Dealers know the value of digital retailing and how effectively it can increase visitor to sales ratio’s and make the showroom process more satisfying and profitable.

Yet the adoption of digital retailing solutions is still fairly low. In fact, we recently surveyed dealers and found that, though dealers understand its value. Most are still reluctant to move financing information online. ½ of surveyed dealers say their process is still manual and paper-based. The question is why?

We also discovered a fair amount of confusion over just what defined the term “digital retailing.” 52% said that it was nothing more than listing inventory across digital channels. On the other end of the scale, 10% thought it to be all-inclusive e-commerce, including arranging the financing, transacting and contracting the sale.

The reality is digital retailing is the cornerstone of a truly integrated virtual showroom that initiates and bridges the consumer’s transaction into your physical showroom. Digital retailing describes the tools that enable consumers to begin parts of the deal online and delivers the three key pieces of information they want most... Click here to read on.

That seems like a pretty easy question. After all, digital retailing has been trending for more than 2 years and is being touted as the next obvious step to bring your dealership more in line with consumer expectations.

It’s all about giving consumers the online tools they need to accelerate intent to then move themselves down the funnel, as well as ensuring online tools are fully integrated and aligned with your showroom sales process.

Digital opportunity

You get digital opportunity. You understand the value, and you see the opportunity for your dealership. But what does it really mean? And how can you make it work?

To best implement digital retailing technologies into your sales and F&I workflow – online and in-store – you really need to have a clear understanding of what it is and how it can fit into your current sales process.

At eLend, we were curious to see how dealers are approaching digital retailing and recently took the pulse of dealers about this very topic.

Our survey garnered some surprising results... Click here to read on.

Next month, Apple is going to do something extraordinary: They will debut the new Apple iPhone 8, along with an assortment of new devices. And while most things in the Apple world are treated with trumpets and red carpets, this time the rumors and leaks indicate that it’s a special moment: The “8” represents a distinct design departure from the existing iPhone. According to Forbes.com, it’s slightly larger than the 7, but smaller than the iPhone 7 Plus, and features a screen that goes edge-to-edge.

So the world will be watching. And that, to me, is the extraordinary part. The idea that Apple can release a phone to worldwide acclaim, and thousands upon thousands of pre-orders…it shows how absolutely critical mobile devices have become, and how we use them for everything we do. In fact, one could say we’re pretty dependent on our devices, on a daily basis. I know mine serves as an alarm, a planner, for social networking…I even use it for phone calls occasionally!

But you know all that. And if you don’t – just think a moment about how you use mobile tech. Are you reading this post on a tablet or smartphone right now? Probably.

CLICK HERE TO READ MORE.

The old photocopying, barcode-scanning and verification calling is powerless against the fake ID epidemic

ID theft is a raging American epidemic: According to the FBI, it has overtaken the drug trade as the most costly U.S. crime. Just consider: more than 267 million consumer records were exposed - and a record 60 million pieces of personal ID - wound up in the hands of identity thieves[1] last year.

And every week, it seems, I hear or read about another case of identity theft or fraud at dealerships. More dealers than ever are reporting that more impeccable-looking criminals are presenting impeccable-looking (fake) IDs for test-drives, and then driving off…or even successfully purchasing vehicles with them (with their associated, impeccable-looking fake checks, credit apps, insurance cards, etc.)

The huge problem is that today’s ID thieves and fake-ID-producers use cutting-edge technology, while the average dealer’s standard verification processes remain in the Dark Ages. So dealers are increasingly powerless against this fast-growing, very costly problem.

The government, of course, mandates that dealerships put in place processes that can help flag identity fraud. About a dozen years ago the FTC launched the Safeguard Rule, and then in 2011 they followed up with the Red Flags Rule. The latter requires that financial institutions and businesses that function as “creditors,” i.e. those that “regularly grant loans, arrange for loans or make credit decisions” – including car dealerships – must implement a written Identity Theft Prevention Program to detect the warning signs of identity theft in their day-to-day operations.

While the FTC doesn’t spell out specific required procedures, they can seek both “monetary civil penalties and injunctive relief for violations” – with the former running to $3,500 per violation.

So, many dealers, with their eye mainly on compliance, set up a Red Flags Program that creates a “look, I tried” paper trail. But the real cost when someone drives away with a vehicle is to the dealer. And what might possibly prove adequate processes to the FTC, isn’t adequate to actually protect against today’s ID scammers at dealerships.

