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.

It dawned on me the other day that there sure are a lot of people telling dealers what to do.

In fact, it’s pretty much the same message all the time: Get more efficient! Speed up the sales process! Car buyers don’t want to go through a 3-hour ordeal just to buy a car! Make them wait and your CSI will crash!

Or how about this expectation: People want an Amazon or Apple buying experience when buying a car.

The point is pretty much the same: Car buyers want a simplified process that they are more familiar with. They want to spend less time at the dealership. They want to accomplish more upfront before ever stepping into the store. They expect that if much of the transaction can be completed prior to their visit to the dealership, their time at the showroom will be reduced.

Not surprisingly, according to a Cox Automotive study, less than 1% of consumers like the sales process as it is today.

This is something dealers know all too well. Why? Customers tell them every day.

Dealership teams aren’t oblivious to the fact that a change is needed. In fact, we fielded a survey just recently that found that 90% of dealers want an under 2-hour sales process. Of course, wanting and doing are two different things: only 47% of dealers reported they were able to achieve under 2-hour transactions.

It takes time, cooperation, and commitment to evolve from the “old way” to a process that leverages technologies and a ‘customer first’ experience. Progress is being made, CSI is improving, but it takes time.  CLICK HERE TO READ ON

New Report: Auto Dealers Consider Themselves Progressive/Willing to Adopt Digital Retailing, But Actual Digital Adoption Lags

eLEND Solutions Digital Retailing Survey reveals disconnects between what dealers say and what they do regarding digital retailing.  And there is confusion about what digital retailing actually is: majority define it as posting inventory online.

Foothill Ranch, CA –October 25, 2017 – A new auto dealership survey from eLEND Solutions offers a good news/bad news scenario for the future of digital retailing: dealers overwhelmingly say they are progressive and willing to adopt more digital retailing tools (84%), yet the majority define digital retailing as posting inventory and report that over 50% of their process continues to be manual/paper-based.

The snapshot survey, conducted among dealerships nationwide in August 2017, clearly illustrates that dealers are interested in a progressive, customer-focused, digital approach to retailing.   For example, dealers overwhelmingly agreed with the statement: “Sell the car the way the customer wants to buy it by letting shoppers start and stop when & where they want. Online or in-store.” but the actual process/tools implementation lags significantly behind this progressive intent. 

The dealerships surveyed cite customer service as their key dealership differentiator and believe a digital retail strategy is key to the shorter transaction times that they aspire to (90% want it to be under two hours but less than half are achieving that).

“One thing that remains consistent over the years, as we survey dealerships, is the disconnect between the progressive, streamlined digital process dealers say they want to offer and their ability to deliver it,’ said Pete MacInnis, CEO of eLEND Solutions. 

 “Customers’ expectations are passing beyond dealerships’ ability to deliver on those expectations,” continued MacInnis. “While this is, in part, attributable to slow adoption of new tools, entrenched legacy processes and the inherent complexity of car financing and purchasing, a key culprit is our industry’s inability to deliver a consistent, end-to-end digital retailing solution -- and one that is not cobbled together from multiple vendors. The dealership ‘will’ is there – they overwhelmingly want a solution that connects the online and offline dots – but the ‘wherefore’ has yet to arrive. The good news is that the solution is definitely on its way.”

Key Highlights from the Digital Retailing Survey:

• Customer service was cited as the top dealership differentiator
• 68% say the top benefit of digital retailing is shorter transaction times
• Dealerships overwhelmingly agree with the idea that their website operates as a ‘digital’ showroom (93%), but most define digital retailing as listing inventory versus actually allowing more of the deal to be initiated online or in-store app/web based smartphone/tablet technologies.

• While 84% plan to adopt more digital retailing tools, the majority (70%) are opting for an incremental approach.
• Reluctance to change and cost are cited as top barriers to adopting more tools – good news is that less than 20% are opposed to adoption.
• Online digital retailing tools connected with the in-store sales process was the top choice for nearly 70% of dealers.
• 60% say that if they could add more tools to make their websites more transactional, they would.

About eLEND Solutions
eLEND Solutions is a privately held automotive technology company specializing in online and in-store credit, finance and ‘deal making’ solutions designed to create a more efficient, faster moving Sales and F&I workflow that helps dealers sell more cars in less time, improve profitability and increase customer satisfaction.  For more information, visit www.elendsolutions.com.

Contact: 
Media Relations 
Melanie Webber, mWEBB Communications, (424) 603-4340, melanie@mwebbcom.com 
Crystal Hartwell, mWEBB Communications, (714) 987-1016, crystal@mwebbcom.com

There are few absolutes when it comes to the business of selling cars — which is a little amazing, right?

