In a world where it feels like every industry pundit has provided their 2020 predictions, we wanted to hear directly from those who hold the purse strings — dealer executives responsible for running dealership operations day in and day out. So, we interviewed some of our top dealer partners to see what they had to say. We asked them what trends they felt would come to fruition in 2020. How will the sales process evolve? Will Digital Retailing continue to grow? How will dealers attract top talent? What will help them maintain their competitive advantage? What else do you think dealers need to prepare for?

Here’s what they had to say:

PREDICTION 1: Digital Retailing Adoption Will Continue To Grow

Ok, in all fairness, we did only ask people who are using Digital Retailing today. However,  we think it is important to hear WHY they think it will continue to grow BECAUSE they are using it.

Christian Storm, Training & Development Manager at Planet Automotive in Colorado believes that the growth in Digital Retailing will be driven by customers reading reviews about the experience it enables and coming to dealerships expecting that type of experience.

Our research backs this up as well. As of this year, millennials will make up the largest segment of car buyers at over 40% of the car shopping population. And if there is one thing we know -- Millennials tend to buy things online. In fact, according to a UPS Pulse of The Online Shopper report, 54% of all millennial purchases are made online. With that said, when it comes to car buying, they still want to test drive the car over 60% of the time, according to a recent MSN Study. So, dealerships need to be prepared to enable customers to do some or all of the process online before they get there. Pair that with the fact that almost all Millennials read local business reviews online and you have a winning recipe for Digital Retailing success.

Jeff Miller, GM at Mark Miller Subaru in Utah, spoke about how continued adoption of Digital Retailing will be fueled by OEM requirements. The development of OEM Certified Digital Retailing programs took shape over the course of 2019, with Audi, Mercedes, Lexus, Toyota, Hyundai, VW and Subaru leading the pack. 

Of course, it doesn’t hurt that some of these OEM programs subsidize a portion of the cost. In a world where profits are declining, every little bit helps. Especially for tools that can assist dealerships with expediting the purchase process, leaving time to introduce the customer to incremental profit centers such as F&I, accessories, and service.

Brendan Harrington, VP at Penske Motor Group, thinks Digital Retailing will help the industry make progress toward more transparency. While many dealerships have become a lot more transparent, there is still room for significant improvement. As customers experience transparency via Digital Retailing solutions, the dealerships that do not fully embrace transparency will suffer.  

Brendan also believes that the spotlight on customer experience means investing in longer return policies and providing customers with the ability to test-drive vehicles from the comfort of home -- both trends that align with the retail industry evolution outside of automotive.

PREDICTION 2: Technology Will Evolve The Sales Process

In many of our recent dealer interviews, friction amongst staff has surfaced as a huge pain point related to employee & customer satisfaction. As anyone who has worked in a dealership knows, the long line of salespeople queued up next to a sales manager’s desk is not the most efficient use of anyone’s time.

Both Brendan Harrington and Mike Ebrahimian, GM at VW Sunnyvale talk about this pain point as the problem to solve in 2020. As Brendan states, the ideal process would include further empowerment of the sales professional.

Our belief is that when this becomes more commonplace, managers will be free to get up from behind the desk, interact more with customers, and coach their teams to drive incremental sales.

Mike talks about how we can also reduce friction by empowering the customer to execute the whole deal from beginning to end in one place, ideally on the dealer website. The idea is to enable the customer to do much of the work ahead of time and finish it in-store; reducing much of the back and forth, as well as time spent completing the transaction. Putting these two strategies together is a power punch, leading to significant efficiency gains.

Of course, there are other areas of the process worth tackling. Brendan & Jeff talked about quicker and more accurate trade valuations, e-contracting, and digital paperwork as linchpins to completing the deal 100% online. Christian also talked about the power of video both online and in-store as a significant differentiator for dealerships to explore.

All of these viewpoints reinforce the fact that digitization of the sales process is here to stay and 2020 will be the year that more dealerships will embrace it.

