I read an interesting study recently in MarketingWeek.com. It found that while marketers believe in the importance of the customer experience, within 2-3 years, that importance will decline due to business growth, transformation, and disruptive technologies.

According to the study, 83% of businesses reported that the customer experience was important. But just 49% of those same respondents felt that they were, in fact, delivering the right customer experience. These businesses have shifted (or plan to move) their focus AWAY from customer experience; instead, placing a higher priority on brand management, business transformation, and leading disruptive innovation. 

The ironic part is that all of those priority shifts are subsets of customer experience. Think about it. How do you improve your customer experience? You put a plan in place to change your business and enhance the customer experience by using leading technological innovation!

Customers are all about convenience. That is precisely how some companies have come to dominate retail. But how did they accomplish that? By doing exactly what these CMOs are predicting their focus will shift to.

The goal of improving customer experience includes a business transformation. You cannot keep doing what you always have done and expect consumers to respond more favorably. This means adopting new (and potentially disruptive) technology to achieve that. The amusing part is that the technology is only "disruptive" until mass adoption occurs.

The automotive industry has undergone this change countless times in the past. There was a time when dealers didn’t think that they needed websites. That changed. Then dealerships didn’t want leads. That also changed. I could go on. But the fact is that all of these changes – websites, leads, etc. -- were due to consumer demand. To accommodate that demand, dealerships needed to change. And that's what they did.

In my opinion, the CMOS of the companies covered in this study are absolutely on target when it comes to what they should be focused on for the next 2-3 years. What I would argue is that while the research reports they are shifting away from a customer experience focus, the items they are focused on do in fact lead to a better customer experience. This, in turn, makes it easier for consumers to spend their money with that business.

Don’t lose focus on the ultimate goal of improving your customer experience. While these shifts may, on the surface, seem like a shift AWAY from that end goal; ultimately, they are simply cogs in the wheel that will make things more efficiently and improve that experience. 

Yes, focusing on the pieces that are needed to complete a puzzle is essential. You should never take your eyes off the end goal of a completed puzzle. That is the only outcome which makes sense and will increase business.

Conversations about digital retailing in the automotive industry tend to center around two things: customer experience and an increase in sales volume. But some dealers feel that it just leads to decreased margins on the front-end in the “race to the bottom,|” and that face-to-face interaction will end in more revenue – whether that's in the front or the back end.

With this blog, I'd like to concentrate on F&I and why you don’t need to fear a loss of F&I revenue in the digital retailing process.

I often hear from dealers that they don’t want technology to force their stores to become like McDonald’s, where employees simply take orders, and I don't disagree! However, there is much to be said in favor of using technology to help remove friction from the sales process and allowing consumers to make their own decisions. According to a recent article, this can, in fact, lead to increased spending.

Remember when the thought of having your inventory online was crazy? Now, you wouldn’t be competitive without it being there. Today, the majority of customers start their car shopping online, and that number increases every year. Why? Because the information sources available continue to grow.

It is hard to believe that customers don’t want more information about F&I products before coming into the store, just as they research various vehicle options before they arrive for a test drive. Imagine being the dealer that allows consumers to go online to learn more about your F&I products, to see what products you offer; read about them, and even watch a video explaining each one. That would be a pretty unique value proposition and certainly a differentiator in a highly competitive market that screams the need to be different.

Customers have migrated online because they can shop at their leisure and in a manner that is convenient to them. If you put them into a high-pressure sales environment (such as some F&I offices), it can cause discomfort, and they tend to buy less because they don’t understand the products and are uncomfortable.

By providing your customers with the information about F&I products up front on your site, they are then better educated when they arrive and less likely to show resistance when they go into F&I, which could translate into higher revenue.

In a recent article in Automotive News, Cox Automotive COO Mark O’Neill talked about how F&I offerings should be presented in a way similar to online retailer Amazon's approach. For example, a buyer of a Cadillac Escalade should be able to see F&I products with captions such as "62 percent of Escalade buyers bought this product."

"We would use techniques that customers are very comfortable with, and very used to in other retail shopping experiences online, to present F&I products," O'Neil said. "And the early cases where we've done that in the store with iPads have been very successful in terms of customers taking the time to watch the video and opt-in as opposed to being sold."

Either you tell your customers about your F&I products, or their credit union or finance company will. And that is how you lose F&I revenue. So, don’t make it hard for customers to learn about F&I products before they come in but rather be transparent and allow them to learn on their own. Or you can risk losing that revenue to the fierce aftermarket competition.

It’s time for F&I to enter the realm of digital retailing. 