Most dealerships work hard to define an optimized path to success, one that starts the moment a car buyer sets an appointment or walks into the showroom. Yet even though there’s this clear and organized process, each and every deal takes on a life of its own, with hidden rabbit holes, unexpected wins, and more.  

You may be familiar with the unrealistic credit-challenged customer wanting too much car? The customer who can’t afford a bigger down payment?  Or perhaps the upside-down trade?

The fact is, with today’s information and technology-empowered consumer, automotive retail is more unpredictable than ever.

Dealerships today must take the following 3 proven behaviors into account when designing the most profitable route from shopper to buyer.. To read on click here.

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.

A couple month’s ago, I posted a blog that got the DrivingSales community talking about how financing and the entire, old-school, 4 square process could be moved online. The argument being – this is what consumers want so what’s stopping us from giving it to them?

Since then, we've had a deeper conversation with dealers about whether or not they are ready for a connected car-selling process. And the answer was a resounding “Yes!”

Eighty percent of dealers we talked to agreed that connecting the online and in-store experience will help them sell more cars fasters. This is good news for everyone – especially consumers, 99% of who start their purchasing journey expecting it to be hassle, according to a recent DrivingSales.com study.

Thanks in large part to the transparency offered by online shopping, consumer expectations have made the traditional 4 square process obsolete. Instead, car shoppers are seeking out a pleasurable experience – and are even willing to pay more for it: a recent AutoTrader study found that customer satisfaction trumps pricing: 54% of consumers would rather buy from a dealership that offers their preferred shopping experience over one that offers the lowest price.

Another upside of connecting online and in-store processes is that transparency finally becomes a two-way street – because, by bringing financing (prequalification not just pre-screening) online, dealers will have key information before the customer walks in the door. Right now, it’s the online consumer that has a leg up on the dealer in terms of pricing and competitive information.

The vast majority of dealers (95%) we spoke to agreed that the industry should strive to create an, easy, streamlined buying experience by starting both sales and financing online. They believe it will help sell more cars faster and lead to greater customer satisfaction -- and nearly 70% of dealerships say this is a goal for their dealership.

Now that online financing (actual credit approvals with real payment terms) is becoming a reality, let’s give consumers a car buying process they can love – making the in-store experience much shorter and much sweeter.

There’s got to be a better way to sell a car. Everyone seems to think so.  In our recent dealer survey, 8 in 10 dealers agreed the time it takes to buy a car ought to take two hours or less but most say the average transaction time today is 3-4 hours from meet & greet to funded. The clear majority of these same dealers say that the biggest opportunity for change is to capture more information from the customer earlier in the process.

With the endless eCommerce sites available today, empowered ‘electronic’ shoppers have come to expect the transparency and immediate gratification made possible by the internet. It’s difficult for them to understand why buying a car still has to take so long. Most car shoppers today want to know what their payment terms will be while deciding on a vehicle, so it's completely illogical that dealerships make it virtually impossible for car shoppers to find financing information online. 

Dealers should want to provide an easy, seamless experience for their customers that starts online because that’s where they’re making their decision to buy the vehicle. A connected buying experience that seamlessly moves the customer from the Internet to the showroom to F&I is quickly becoming possible.  With new technologies, financing no longer needs to be arranged exclusively as an in-store activity. 

Traditional online credit apps were a first step in that direction.   The next generation of interactive online credit apps will offer actual credit approvals with real, exact payment terms from your lender programs - made visible to you and your customers in seconds.   With no credit application to be completed in-store and no lender decision to wait on – your customer is transitioned from the meet & greet to the test drive to negotiation to F&I much quicker.  You’re selling more cars and, because time is money, profitability surges and CSI soars.

We know most consumers are doing their shopping and making their decision to buy online so why not give them a seamless shopping experience from start to finish?

The auto retailing world is currently consumed by the CFPB’s threats to unleash new regulations aimed at curbing potential discriminatory lending practices – and reduce or eliminate dealer participation in the finance contract process. The saber rattling from every side just gets LOUDER. On the dealer front, there is understandably much emotion, but the focus has narrowly been on what will happen to the money, money, money - with no discussion of what the elimination of dealer reserve would logically mean for the current sales and financing process.

No matter what transpires, it’s always good to think things through. Dealers and lenders need to be prepared, given that legal analysts - even for major dealership magazines -have included in their 2014 industry forecasts that “discretion with respect to dealer participation (will) dwindle (maybe out of existence) as a result of CFPB pressure on finance companies.” Legal analysts note that, “finance sources are already telling dealers they ‘might’ have a discrimination issue on their hands.”*

So, let’s shut out all the noise and fear for just a moment and rationally consider what the nixing of dealer reserve would mean, at the most basic level, for the current dealership sales and financing process.