PREDICTION 3: Employee Retention Improved With A Streamlined Sales Process

As mentioned above, the digitization of the sales process is the name of the game, and this can have a positive effect on both recruitment and retention. Mike predicts that digitization will help better define employee expectations, leading to happier customers, happier employees, and less turnover. He is already experiencing this himself as the time to onboard new employees has shrunk from 2-3 weeks to just 2-3 days.

And what about retaining employees? Christian says that defining a career path for people entering the industry is the key to success.

And who are the companies that dealerships will lose staff to? According to our Millennial Job Satisfaction Study, Amazon and the Apple Store make the top of that list with 94% of millennials saying that technology plays a critical role when choosing their ideal job. To retain employees, dealerships should focus on reducing high pressured sales tactics, moving to a more salary-based compensation plan, and offering flexible work schedules. Not only will this help retail employees, but it is a significant driver in attracting new talent.

Of course, there are other factors -- Brendan feels strongly that people flock to success and that dealerships need to position themselves as the place that the best flock to. This starts with being clear on what success means to you and sharing your dealership’s goals and achievements with your entire workforce. Not only can this bring staff closer together, but it will nurture a culture of growth and positivity.

PREDICTION 4: Continued Focus on Customer Experience, Consolidation, and Electric Vehicles

While these themes are not new for 2020, the fact that retailers see a continued focus on them is very telling. We believe that customer experience will continue to be the overarching theme that dealerships around the country need to focus on for the foreseeable future.

As such, weaker stores who do not adopt this mindset will start to struggle more. According to Brendan, the strong will gain market share while the weak will be sold, consolidated, or shut down.

Christian believes that efficiency even extends into our vehicle selection with EVs continuing to grow in popularity. He urges dealerships to embrace this new technology by being able to speak the EV language. Vehicles are already being held on to longer, and EV technology will elongate this further. Sustainability is not a topic to be overlooked as it relates to serving your future customers.

Serving future customers is at the center of it all. And the best way to ensure a great customer experience is to standardize it. This speaks to our final prediction, which is one of our own -- Dealer groups will take a much more active role in standardizing process across all of their stores to ensure a consistent and seamless experience. People who cannot get on board with their vision will find it hard to maintain their place within the group, no matter how successful they have been in the past. 

So there you have it-- the retailers (and Roadster) have spoken. We would love to hear what you think. Anything we missed?

A few weeks ago, our COO Rudi Thun wrote a blog post on the most important role in dealerships that often goes unfulfilled. He called it a Digital Retail Manager, but call it whatever makes sense to you—it is about having someone with the political capital to drive process change across all departments within the store. We have gotten a lot of great feedback on this post, many asking where a dealership may find this kind of talent and even questioning whether just one person can manage the role.

Regardless of your perspective, the presence of a strong champion is the #1 predictor of success with digital retailing; the numbers don’t lie. Stores with champions see customers digitally build deals at four times the rate of those who don’t have this role in place.  

Why? Because on the road to modernization, champions build the new process, help train the staff, oversee the technology implementation, and continuously monitor utilization. As you can imagine, usage is the key to driving 4x the performance.

It is equally as critical that you have a Dealer Principal, Dealer Group Executive, or General Manager that understands the importance of this role and gives their champion(s) enough autonomy to get things done. 

Do these people really exist? Yes, without question, they do. Rene Lawson at Penske Motor Group, Dan King at Sun Automotive Group, and Joe Lukich at #1 Cochran to name a few. They are process-driven, respected, and team-oriented. They see a way to get things done regardless of organizational resistance, system complexity, or short-term hiccups. They aren’t afraid to take a step back to take two steps forward. 

