In my many discussions with dealers, the one question that invariably comes up is “What is online retailing, really?” They’ll then begin to tell me how consumers can already buy a car online from them. They have a widget with which a consumer can get their trade value. They have an online payment calculator. Customers can submit a lead, get a quote online and even correspond with Internet Managers and then come to a price agreement before they even come into the store ….This is the point in the sales cycle that I like to share what online retailing is to your customers, what they expect and why this heightened experience is getting such huge consumer adoption.

You see, despite all of the technology now available for dealers to use to (supposedly) make online car buying easier, our research has found that this mish-mash of widgets plaguing auto dealer websites simply doesn’t work and actually may cause confusion and offer additional exits from dealer websites, without getting the valuable engagement, trust and lead info.

Sure, I’m told that dealers are getting some leads from them. People are using their trade value tool. They’re converting. I’ll sit back. Listen. Then throw this out there: Our research shows that while your customers are using these tools guess what they then do … they leave. In fact, we’ve found that there is a 200-300 percent ‘missed opportunity’ because of these widgets. Why? For a couple of reasons:

1. The customer uses your trade-in value widget -- which in many cases is really only a frame-in of a valuation company’s site such Black Book or Kelly Blue Book. They input their vehicle information then discover that their vehicle isn’t worth what they thought it would be – much less in fact. They decide to sell it on Craig’s list …and they leave.
    
2. The customer is only interested in a specific car, goes to the VDP page and starts inputting figures into the online payment calculator to find that the payment is too high based on the information they input. We all know that in the ‘majority’ of cases, there are a lot more factors that make a car deal than a singular payment option…and they leave.

These are just a couple of reasons. But if they are occurring on your website, they are causing you to lose opportunities. In today’s landscape, we as dealers must take a hard look at our websites and ask ourselves, “does our site gain the consumer’s trust, simplify the process and make the consumer ‘want’ to engage?”

The reality is that even with all of the technology available, we’re still in a people business. Only a small percentage of customers are going to be OK with the cold and mechanical process delivered by these widgets. On top of this, none of these widgets collaborate. There are multiple pieces for each and every car deal. Without human interaction with a customer during the information discovery process, in the majority of situations, there is no way for a car deal to happen.

Sure, the customer “could” collect each piece of information bit by bit and attempt to assemble a deal structure on their own – this is how much my trade is worth, this is how much my payments should be with this interest rate and this much down. But invariably when they contact the dealership, or arrive armed with the information that your website gave them, we all know what happens. Things change. When that happens, customers get upset.

So, to answer the initial question of what online retailing really is. Online retailing is simply an extension of how we sell cars already -- except it moves that process into a single online experience that is integrated, accurate and builds a relationship along the customer’s journey.

Rather than seeing a customer bounce from your website because they used your self-service trade-in value widget and it scared them off, offer a fully integrated online buying experience that moves them through the sales steps with interaction between the customer and your dealership. Find a tool that is Amazon-easy, yet fully integrated, so it is also Amazon-easy for your team members at your dealership. I believe that the consumer (in 95% of cases) wants to come to your dealership for the full experience. But only after the entire deal is finalized and you have earned their trust and respect. That is part of the fun! It’s all about, trust, respect and simplicity.

The customer doesn’t just want information, they want ACCURATE information and while they may THINK all that matters is how much you’ll give them for their trade, we all know that it’s the whole deal that matters, not just any particular piece of it.

Online automotive e-commerce should cultivate relationships with customers; build trust; create a great customer experience by avoiding erroneous figures or misunderstandings due to generalist information; and allow you to protect your profit margins and increase market share.

You would never pencil a deal and present any single piece of the deal puzzle without knowing the whole picture. But that’s exactly what many dealers are doing online with the many widgets created by coders and companies that have not ever set foot in a real car dealership.

I believe in this great industry and I know beyond a shadow of doubt that we must evolve our digital showrooms to a point where the consumer trusts us, experiences simplicity, and even awe, to the point where they will ‘want’ to engage. Then we must continue that experience at the dealership and employ team members who share that same vision. And THAT is what online retailing really is.

There’s little doubt that the experience provided by auto dealerships in the past has jaded consumers into a stereotype and perception that isn’t necessarily accurate any longer, yet continues to persist. Because of this perception, companies such as Beepi, Carvana and more are creeping into the automotive space and threatening to snatch sales away from dealerships. (how? by providing customers the ability to purchase their car online) These companies pose a true threat as they are luring our customers away – and make no mistake, these are our customers – through messages of convenience and an excellent customer buying experience. Carvana was just named #5 on Forbes list of America’s Most Promising Companies. The hundreds of millions invested in these companies show that Wall Street believes their business models are viable.

Online deal creation is simply a response to consumer demand. Consumers no longer wish to spend hours at a dealership in confrontational situations with salespeople and sales managers hiding behind one-way glass. These consumers have more knowledge at their fingertips than they have ever had in history and that transparency is only going to grow. We have countless studies that prove that only 1.5% of consumers expect to be satisfied with their showroom experience when buying a vehicle, and that is the truth - not a manipulated CSI report where the sales person begs for 5's and Y's.  This is a failure on our part and the catalyst for these online auto sales companies that are creeping into our space, taking our sales and resulting service and parts business.