And the cost to dealers is becoming an increasingly expensive, scary problem. More lenders are now requiring dealers to buy back ID-theft-related deals. (More lender contracts include verbiage stating the dealer is responsible for establishing the identity of the buyer, and that they’re responsible for the damages when a car is stolen or bought fraudulently.) So, think about the real cost of just one car obtained with false IDs/documents: with the cost of the vehicle, re-buying the contract and the lawyers fees, it can easily go north of $100,000.

Eyeballing & Endless Calls Don’t Cut It Anymore:

Most dealers’ processes are, as I’ve said, powerless against sophisticated ID-fakers. Every dealer knows the drill: all that cumbersome scrutinizing and photocopying of IDs – all those endless verification calls. Dealers still use barcode scanners, but they can only verify that data is present on a card, not that it’s valid.

Yes, there is a ton of good advice out there from the FTC and in the dealer trades. Dealers are told to do everything from requiring only US IDs – to verifying every license with the DMV, and credit report with the reporting services, and insurance card with the insurance company – to comparing licenses from people out of state with the examples in NADA’s titling guidebook – to taking thumbprints of all customers not personally known – and using identity verification services to spot red flags and to obtain “out of wallet” questions to trip people up.

An article on flagging ID fraud will be called, “30 Things To Do to Spot Identity Fraud.” It’s insanely complex and time-consuming. And with most cars sold on weekends, many of these steps (like calling the DMV and other verifying organizations) happen when those organizations are closed.

And if many of these cumbersome processes may successfully raise flags in an F& I department – what about at the point of test-drive? How many dealerships have I been in on a busy weekend, where there are 100 cars out and photocopied IDs are flung about the dealership…and the whole situation is chaos?

Fight the Criminals’ Technology – With Technology:

Of all the advice I have seen given to dealers, the best is from the FTC, who states: “Businesses with a high risk for identity theft need more robust procedures…like incorporating fraud detection software.”

The technology is here. For instance, a company like AssureTec Technologies, which is the ID scanner technology that’s chosen by hardcore organizations like the Department of Homeland Security, the Department of State, the NYPD and DMVs nationwide, can do things that no dealer eyeballs and due diligence staff ever could:

With a swipe of a license, this technology can:

• Perform 50 complex forensic tests for 2,500+ global ID types…in less than six seconds.
• Extract all biometric and alphanumeric data in the document, and then authenticate it using a document forensics library and detection algorithms.
• Relentlessly examine not only visible ID properties, but also those undetectable to the eye, like: ultraviolet (UV) and near-infrared (NIR) properties, guilloche, optically variable device (OVD) presence, embossing, perforation, retro-reflective laminate background patterns and overlay patterns.

This is the type of potent ID authentication technology that dealers desperately need. And it’s why we recently partnered with AssureTec to create an ID scanner product that powerful for auto dealers – it’s called ID Drive.

But whatever hardware/software solution a dealer uses, the fact is they need to adopt technology – and extreme technology - to fight the fake ID wave. If dealerships made every test-driver – and every person that walks into their store – simply swipe their license/ID at such a state-of-the-art scanner, ID fraud would be radically reduced.

[1] Open Security Foundation data, 2013

The old photocopying, barcode-scanning and verification calling is powerless against the fake ID epidemic

ID theft is a raging American epidemic: According to the FBI, it has overtaken the drug trade as the most costly U.S. crime. Just consider: more than 267 million consumer records were exposed - and a record 60 million pieces of personal ID - wound up in the hands of identity thieves[1] last year.

And every week, it seems, I hear or read about another case of identity theft or fraud at dealerships. More dealers than ever are reporting that more impeccable-looking criminals are presenting impeccable-looking (fake) IDs for test-drives, and then driving off…or even successfully purchasing vehicles with them (with their associated, impeccable-looking fake checks, credit apps, insurance cards, etc.)

The huge problem is that today’s ID thieves and fake-ID-producers use cutting-edge technology, while the average dealer’s standard verification processes remain in the Dark Ages. So dealers are increasingly powerless against this fast-growing, very costly problem.

The government, of course, mandates that dealerships put in place processes that can help flag identity fraud. About a dozen years ago the FTC launched the Safeguard Rule, and then in 2011 they followed up with the Red Flags Rule. The latter requires that financial institutions and businesses that function as “creditors,” i.e. those that “regularly grant loans, arrange for loans or make credit decisions” – including car dealerships – must implement a written Identity Theft Prevention Program to detect the warning signs of identity theft in their day-to-day operations.

While the FTC doesn’t spell out specific required procedures, they can seek both “monetary civil penalties and injunctive relief for violations” – with the former running to $3,500 per violation.