Take Rene Lawson, Finance Director at Penske Motor Group. When she was at Longo Toyota, she had the vision to go digital and remove as much paperwork in the store as possible. She was initially met with a lot of resistance from people that have been at the dealership for decades—yes, decades (incidentally, Longo has the highest employee retention rate I have seen in the industry). Rene eased her team into the change, giving them a month to try a digital credit app. At first, she only required that they use it during the week, leaving busy weekends for the paper credit app if desired. Rene worked hard to gain their trust and buy-in of the new process while proving it to be more efficient. She eventually gave a date that paper credit apps would be completely removed from the dealership…and that’s what happened; everyone got on board. 

Another excellent example of a successful champion is Dan King, COO at Sun Automotive Group. The dealer group studied digital retailing platforms for 18 months before deciding to jump in. During that time, they were watching Carvana and studying the positive experience provided to their consumers. Todd Caputo, CEO at Sun Automotive Group, had some particular changes in mind for his stores. He wanted to go to a one-price model and take costs out of the equation by transitioning to a one-person selling model, thus eliminating his BDC and Finance departments. Knowing how big of a change this would be, Todd turned to Dan to carefully plan the transition.  Dan recognized up front that they would lose staff who wouldn’t be able or willing to make the changes, and he set out to hire and train new personnel before making the cutover.

Employees had to show their commitment to the way the store would be run moving forward. They turned over 90% of their staff during the transition, but those who stayed now love it. They are working fewer hours and selling more cars than ever before. Now, Dan hires employees from the likes of Red Lobster, Best Buy and other local retail outlets for their customer service expertise and pays them a salary vs. just commission. This focus on customer experience has drastically improved the tone of their customer reviews and has reduced the store’s expenses by hundreds of thousands of dollars. It wasn’t easy. They did take a step back in backend gross when the sales team first started selling F&I, but they are now five months in and are seeing these numbers rebound. Todd and Dan aren’t looking back.

“You can’t just implement digital retailing and leave it at that. If you don’t evolve your entire business and culture, it won’t work… And it has to–If we can’t compete with Carvana and CarMax, then we lose our business.”  – Todd Caputo, Sun Automotive

Our third champion is, Joe Lukich from #1 Cochran His role was literally born out of the need for a champion. COO Denny Patton wanted to modernize the #1 Cochran experience and reduce the time spent per transaction, so he found a technology solution that could facilitate these changes and put Joe at the helm of making it happen. Denny shows up at each dealership to kick off training sessions and to make sure his teams know that Joe is responsible for ensuring their success.  Joe’s title: Variable Operations Process & Training Manager. He rebuilt the entire sales process and wove digital retailing into the #1 Cochran onboarding guide. He has led the transition to salespeople penciling deals on iPads in-store, works closely with the Internet and BDC teams to roll out consultative talk tracks, and ensures that the CRM integrations are configured to adopt digital retailing to its fullest. 

Champions get things done, period. They audit their processes and reinforce utilization; they develop a go-to-market plan, demanding nothing but marketing and operational excellence; they think through the lens of the customer and employee experience from A to Z; they pull reports, adjust processes, train teams and sweat the details. 

“If you really want to do this right, and create a customer experience that maximizes Digital Retail Tools and Processes, no one has this thing figured out yet. Logistically speaking, there are so many nuances you have to figure out that are so dealer-specific that you need to have someone that helps build this from the ground up within your dealership.”  – Joe Lukich, #1 Cochran 

Each of these individuals is an amazing human being. I feel lucky to know each of them. And while the Champion role is often missing in most dealerships, when it does exist, the people who fill it are the unsung heroes. More than anything, they are givers, open to sharing their experience with anyone curious about what it takes to be successful. They show up every day, and they get things done.

So ask yourself, does this person exist in your dealer group or at your store? Refer back to Rudi’s job description to be sure. If you have someone, give them a shoutout in the comments. Heck, give them a raise; they deserve it.

If you don’t have one, please rip off our job description and get it posted for your store ASAP. You will thank me later.  