It wasn’t that long ago that dealers didn’t think they needed a website - we all know how that worked out. As consumers have become more conditioned to shopping online for everything from luxury items to toilet paper, our industry has been the last to embrace this trend. If dealerships don’t wake up and understand that consumers will buy things the way they want to buy them, we’ll only be helping these other companies gain ground. There is no reason for this to happen. The technology exists today to facilitate a similar (and superior) online buying experience as the disrupters entering our market. Embrace technology to provide the same type of buying experience as these start-up competitors and you could literally stall their momentum. Dealers will always have the advantage with a physical inventory. And, consumers want to touch and feel a vehicle prior to purchasing it. Frankly, there aren’t many consumers that want to spend tens of thousands of dollars on a vehicle without even seeing it or driving it first.

It seems that the fear dealers have adopted concerning online deal creation stems from a perception that they will sacrifice gross in the deal. I can tell you for a fact that this is simply untrue. At Dick Hannah, we implemented this online deal creation process to massive success and profitability.

I think there needs to be more discussion about the "Evolution of Culture' in our dealerships. The entire staff must get behind this evolution - every dealership needs a champion. Which is it, the whole dealership or a champion? We must study these platforms, learn and adapt to satisfy consumer needs/demands and send these Wall Street companies packing!         

There’s little doubt that the experience provided by auto dealerships in the past has jaded consumers into a stereotype and perception that isn’t necessarily accurate any longer, yet continues to persist. Because of this perception, companies such as Beepi, Carvana and more are creeping into the automotive space and threatening to snatch sales away from dealerships. (how? by providing customers the ability to purchase their car online) These companies pose a true threat as they are luring our customers away – and make no mistake, these are our customers – through messages of convenience and an excellent customer buying experience. Carvana was just named #5 on Forbes list of America’s Most Promising Companies. The hundreds of millions invested in these companies show that Wall Street believes their business models are viable.

Online deal creation is simply a response to consumer demand. Consumers no longer wish to spend hours at a dealership in confrontational situations with salespeople and sales managers hiding behind one-way glass. These consumers have more knowledge at their fingertips than they have ever had in history and that transparency is only going to grow. We have countless studies that prove that only 1.5% of consumers expect to be satisfied with their showroom experience when buying a vehicle, and that is the truth - not a manipulated CSI report where the sales person begs for 5's and Y's.  This is a failure on our part and the catalyst for these online auto sales companies that are creeping into our space, taking our sales and resulting service and parts business.

It wasn’t that long ago that dealers didn’t think they needed a website - we all know how that worked out. As consumers have become more conditioned to shopping online for everything from luxury items to toilet paper, our industry has been the last to embrace this trend. If dealerships don’t wake up and understand that consumers will buy things the way they want to buy them, we’ll only be helping these other companies gain ground. There is no reason for this to happen. The technology exists today to facilitate a similar (and superior) online buying experience as the disrupters entering our market. Embrace technology to provide the same type of buying experience as these start-up competitors and you could literally stall their momentum. Dealers will always have the advantage with a physical inventory. And, consumers want to touch and feel a vehicle prior to purchasing it. Frankly, there aren’t many consumers that want to spend tens of thousands of dollars on a vehicle without even seeing it or driving it first.

It seems that the fear dealers have adopted concerning online deal creation stems from a perception that they will sacrifice gross in the deal. I can tell you for a fact that this is simply untrue. At Dick Hannah, we implemented this online deal creation process to massive success and profitability.

I think there needs to be more discussion about the "Evolution of Culture' in our dealerships. The entire staff must get behind this evolution - every dealership needs a champion. Which is it, the whole dealership or a champion? We must study these platforms, learn and adapt to satisfy consumer needs/demands and send these Wall Street companies packing!         

An aspiring actress was planning a cross country move from New York to California to pursue her acting career and wanted to work as an Uber driver between auditions. This, of course, necessitated a reliable vehicle - something that she did not need in New York. She had heard of an online used car buying platform, Beepi, but wasn’t exactly sure if she should trust such a big purchase for a vehicle sight unseen. However, their 10 day/1,000 mile guarantee established enough trust for her to proceed. When she found a 2012 Toyota Corolla with 12,400 miles on the odometer and within her budget, she was interested. She went to her local Toyota dealer that had a similar vehicle in stock, took a test drive and left without giving the sales staff an opportunity to make a sale. A visit back to Beepi’s website and a few clicks and her vehicle was on it’s way to her door. This story, recently told by the Los Angeles Times, is becoming a more frequent one as start-ups attempt to transform the car buying process into one that’s more convenient and consumer friendly. And they have some big money betting that their business models will take off.

Since the explosion of the Amazons and Zappos’ of the world, customers have forced retailers to transform the shopping experience. Nobody can argue that Amazon continues to revolutionize and grow by doing the one thing that makes it successful – offering a more convenient platform for people to buy from. Amazon did not get to where it is today by making it difficult for people to do business with them, they did it by making it easier, faster and more convenient. It wasn’t that long ago that if you wanted to purchase a book, you had to trudge down to the local bookstore and hope they had it in stock. Now, in some markets, Amazon will deliver it to your door within an hour… along with your groceries, the latest movies and just about anything else you could want. And consumers love it.