The Seamless online to in-store sales platform for auto dealers enjoys sustained growth due to the addition of several large dealer groups and a relationship with a leading OEM

SAN FRANCISCO, CA –July 15, 2019- — Prodigy, a unique, seamless online to in-store sales platform for automotive dealerships, today announced that to help keep up with its sustained growth, it has expanded into new offices in San Francisco, CA. The larger office space will enable the company to further improve service for its auto dealer clients while expanding future product research and development capabilities. Prodigy recently added several large dealer groups and is also one of the digital retailing vendors recently certified for the Toyota Dealer Digital Solutions Certified Website Program, which began in March. The program is designed to better meet dealer needs while simultaneously focusing on evolving consumer behaviors and expectations. The new office address is:

211 Sutter Street

Suite 200

San Francisco, CA 94108

Prodigy’s patent-pending SaaS platform was designed to enable a seamless transition from online to in-store sales and vice versa by allowing dealers to engage their customers both online and in-store, delivering a consistent, modern experience with one platform. It boosts profits, builds trust, and reduces sales turnover.

According to Michia Rohrssen, Prodigy CEO, the way people shop has evolved, but the tools that dealerships use to interact with customers has remained the same for almost two decades. Prodigy is changing that. “We enable our dealers to deliver a seamless, engaging experience for their shoppers. When an online shopper visits one of our dealer’s websites, they can browse and compare available vehicles, but they can also act; get insight into discounts and sales, calculate loan options, apply for financing or pick a protection plan. Shoppers can even complete a transaction and schedule pickup or delivery immediately," said Rohrssen. "Most shoppers still want to see the vehicle in person, and our platform allows them to pick up right where they left off as we provide the dealer will all the actions the shopper has taken up to that point.”

The platform has been rigorously engineered and tuned to the specific needs of auto dealerships seeking a next-generation solution that enhances all aspects of the customer experience. Prodigy enables online, instore or a bidirectional blend of sales between the two and ensures process management compliance, full lender/factory/credit bureau integration and a range of sales experience enhancements such as on-lot driver license scanning for instant drive tests. The platform fully integrates with all legacy systems and dealer-specific software.

New additions to the platform enable salespeople to place more focus on the customer rather than administrative work, which helps to decrease the time it takes to sell a car by around 45 minutes or more. Predictive inventory filters automatically narrow down cars based on the customer’s expectations, and built-in communication tools allow salespeople to instantly get answers from managers on essential questions, including whether they can offer a discount to close the deal.

“Prodigy works with the dealer’s existing software and sales process, so their team can embrace digital retail without extensive retraining or switching software costs. Seamless integrations mean our average dealer sells over 30 cars with Prodigy in their first week alone,” Rohrssen stated.

For more information, or to schedule a demo, visit, https://getprodigy.com/. Alternatively, call 1-833-DEALER5 (1-833-332-5375).

About Prodigy:

For more information visit, https://getprodigy.com/

It’s a well-known fact that Amazon is on a mission to reinvent the traditional brick-and-mortar store model. Until recently, they were mostly focused on dominating online sales. However, it is clear Amazon is now looking to expand its footprint to include offline sales. A great example is the $13.7 BILLION acquisition of grocery store chain Whole Foods in 2017. 

Amazon cleared approximately $258.22 billion in US retail sales in 2018, according to eMarketer’s figures. That is 49.1% of all online retail spend in the country, and 5% of all retail sales.

Let that sink in. Almost half of all online retail purchases are made via Amazon. And they aren’t done. They are now attacking the fact that they have just 5% of ALL retail sales by increasing their offline presence with the addition of traditional stores where customers can touch and feel a product.

This is an interesting trend as, in the automotive industry, only around 3% of consumers complete the entire transaction from start to finish online. The majority of car shoppers will complete as much of the process online that they feel comfortable with -- then come into the store and finish the transaction. The most successful auto dealers are set up to allow customers to buy vehicles the way the shopper wishes to do it – both online and in the store.

Amazon is doing the same thing.

In my opinion, there are a couple of strategies Amazon is focused on to help propel the company towards higher market share in the online and offline retail market.

1.   Adopting a Showroom Model – Many consumers still want to touch and feel a product before they buy it. Amazon is answering this need by adding a showroom model with its increasing footprint of brick and mortar retail stores.

They are also using technology in store to full advantage to help improve the customer experience and drive the purchase decision. With the Amazon app, you can scan the bar code of an item and immediately view its price – while you’re in the store.

