Buyer Journey study found that the average car buyer spends 60 percent of their total purchase process online – and that only 32 percent of consumers know the exact vehicle they want when starting to shop. When they get to the dealership, 55 percent only test drive the vehicle they purchase. That reveals the importance of connectivity, and how critical it is that the online to in-store experience is fused throughout showroom operations.

3. Efficiency

All in, technology comes down to finding more efficient ways to operate. Effective technology offers sustainable answers to fundamental retail challenges; it exposes areas of improvement that create competitive advantages. Based on findings from Cox Automotive Insights, one such opportunity lies in the negotiation and paperwork part of the deal. The report found that consumers spend over 90 minutes negotiating and signing paperwork. Their feedback? Reduce the time by 38 minutes. As such, managers visiting the Dealertrack booth were interested in making those all-important improvements, and spent time demo-ing solutions like eContracting and Accelerated Title.

--Brian Chee

Brian Chee

Dealertrack

Content Dev Manager

1492

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Brian Chee

Dealertrack

Feb 2, 2017

The Future of Auto Retail: As Bright as a Thousand Tiny Beacons?

On paper, it sounds amazing: Place a handful of beacons – those tiny gadgets that talk to your smartphone – around a car at a dealership, and create a connection point between the shopper who’s wandering the lot, and content about the car they’re looking over. In a flash, that person is treated to key model features, aftermarket options…not to mention financing and special incentives. The opportunity to actually connect a car to the systems dealers use to market, retail and process a vehicle purchase may well open a new chapter in the online to in-store evolution of automotive retail. It’s beyond RFID codes, and printed brochures. It’s an idea that could re-imagine that initial moment of engagement at the showroom, and help dealers create a more efficient, rich and connected sales experience.

The Internet of Things

But wait – not so fast. Beacons, sensors, gadgets…whatever the name, they’re a part of the Internet of Things, otherwise known as the IoT. According to Webopedia, the IoT “refers to the ever-growing network of physical objects that feature an IP address for Internet connectivity, and the communication that occurs between these objects and other Internet-enabled devices and systems.” A more specific explanation might go something like this: take a car, embed it with a sensor, and enable it to exchange and share information across a network. As a result, you connect the physical and virtual world via a controlled and designed environment. The things that make it happen are very small connectors that use Bluetooth low-energy (BLE) technology to identify the location of a customer and deliver content to them. It works through the use of an app: the signal pings the phone, which pushes the appropriate content based on the location of the person. That creates a more content-rich and private environment, which results in a better consumer experience. The downside, however, is that the customer has to download the app and opt-into the experience.   

Retail Trends

That doesn’t seem to deter major retailers from employing beacons and sensors to more deeply engage with customers. Indeed, according to eMarketer, the use of “proximity marketing” is growing – and fast. The number of beacons deployed by proximity providers has grown from 3.3 million last year to over 8 million in 2016. In a survey conducted by Unacast, “50 percent of organizations connected to the retail, shopping mall, hotel and tourism industries use some form of proximity technology in their marketing efforts.”  Far and away, the most popular device to implement is beacon technology, followed by GPS. Still, though – there are hurdles for all retailers, including automotive. For example, a recent benchmark report by Retail Systems Research found “only 25 percent of respondents had wifi available for employees on the selling floor, and another 19 percent had wireless available for customers.” The study also cast a cautious eye on the issue of consumer privacy in terms of rules, guidelines and opt-in rates.   

The Automotive Internet of Things

Despite the challenges, the automotive industry is applying this technology in literally hundreds of ways, across virtually all aspects of the business. From factory productivity to showrooms, aftermarket and in-car infotainment, sensors that connect vehicles to data and networks are driving a new world order of connected cars and technologies. Gartner, in fact, sees that world growing to 250 million vehicles on the road worldwide by 2020, which adds up to around one-in-five cars. Possible applications run the gamut from enabling urgent medical assistance to advertising, vehicle diagnostics and much, much more.  In its 2016 The Internet of Automotive Things report, eMarketer researchers found that “IoT will give industry marketers more ways to communicate with target audiences, more data to target personalized messaging, valuable feedback about what they are doing right, and more ways to enhance customer service.” On the showroom floor, the technology is steadily gaining more attention. Last year, Ford tested beacons on dealer lots as a way to introduce key features about a specific car. The idea? Create a seamless bridge from research being done online to the showroom experience – a continuation of the online to in-store evolution of car buying.

Connecting the Experience to the Workflow

It all sounds exciting and promising – but then most new technological advances do at first, right? Sometimes, so called “transformative ideas” end up not being as amazing as initially thought. So it will be interesting to see how this connected reality unfolds at the showroom in terms of actual process, dealer adoption, and engagement. It may be that the use of beacons creates an opportunity for dealers to more closely connect sales workflow to car and customer. It may create a richer, more tightly aligned experience in which the dealer maintains control and is able to provide a flexible and nimble sales experience. Those little beacons might one day make it possible for a vehicle on a test drive to be instantly connected to fundamental aspects of the dealer workflow, easing the path to purchase – and creating a significantly more efficient and customer-focused experience.