So, many dealers, with their eye mainly on compliance, set up a Red Flags Program that creates a “look, I tried” paper trail. But the real cost when someone drives away with a vehicle is to the dealer. And what might possibly prove adequate processes to the FTC, isn’t adequate to actually protect against today’s ID scammers at dealerships.

And the cost to dealers is becoming an increasingly expensive, scary problem. More lenders are now requiring dealers to buy back ID-theft-related deals. (More lender contracts include verbiage stating the dealer is responsible for establishing the identity of the buyer, and that they’re responsible for the damages when a car is stolen or bought fraudulently.) So, think about the real cost of just one car obtained with false IDs/documents: with the cost of the vehicle, re-buying the contract and the lawyers fees, it can easily go north of $100,000.

Eyeballing & Endless Calls Don’t Cut It Anymore:

Most dealers’ processes are, as I’ve said, powerless against sophisticated ID-fakers. Every dealer knows the drill: all that cumbersome scrutinizing and photocopying of IDs – all those endless verification calls. Dealers still use barcode scanners, but they can only verify that data is present on a card, not that it’s valid.

Yes, there is a ton of good advice out there from the FTC and in the dealer trades. Dealers are told to do everything from requiring only US IDs – to verifying every license with the DMV, and credit report with the reporting services, and insurance card with the insurance company – to comparing licenses from people out of state with the examples in NADA’s titling guidebook – to taking thumbprints of all customers not personally known – and using identity verification services to spot red flags and to obtain “out of wallet” questions to trip people up.

An article on flagging ID fraud will be called, “30 Things To Do to Spot Identity Fraud.” It’s insanely complex and time-consuming. And with most cars sold on weekends, many of these steps (like calling the DMV and other verifying organizations) happen when those organizations are closed.

And if many of these cumbersome processes may successfully raise flags in an F& I department – what about at the point of test-drive? How many dealerships have I been in on a busy weekend, where there are 100 cars out and photocopied IDs are flung about the dealership…and the whole situation is chaos?

Fight the Criminals’ Technology – With Technology:

Of all the advice I have seen given to dealers, the best is from the FTC, who states: “Businesses with a high risk for identity theft need more robust procedures…like incorporating fraud detection software.”

The technology is here. For instance, a company like AssureTec Technologies, which is the ID scanner technology that’s chosen by hardcore organizations like the Department of Homeland Security, the Department of State, the NYPD and DMVs nationwide, can do things that no dealer eyeballs and due diligence staff ever could:

With a swipe of a license, this technology can:

• Perform 50 complex forensic tests for 2,500+ global ID types…in less than six seconds.
• Extract all biometric and alphanumeric data in the document, and then authenticate it using a document forensics library and detection algorithms.
• Relentlessly examine not only visible ID properties, but also those undetectable to the eye, like: ultraviolet (UV) and near-infrared (NIR) properties, guilloche, optically variable device (OVD) presence, embossing, perforation, retro-reflective laminate background patterns and overlay patterns.

This is the type of potent ID authentication technology that dealers desperately need. And it’s why we recently partnered with AssureTec to create an ID scanner product that powerful for auto dealers – it’s called ID Drive.

But whatever hardware/software solution a dealer uses, the fact is they need to adopt technology – and extreme technology - to fight the fake ID wave. If dealerships made every test-driver – and every person that walks into their store – simply swipe their license/ID at such a state-of-the-art scanner, ID fraud would be radically reduced.

[1] Open Security Foundation data, 2013

• 25 percent of mobile users are mobile-only – if information is not optimized for mobile use, consumers will miss it. [2]
• Mobile search now trumps desktop search - in other words, consumers demand their information in a convenient and easily digestible format.[3]
• The time Americans are spending with mobile is growing at 14 times the rate of time spent with desktop/laptop computers (52 percent vs. 4 percent) and it has grown roughly 50 percent annually for the last four years[4].

And, of course, the mobile wave is rewriting the car-buying process:

With the number of smart phones continuing to grow, it is no surprise that mobile phone research now extends to the car buying process. We hear from so many dealer clients that mobile now drives over 50 percent of total traffic to their sites, consumers are not afraid to make decisions based off of mobile phone based research.

In the last year, many dealerships have stepped up their mobile game: creating mobile-friendly websites and engaging in various types of mobile marketing…many even adopting a dealership app.