And then there are the Amazon Go stores which are rolling out. We have one near our office here in San Francisco, and it’s an incredible experience. You simply walk in, pick out what you want to purchase and then walk right out! Your credit card is charged automatically. Nothing else required. In fact, we had several OEM reps visiting our office last week who specifically asked us to take them to an Amazon Go store so they could see firsthand what Amazon is bringing to retail. They were completely blown away by the experience!

I bet that Amazon will do well with this model and blow its competition out of the water. Just watch – people will be surprised and upset at how ruthlessly it drives out other brick and mortar stores.  

2.   Customer Experience – Amazon has really mastered the art of the customer experience and continues to come up with innovative ways to put the customer first, removing friction from the buying process. In fact, one-third of the population of the United States are now Amazon Prime members, as of January 2019.

With same day delivery and a simple return process, Amazon continually meets consumer needs. In most recent news Amazon partnered with the retail chain Kohl’s to enable consumers to return items purchased on Amazon without going through the hassle of packaging up and shipping the item back to them for a refund. This is mutually beneficial to Kohl’s and Amazon.

Kohl’s, however, may well be that fish that eats the algae in your fish tank -- they are banking on the fact that consumers with Amazon returns will also spend money at their store, while Amazon is further greasing the wheels of its customer experience. Only time will tell who benefits most -- but I bet that it will be Amazon. 

Amazon’s rise to dominance is in no way a mistake. Everything they have done is intentional and based on the following facts: Consumers want transparent pricing, they are impatient and want the items as soon as possible. And, if they aren’t happy with the items purchased, they want an easy return process.

Amazon’s strategy has enticed 100 million people in the United States to PAY THEM for these services. To the point that people will pay more for the simple convenience of shopping on Amazon rather than taking a trip to Walmart or Target where they could get the item cheaper; I have done it myself!

Investing in customer experience and providing a seamless transaction has merely increased their gross margins – not lessened them – which is the fear of some dealerships I talk to.

Perhaps it is time to take a lesson from the most successful online retailer in existence and provide consumers the experience that they want when they purchase a vehicle. My money is on Amazon’s strategy. Dealers that provide a seamless customer experience will prosper. While those that don’t could well lose market share.

While the components of digital retailing have existed within our industry for some time, digital retailing as a concept has not. Indeed, dealers could sell a vehicle entirely online in the past. And many have done so. But they’ve done so by cobbling together a less than perfect experience for the customer involving multiple widgets, phone calls, emails, and information –nonetheless, they did succeed to some degree.

In my opinion, digital retailing is a buzzword today for two simple reasons. First, most major retailers have adopted technology that enables customers to transact with them via the consumer’s preferred method – one that is easy, effortless and, frequently, without them having to leave their house. This increasing trend is a direct catalyst for the second reason digital retailing is a “hot” term today: While car dealers have offered consumers some components of digital retailing for years now, few of these actually lead the customer down any clear path that got them closer to the sale. Today, technology offers a new/novel way to combine all elements into a sophisticated package that is greater than the sum of its parts and therefore is new.

In my last blog, I share the most critical metric to measure a dealership’s digital retailing consumer experience – engagement. The reason engagement is the best metric to determine success is quite simple. Your customers will tell you to what degree and how far they feel comfortable taking the transaction in a purely digital realm before they stop and come into the store to complete the purchase.

The problem is that the current mishmash of digital retailing components and widgets dealers have today create a disconnectedness. This inhibits higher digital retailing success rates as follows:

1. CTA Overload – Multiple widgets mean a ton of CTAs Just as in any maze, it is possible to offer TOO many entrances with a plethora of widgets placed all over the website hoping that at least ONE of these will bring the dealership a lead. And, for the most part, these widgets are not connected with each other. So, a customer may go into one just to be presented with a dead end, forced to return to the beginning to find a new entrance to the maze… or leave and never try again.

Too many CTAs confuse customers. If those CTAs don’t all lead towards the same pathway which brings them closer to a transaction, they won’t stay around long. Best strategy? Ensure you don’t overload visiting customers with CTAs and remove any redundant CTAs from your website as they are just slowing it down. Any you do offer should all be connected and work together to guide the customer closer to their goal (and yours) of purchasing a vehicle.

2. Position and Placement of CTA buttons –. Are your dealership’s CTAs in appropriate places on your website? In other words, do they make sense in a conversion strategy? It’s one thing to offer many different ways to START the customer on the journey. However, once started, is there a clear path to reward?