Anyone love their phone company? If you are like me, there is nothing I abhor more than needing to call them. Every time I call, I have to do a bit of meditational breathing and mentally prepare myself for what will inevitably be hours of frustration. Not only will there be excessive hold times involved, but I will also be bounced from department to department, left dealing with several different people and having to repeat my issue over and over again. If I’m not disconnected along the way, it feels like victory. Sound familiar?

Now, compare this to the Apple store experience. I make an appointment online, walk into the store at my designated time and get assigned an Apple Genius who will help me every step of the way. Not only do they stay by my side, but they are empowered to answer questions and even ring me up right there on their iPhone when I am ready to transact.

And so there it is — the world we live in, shifting between these two contrasted experiences. And the more Apple-like the world gets, the more we are unwilling to deal with extended wait times and poor customer service.

What would happen if the phone company empowered their frontline employees to help with all of the situations they may be faced with? Think of the minutes a customer spends on hold before resharing the same story 2, 3, 4+ times; or the minutes employees waste transferring people around and listening to the same stories their colleagues have already heard. Would one person be more efficient? Would customers stop dreading the experience and — dare I say — even find it enjoyable?

This is happening within the automotive retail sector as we speak. Progressive dealers around the country are deploying technology and empowering their sales teams to streamline the entire process.  And while many dealerships refuse to change, most sit somewhere in between — trying to enhance the experience, but without the tools or buy-in to make it stick.

As we head into 2019 and a world of declining SAAR, customer satisfaction and efficiency are going to be critical areas of focus for dealers to both obtain and retain buyers. As the CMO of a technology company in the space, let me be the first to say — technology itself is not enough to accomplish these goals. How you train and empower your teams to use the technology and streamline your operation is the key to a successful future.

Don’t believe me? Late last year the Roadster team set out to put some data behind this phenomenon. Not only did we survey over 1,500 consumers, but we also observed “transactions in the wild” at eight dealerships, representing six different brands. Here’s what we found:

Customer satisfaction significantly drops every time the salesperson leaves the customer’s side.
 

Thanks to our friends at AutoTrader, we already know that satisfaction drops significantly after the customer has spent 90 minutes in your showroom. We also know that customers are relatively pleased with the salesperson (73% satisfied), and that time is the true killer of satisfaction.

How we reduce time spent in dealership and provide happier experiences has been up for debate. But if there is one thing I have learned over the years it’s this: Doubling down on your strengths is the fastest way to success. 

If people are generally happy with your salespeople, keep them with their sales professional longer.
 

During our onsite observations, salespeople were leaving their customers alone every 20 minutes during the transaction to do a variety of tasks. Every 20 minutes! Not because they want to (although some admitted to doing it intentionally to create the appearance of getting something approved), but because the process you created for your showroom requires it. They must get manager approval for pricing, credit, deal terms, trade valuations, F&I product review and more.

And what were those customers doing while the salesperson was away? Whether that was texting a spouse about their uncertainty, web-rooming your competitor or doing research on 3rd-party sites — they were busy talking themselves off of your deal.

6 out of 10 times customers were re-evaluating the deal.
 

It’s time to take a good look in the sales process mirror and make the changes necessary to keep your customers with their salesperson longer.

Technology exists to remove duplication and reduce time-intensive aspects of the transaction. But training is key, as many of the salespeople observed were reluctant to use the technology available to them.

Don’t let 2019 go by without empowering your sales team to do more. Not only will it increase your customer satisfaction scores, but, if done right, it will also improve your bottom line by taking waste out of the equation.

The cost of not evolving is too high. The dealerships that deliver a great buying experience will undoubtedly earn a disproportionate share of the market. And with new dealer model threats such as Carvana, Carmax, Tesla, etc. nipping at your heels, the time to take action is now. Taxi companies did nothing to streamline the consumer experience with technology and look where they are now — Uber and Lyft are eating them for breakfast.

So, take a step forward and empower your frontline people. The game of telephone was fun as a child but has no place on your showroom floor. Keep salespeople with your customers longer and you’ll create customers for life.

To receive a full copy of the Roadster Time Study report, email insights@roadster.com