To do that, let’s quickly review how, in our dealer participation world, cars are now bought and financed…

First, we all know that consumers have to slog through time-consuming stages on the dealership sales and financing “game-board”: trudging from test-drive, to sales department, to last stop, F&I. And we know that in F&I, because of the dealer reserve model, this is how it goes: managers use educated guesswork (after eyeballing the customer’s credit history and flipping through their pile of lender rate ‘sheets’) to set a financing rate. They then “spray and pray” terms to multiple lenders, waiting for those lenders’ mysterious ‘black boxes’ (where real pricing and unique credit policies/parameters are locked up), to return finance terms that deliver the biggest dealer profit. Dealer participation is, of course, the difference between the lender’s approved interest rate (the “buy rate”) and the APR the dealership wrote the vehicle purchase contract at. A manager assumes that customer is Tier 2 credit qualified, writes the rate up at 7%, chooses the lender that returns the lowest buy rate, such as 5% – and profits with that 2% spread.

Note here that this archaic, guesswork-based model happens without any involvement on the part of any lenders (and without any human’s ability in F&I to master all the complexities of multiple lenders’ loan parameters and rules). So, the upshot is that a percentage of loan deals either unwind or have to be completely rewritten. This is a costly, time-consuming headache for all parties: consumers, dealers and lenders.

The Process in a Post-Reserve World: There is one overwhelming fact about how the sales and financing process would change in a post dealer participation world: the negotiation of finance terms, monthly payments and interest rates without lender involvement will no longer be practical. The lender interest “buy rate” will NECESSARILY become one and the same with the consumer contract interest rate/APR. Dealers will have to determine the lender and final loan approval terms BEFORE contracting with the consumer, so the financing “piece” will move right up to the point of the sales negotiation. If it didn’t, a dealership would suffer an impossible proliferation of purchase contract re-writes, unwinds and reduced profit. The old system of interest rate guesswork and shot-gunning of loan applications at the end of the “game” will not be sustainable. You won’t be able to have managers writing contracts at 7.5% with the best-priced lender coming back with a 6.5% rate. For dealers to be able to structure a finance deal, lender approval terms must be known, done, locked up and transparent at the point of sale – whether that’s online or in-dealership.

We all know the CFPB is looking towards replacing dealer participation with a flat-fee model to dealers for handling the finance purchase contract process. We all know dealerships provide hugely valuable services (for lenders and consumers) in financing, and dealers will still get paid and profit. And if CFPB regulations come to pass, we may see set profits on each loan getting pre-loaded by dealers – but based on amount financed, not the customer’s credit qualifications.

This short exercise in reviewing how the current sales/financing process works - and how that would most essentially change in a post-dealer-participation world, shines a clear light on how crazy and broken the current process is – and how, at a very fundamental level a post-reserve model could ultimately benefit dealers. It could make them far more efficient, and, yes, profitable. When you move the financing to the front of the sales process and eliminate all the dealer-lender back-and-forth it. by nature, creates a radically more streamlined, integrated sales and finance process – and one that could reduce the total transaction time from hours to minutes.

At the recent NADA convention, emotions over the CFPB ran hot. But another hot topic was how the sales process simply needs to get more efficient. A study was presented showing the current purchase transaction takes a whopping four hours** with the report’s author noting, “It’s frightening…how much time is being wasted on the typical car sale. It’s a wonder…the dealership manages to make any money.” Leading dealer sales consultants like Grant Cardone argued the way cars get sold simply needs to change, and speed up, because people are “irritated” and don’t even want to come into the showroom anymore.

Very few have connected the dots between these two “hot topics.” If the CFPB acts to eliminate dealer reserve, final, approved loan terms must be in place at the point of sale, and the costly guesswork and irrational shot-gunning of loans must end. This would rationalize the whole process and it would certainly make consumers much more happy, and more likely to finance with dealers. And if the CFPB doesn’t act, change still has to happen. We’re at a real crossroads with the sales and financing process – and I believe it’s welcomed, and nothing to fear.

*F & I Magazine, “5 Regulatory Predictions for 2014,” by publication’s ‘legal insider,’ January 2014.

**Field study of 200 dealerships by consultant Mark Rikess, reported in Automotive News, February 2014.

By Pete MacInnis, Founder & CEO, E-Lend Solutions (a DealerCentric company)