There’s no doubt that beacons are connecting the physical world of things to the virtual world of content experiences. The only question is how they will be most effectively used at a dealership fitted with integrated retail systems. After all, one of the most compelling possibilities behind the Internet of Things is that it may create a complete retail journey from start to finish -- no matter where you start, engage, or finish the deal.  

 

Brian Chee

Dealertrack

Content Dev Manager

2469

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Brian Chee

Dealertrack

Jul 7, 2016

The Future of Auto Retail: Creating Connected Experiences

The future? It's about leveraging technology to create connected experiences that customers will appreciate and demand, time and time again. As dealers continue on their path toward a true online to in-store relationship with car buyers, making that connection through customer-centric and dealership-controlled technology is a key step toward building trust and maintaining control.

 

It’s something that we’ve taken to heart. Strengthening connectivity powers our desire to create workflow solutions that are relentlessly efficient, transparent and profitable. From the showroom floor to the business office, each aspect of the dealership operation factors into how we approach innovation. To that end, we’re mindful that the business of automotive retail is and will always be all about relationships. As digital tools become prevalent in the space, that doesn’t change. In fact, the need to create a stronger, personal bond with customers is more important than ever – and it’s exactly what thoughtful digital tools do. Already, the technology exists to help to support that type of sales initiative – and as the years roll on, more is sure to follow. Innovation never sleeps, after all – and dealerships should be prepared to understand how they can put technology to work, selling more cars and creating satisfied customers. To that end, here are three future innovations that may one day wind up at your local showroom: one that’s arriving, one that’s on its way, and one that has the potential to make a significant impact to the future of car sales.

Here Now: Structuring the Deal Online

According to Autotrader’s Car Buyer of the Future Study, “consumers want to structure deals online before arriving at the dealership. Fifty-six percent like to start the negotiation on their terms, and 45% like being anonymous to the dealer until they lock in a deal.” The study looked at the current shopping, buying and ownership process, and asked more than 4,002 consumers about their ideal process. Part of its findings showed that when it comes to buying a car, it seems to be less about ecommerce and more about  “connection commerce,” through digital retailing tools like MakeMyDeal. These tools enable online discussion on the vehicle details page (VDP). Connection Commerce gives consumers the platform to create the type of experience they want, in a trusted and authentic environment. As a result, they share legitimate intentions that a salesperson can use to craft a fair deal for all.

Probably Here in a Few Years: Augmented Test Drives

If you’re wondering what Augmented Reality (AR) is, just think about Pikachu – and how the game Pokémon Gohas taken the world by storm. By literally "augmenting" reality with an enhanced and optimized digital experience, the game takes on an entirely different level of entertainment. Just imagine what dealers and automakers could do with AR in the showroom. As a matter of fact, quite a few automakers are already engaged in testing the technology, including Fiat Chrysler Automobiles (FCA), Ford, and others. The work that FCA has done via Accenture Digital – and through Accenture, Google’s Tango developer kit – is moving quickly toward enabling AR interaction with a full-scale version of a car through a mobile device. In addition, Cadillac is exploring way to incorporate virtual reality into its U.S. dealerships; as cars are serviced, for example, consumer can plug in and check out the latest and greatest features. Technology like this expands the role of the dealership, from transaction-based to a more consultative and ongoing experience.

One Day, Maybe: Autonomous Cars

Consultative vs. Transactional. That’s one of the possible future states that may come about as a result of Augmented Reality and Autonomous Cars. And while AR is a device-driven experience that changes aspects of the sales experience, the evolution of mobility may well change virtually everything about the automotive space. Development continues, with particular focus on recent accidents involving Google’s self-driving car and Tesla’s auto-pilot feature. And while it’s too early to tell how it will impact the retail environment, the emergence of this technology points toward the transformation of retail from solely transactional into a more complete, consultative experience. According to The Future of Auto Retailing: Preparing for the Evolving Mobility Ecosystem, (a Deloitte University Press Study) dealerships may end up “combining online shopping with in-store guidance, where the car buying experience manifests itself as an extended “test live” period (rather than a test drive), during which a customer could gauge how the car improves daily life; a partially customized vehicle could take the form of a “base” configuration augmented with tailored entertainment and productivity software.”

That’s crystal ball stuff, to be sure. Regardless of what amazing innovation makes the greatest impact to the business of automotive, one thing is sure: it’s a great time to be a part of a business that’s moving toward new ideas and innovations sure to make life better, more productive and profitable.    

Brian Chee

Dealertrack

Content Dev Manager

2162

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