First, the “button” that leads to digital retail is probably the most clicked button on your VDP and should be visible above the fold on the VDP; ideally, the largest button on the page. Then, the best way to increase your digital retailing success is to ensure that all funnel entrances lead customers along the same pathway. While there may be many ways into the maze, it is best to offer something akin to a guided tour from whichever entrance the customer chooses, all of the way through to the end of the maze.

3. Dealership Operations – Last, but absolutely not least, all of these digital conveniences offered to your customers must be tightly interwoven into your dealership’s operational strategy and processes. There is nothing more frustrating for a consumer attempting to purchase something than to have to complete the same tasks repeatedly.

Digital retailing isn’t necessarily supposed to replace the traditional buying experience, it should merely enhance it for those consumers that want to get some of the heavy lifting out of the way.

Of course, a well-designed digital retailing platform could enable a customer to complete the entire transaction online. But, at least for now, in the automotive industry, we’re talking somewhere around just 2% of customers who actually complete the entire purchase all the way online. So, the best strategy is to let the customer do as much as they want to online. THEN ensure that when that customer does come into the store, they do not have to repeat any part of the research and sale cycle that they have already done.

In the automotive industry, digital retailing is perceived by many as a way for consumers to complete everything from start to finish online. This, however, is inaccurate. With 98% of car shoppers choosing to complete the transaction in-store, the best way to view digital retailing is as a way to make the car shopping experience more manageable and less time-consuming for your customers.

The majority of car shoppers will complete as much of the process online that they feel comfortable with — then come in. The trick is to ensure that each and every customer is taken down the same pathway, that the steps are clear and easy to understand and that, when they abandon the online processes and come in, whatever they completed online is preserved and available in store – in its entirety. The customer should just experience a smooth and seamless online to instore transition, rather than wasting a bunch of time online for nothing.

This is what digital retailing is REALLY all about and how it will increase your dealership’s sales revenue. By deploying a digital retailing “solution,” rather than a bunch of unconnected digital retailing “components,” dealers will end up with fat bank accounts and happy customers

If you haven't heard already, Tesla was in a world of hurt after reporting its Quarter 1 sales. In fact, the pain was so great that some could say it almost became the Titanic with a series of unfortunate events including sales reported lower than expected, missed essential tax credits and Elon Musk was forced to appear in front of the SEC as he was unable to keep his (Twitter) mouth closed.

Tesla sales fell 61% in the United States and 31% worldwide resulting in an 8% drop in stock price. While that may not sound like a lot, that effectively reduces Tesla’s market cap by $17 billion! That’s nothing to shake an iceberg at!

You do have to give Elon Musk some credit though. While his changing behavior puzzles and angers many, he’s also widely regarded as a visionary and a genius. But, while his cars are beautiful, innovative works of art, it seems he can’t get his fundamentals in place to solve the problem of auto manufacturing and sales at a scale that meets promises he has made and keeps up with consumer demand.

It doesn’t matter how great the vehicle is if Tesla can't deliver it. Also, cars need to be serviced and, while Tesla seems to be working to make that easier, it just can't effectively handle sales and service with the limited number of locations it has. There is a reason why Toyota and other major brands are so successful … because they are accessible!  With a Ford dealership every 3 miles, consumers find it really easy to buy and service their Ford vehicles. In fact, Ford has about  3,000 dealerships in the United States alone!

Do you know how many Tesla has?

Eighty in the United States.

While Elon Musk tries to reinvent the retail vehicle sales system, it looks more like his sales (and stock) have taken a ride to Mars on SpaceX.

Almost all of Tesla’s sales are online. Customers can touch and feel a car in a gallery -- but not THEIR vehicle. Anyone that sells cars knows that the getting the customer to take mental ownership of a car is the whole point of a test drive and, by tapping that emotion, it becomes much easier to close the sale.

But Tesla can’t do that. Why? Because Elon Musk is busy fighting with state auto dealer associations and legislators so he can have his direct-to-consumer model. Meanwhile, vehicle manufacturing and sales are suffering.

Perhaps it is time for Tesla to reconsider its strategy. Vehicle franchises have been around for decades and are likely to continue for a long time yet. Tesla has undoubtedly created and adopted some cutting-edge technologies, including over-the-air updates, and their cars certainly have sex appeal. The company has also made the process of BUYING a car online a breeze (even though it can’t necessarily deliver one on time.)

Perhaps if Elon Musk were to adopt a franchise model, he could put the legal woes, battles, sales issues and, potentially even manufacturing issues behind him. And, here's a thought, maybe this could be made even simpler if he partnered with an existing manufacturer that has an established quality manufacturing infrastructure.