But one area where most dealers are still lagging is that they don’t have a mobile-optimized consumer credit app strategy. Consumers are researching where to buy their vehicle, but dealers are not equipped to provide financing information to these potential buyers, in the same mobile format – this is a huge missed opportunity.

Highest Quality Leads

With 9 in 10 consumers now shopping online, it’s becoming increasingly difficult for dealers to determine who’s just looking, who’s seriously ready to buy, or whether that shopper is even qualified. When an online/mobile shopper fills out a credit app and puts their personal info online, it’s one loud, clear signal that they’re transitioning from the “just shopping” to the buying cycle. And what more convenient way to convert researchers into buyers than by providing financing in mobile format?

Dealers Are Losing the Preapproved Financing Battle

While the majority of car shoppers now research financing online, 50 percent plan to get preapproved through a bank/credit union and only 34 percent at a dealership.[5] Because most dealers and banks/lenders have a weak mobile credit app presence, they could gain a new advantage -- reaching car buyers where they are increasingly "live"…on their smartphones and tablets.

People Do a Whole Lot of “Stuff” on Their Smartphones

For many smartphone users, their smartphones are an “appendage” that’s with them 24/7. In fact, Americans now spend more than 2.5 hours daily on their smartphones/tablets, nipping at the heels of the time they spend with TV! (168 minutes daily).[6]

Financing Needs to Move to the Front of the Sales Process

Moving auto financing to the front of the sales process is increasingly critical for dealers and their customers, because it can slash the old, frustrating three-hour sales process to under an hour. Web and mobile-optimized credit apps, which, of course, get people preapproved, pre-test-drive, create significant, new efficiencies.

If a dealer wants to get their online credit app mobile-friendly (or they currently have an online credit app presence through lenders or vendors) there are certain key things to execute on:

• Mobile “version” doesn’t mean mobile-optimized: Too many dealers and vendors offer up the same version of their online credit app on mobile. Consumers can technically access the app, but because the experience and interface isn’t mobile-customized, it’s unwieldy and a major headache to fill out. People will simply abandon it. Best practice: an auto mobile detect platform, which means if a consumer is accessing the application through a mobile device the application is automatically formatted to be mobile-friendly.
• Online and mobile credit apps need to engage: more rich, compelling content, like streaming video and calls-to-action, mean more financing apps for your dealership.
• Make it quick, easy, hassle-free, and make them feel secure: Having an initial credit app as long and complex as the Dead Sea Scrolls means they will also abandon it. Keep is simple: gather their name, address, phone number, email address, date of birth, and Social Security number. Then the credit score gets run. Then, if they’re prequalified, ask for more details like income and residence info. Messaging about how their personal info is 100 percent secure needs to be prominent throughout the experience.
• Many online and mobile credit apps are for direct loans, and for an amount, rather than for indirect loans or those tied to a specific vehicle in a dealer’s inventory. Only apps for indirect loans ensure that a dealer gets that share of the interest income, the dealer reserve. Apps for indirect loans, and ones for a vehicle rather than an amount, are where the profits lie.
• In general, any online/mobile credit app that pre-approves auto shoppers for financing should be based on your dealership’s credit criteria.

Consumers have spoken, and the verdict is that convenient, mobile based information wins. Given the staggering growth in mobile adoption and time-spent-with-mobile, dealers using these golden rules for mobile credit applications should see their credit apps grow exponentially. And anyone serious about driving the highest-quality leads at a low cost needs to get serious about a mobile credit app strategy now.

Pete MacInnis, founder/chairman/CEO of DealerCentric has 34 years experience in automotive finance, including co-founding Onyx Acceptance which originated over $14 billion in auto loans, and was acquired by Capital One. He began his career with WFS Financial, helping grow the company from $100 million in assets to over $4 billion serviced. At DealerCentric, Pete oversees the creation of a more streamlined sales and financing experiences for the industry, including Mobile Get Pre-approved in Seconds.

[1] Pew Research Center, 2013

[2] MobiThinking data, 2012

[3] Google data, 2012

[4] eMarketer, 2012

[5] Kelly Blue book survey

[6] Flurry Analytics report, 2013

• 25 percent of mobile users are mobile-only – if information is not optimized for mobile use, consumers will miss it. [2]
• Mobile search now trumps desktop search - in other words, consumers demand their information in a convenient and easily digestible format.[3]
• The time Americans are spending with mobile is growing at 14 times the rate of time spent with desktop/laptop computers (52 percent vs. 4 percent) and it has grown roughly 50 percent annually for the last four years[4].