Just about every automotive vendor’s service or product is designed at the core to do one simple thing - make someone’s life easier. Whether that’s the widget on your website that allows customers to get their own trade-in value;  a chat service that enables customers to communicate with you instantly without picking up the phone; or the many technologies that make dealerships more efficient, these tools all seek to create a better and easier buying experience for consumers. However, for many consumers, that’s not enough. They want an easy button.

I doubt many would argue with me when I say that the consumer perception of the process for buying a car is poor. Certainly those experiences vary from dealer to dealer. But the basic steps of our in-dealership processes remain the same - find needs/wants, test drive, proposal, finance, delivery. It’s only the execution of these processes that perhaps differ dealership to dealership. In the Beepi story, the car shopper did visit a dealership, but only to test drive a vehicle similar to the one she’d already seen on the Internet. That was all she needed to make the buying decision. The website took care of the rest. Imagine if she had been able to accomplish the same thing on the dealer’s website and only had to come in to test drive the vehicle. That’s exactly what she did. The only difference being that she purchased from Beepi instead of the dealer.

Many dealers are paying close attention to such start-ups. Used car sales start-up Vroom has closed investment rounds with capital from investors that include John Elway and former AutoNation CEO Steve Berrard. While another site, Carvana, is backed by auto retailer DriveTime, a company with over $1 billion in revenue that specializes in selling and financing used vehicles to consumers with challenged credit.

At some point, a tipping point will be reached for start-to-finish online car buying transactions. These start-ups prove that there is consumer demand for this type of buying experience and the technology is already available to do it.

I strongly believe it is time to embrace the trend and take steps to provide your customers with an easy button -- then perhaps you’ll find that they choose you rather than your online - and very real - virtual competition.

An aspiring actress was planning a cross country move from New York to California to pursue her acting career and wanted to work as an Uber driver between auditions. This, of course, necessitated a reliable vehicle - something that she did not need in New York. She had heard of an online used car buying platform, Beepi, but wasn’t exactly sure if she should trust such a big purchase for a vehicle sight unseen. However, their 10 day/1,000 mile guarantee established enough trust for her to proceed. When she found a 2012 Toyota Corolla with 12,400 miles on the odometer and within her budget, she was interested. She went to her local Toyota dealer that had a similar vehicle in stock, took a test drive and left without giving the sales staff an opportunity to make a sale. A visit back to Beepi’s website and a few clicks and her vehicle was on it’s way to her door. This story, recently told by the Los Angeles Times, is becoming a more frequent one as start-ups attempt to transform the car buying process into one that’s more convenient and consumer friendly. And they have some big money betting that their business models will take off.

Since the explosion of the Amazons and Zappos’ of the world, customers have forced retailers to transform the shopping experience. Nobody can argue that Amazon continues to revolutionize and grow by doing the one thing that makes it successful – offering a more convenient platform for people to buy from. Amazon did not get to where it is today by making it difficult for people to do business with them, they did it by making it easier, faster and more convenient. It wasn’t that long ago that if you wanted to purchase a book, you had to trudge down to the local bookstore and hope they had it in stock. Now, in some markets, Amazon will deliver it to your door within an hour… along with your groceries, the latest movies and just about anything else you could want. And consumers love it.

Just about every automotive vendor’s service or product is designed at the core to do one simple thing - make someone’s life easier. Whether that’s the widget on your website that allows customers to get their own trade-in value;  a chat service that enables customers to communicate with you instantly without picking up the phone; or the many technologies that make dealerships more efficient, these tools all seek to create a better and easier buying experience for consumers. However, for many consumers, that’s not enough. They want an easy button.

I doubt many would argue with me when I say that the consumer perception of the process for buying a car is poor. Certainly those experiences vary from dealer to dealer. But the basic steps of our in-dealership processes remain the same - find needs/wants, test drive, proposal, finance, delivery. It’s only the execution of these processes that perhaps differ dealership to dealership. In the Beepi story, the car shopper did visit a dealership, but only to test drive a vehicle similar to the one she’d already seen on the Internet. That was all she needed to make the buying decision. The website took care of the rest. Imagine if she had been able to accomplish the same thing on the dealer’s website and only had to come in to test drive the vehicle. That’s exactly what she did. The only difference being that she purchased from Beepi instead of the dealer.

Many dealers are paying close attention to such start-ups. Used car sales start-up Vroom has closed investment rounds with capital from investors that include John Elway and former AutoNation CEO Steve Berrard. While another site, Carvana, is backed by auto retailer DriveTime, a company with over $1 billion in revenue that specializes in selling and financing used vehicles to consumers with challenged credit.

At some point, a tipping point will be reached for start-to-finish online car buying transactions. These start-ups prove that there is consumer demand for this type of buying experience and the technology is already available to do it.

I strongly believe it is time to embrace the trend and take steps to provide your customers with an easy button -- then perhaps you’ll find that they choose you rather than your online - and very real - virtual competition.