In my opinion, that is how Elon Musk and Tesla can break away from the iceberg and continue their journey. Failing to do so just means that "all aboard" are bailing water to stay afloat.

And we all know how that story ends. I’m sure we’ll read all about it on Twitter!

For dealers, the digital retail space is filled with more hype than ever. Digital retail companies promise a future with increased conversion rates, higher gross margins, and better customer experience to boot.

And the truth is…it works! Digital retail can do all of those things and more. But there’s another truth most vendors won’t tell you. What really matters is not IF the conversion rate increases for customers that use digital retail, but how many customers per month actually use your digital retail platform.

Can you really say digital retail is delivering and moving the needle at your dealership if less than 5% of your customers even use your digital retail platform? Put another way, is digital retail really making a difference if you only sell one car per month through it?

I’d argue it’s not.

The sad reality is that most vendors today are so focused on proving their platform, they ignore the impact it ultimately has for the dealer.

If digital retail is going to make a difference, then it should make every sale at your dealership more efficient. Not just 5% or even 10% of sales.

This is why engagement is the single most important metric you can track for digital retail. Engagement not only tells you if your platform is working but highlights if enough customers are working with your platform to move the bottom line.

It’s easy to calculate too!

Number of cars sold that touched a digital retail platform (online or in store) divided by the total number of cars sold = Engagement Rate

Example: 30 customers worked their deal through digital retail out of 150 total cars sold = 20% engagement

It's a simple formula with simple criteria for success: The more customers that engage with your digital retail platform, the better.

So next time you’re evaluating your digital retail platform, make sure you look at the engagement! If you really want to understand your success, it cannot be ignored.

In my next blog, I'll talk about what factors affect digital retail engagement and outline clear steps for how you can improve your digital retail success without switching platforms or vendors.

Of course, if you are interested in switching to a new digital retail platform, we can always have that talk too.

Just about every technology company in the automotive space is working hard to produce pieces of the digital retailing puzzle to facilitate a better customer experience. But many are focused solely on crafting a solution that allows the customer to complete the car-buying transaction online -- from start to finish.

Dealerships should certainly offer such an experience. However, only a small percentage of customers are ready for this. In fact, while 83% say they want to START their car-buying journey online, 89% say they want to FINISH it at the dealership, according to Cox’s Future of Digital Retail Study. The problem is that most of the industry is concentrated on that 11% who are ready to complete the entire process online, rather than the 89% who are not yet prepared for a fully online transaction.

The two most significant objections I hear from dealers about digital retailing are first, the loss of control and second, that they don't believe customers are going to purchase a vehicle that way. The reality is that digital retailing must be designed to allow the customer to complete as much or as little of the transaction online as they desire. When they decide they want to finish the remainder of the deal at the dealership, the customer should be able to pick up where they left off. In this way, sales transactions become more efficient, and customer experience improves. The in-store experience is still an essential part of the process and must match the customer’s online experience. Both must be integrated.

When the customer completes one or more steps online then arrives at the dealership only to find that they have to start at the beginning, from their viewpoint, everything they've done prior was a waste of time. They will go into the whole sales transaction annoyed, which sets up barriers to the sales cycle.

If you have a trade-in widget on your site which provides the customer with a trade-in value, be sure to have a record of that when the customer shows up at the dealership. The same applies to any digital retailing widget. If you really boil down the purpose of all widgets, they are designed to allow the customer to gain information from you.

What really matters here is that too many customers start the process online and then walk into the store to a miserable experience. The disconnect which happens all too often is as follows: the customer gets the information from the dealer’s website, shows up at the dealership and is presented with entirely different information. Or the dealership has no record at all of the information previously given to the customer. But it was via the dealership’s own website! How do you think that customer feels? I bet that they are not happy.

The failure in the digital retail experience is when a person fills out the form for a test drive, arrives at the dealership and no one knows who they are or why they are there. In an ideal world, upon arrival, their vehicle would be sitting out front, washed and ready and a greeter would welcome them by name.

The in-store and online experience are equally important. Not only that, but the two should be seamless for the customer, otherwise, why bother? The customer will be upset, the sale will contain more conflict, and everyone will have to work harder to complete it… if it gets completed at all.

As the majority of consumers still complete their car buying in store, the focus shouldn’t just be on getting customers to complete the entire transaction online, but rather on providing tools that allow a customer to complete as much of the purchase online as they desire, then seamlessly morphing that transaction into the store when the customer arrives.

It’s time to take an inside out view of digital retailing -- you can't just expect a widget to do it all. It starts in store with a different mindset and a commitment to removing friction from the buying process for all customers, online and in-store.