And, of course, the mobile wave is rewriting the car-buying process:

With the number of smart phones continuing to grow, it is no surprise that mobile phone research now extends to the car buying process. We hear from so many dealer clients that mobile now drives over 50 percent of total traffic to their sites, consumers are not afraid to make decisions based off of mobile phone based research.

In the last year, many dealerships have stepped up their mobile game: creating mobile-friendly websites and engaging in various types of mobile marketing…many even adopting a dealership app.

But one area where most dealers are still lagging is that they don’t have a mobile-optimized consumer credit app strategy. Consumers are researching where to buy their vehicle, but dealers are not equipped to provide financing information to these potential buyers, in the same mobile format – this is a huge missed opportunity.

Highest Quality Leads

With 9 in 10 consumers now shopping online, it’s becoming increasingly difficult for dealers to determine who’s just looking, who’s seriously ready to buy, or whether that shopper is even qualified. When an online/mobile shopper fills out a credit app and puts their personal info online, it’s one loud, clear signal that they’re transitioning from the “just shopping” to the buying cycle. And what more convenient way to convert researchers into buyers than by providing financing in mobile format?

Dealers Are Losing the Preapproved Financing Battle

While the majority of car shoppers now research financing online, 50 percent plan to get preapproved through a bank/credit union and only 34 percent at a dealership.[5] Because most dealers and banks/lenders have a weak mobile credit app presence, they could gain a new advantage -- reaching car buyers where they are increasingly "live"…on their smartphones and tablets.

People Do a Whole Lot of “Stuff” on Their Smartphones

For many smartphone users, their smartphones are an “appendage” that’s with them 24/7. In fact, Americans now spend more than 2.5 hours daily on their smartphones/tablets, nipping at the heels of the time they spend with TV! (168 minutes daily).[6]

Financing Needs to Move to the Front of the Sales Process

Moving auto financing to the front of the sales process is increasingly critical for dealers and their customers, because it can slash the old, frustrating three-hour sales process to under an hour. Web and mobile-optimized credit apps, which, of course, get people preapproved, pre-test-drive, create significant, new efficiencies.

If a dealer wants to get their online credit app mobile-friendly (or they currently have an online credit app presence through lenders or vendors) there are certain key things to execute on:

• Mobile “version” doesn’t mean mobile-optimized: Too many dealers and vendors offer up the same version of their online credit app on mobile. Consumers can technically access the app, but because the experience and interface isn’t mobile-customized, it’s unwieldy and a major headache to fill out. People will simply abandon it. Best practice: an auto mobile detect platform, which means if a consumer is accessing the application through a mobile device the application is automatically formatted to be mobile-friendly.
• Online and mobile credit apps need to engage: more rich, compelling content, like streaming video and calls-to-action, mean more financing apps for your dealership.
• Make it quick, easy, hassle-free, and make them feel secure: Having an initial credit app as long and complex as the Dead Sea Scrolls means they will also abandon it. Keep is simple: gather their name, address, phone number, email address, date of birth, and Social Security number. Then the credit score gets run. Then, if they’re prequalified, ask for more details like income and residence info. Messaging about how their personal info is 100 percent secure needs to be prominent throughout the experience.
• Many online and mobile credit apps are for direct loans, and for an amount, rather than for indirect loans or those tied to a specific vehicle in a dealer’s inventory. Only apps for indirect loans ensure that a dealer gets that share of the interest income, the dealer reserve. Apps for indirect loans, and ones for a vehicle rather than an amount, are where the profits lie.
• In general, any online/mobile credit app that pre-approves auto shoppers for financing should be based on your dealership’s credit criteria.

Consumers have spoken, and the verdict is that convenient, mobile based information wins. Given the staggering growth in mobile adoption and time-spent-with-mobile, dealers using these golden rules for mobile credit applications should see their credit apps grow exponentially. And anyone serious about driving the highest-quality leads at a low cost needs to get serious about a mobile credit app strategy now.

Pete MacInnis, founder/chairman/CEO of DealerCentric has 34 years experience in automotive finance, including co-founding Onyx Acceptance which originated over $14 billion in auto loans, and was acquired by Capital One. He began his career with WFS Financial, helping grow the company from $100 million in assets to over $4 billion serviced. At DealerCentric, Pete oversees the creation of a more streamlined sales and financing experiences for the industry, including Mobile Get Pre-approved in Seconds.

[1] Pew Research Center, 2013

[2] MobiThinking data, 2012

[3] Google data, 2012

[4] eMarketer, 2012

[5] Kelly Blue book survey

[6] Flurry Analytics report, 2013