Digital Retailing -- the recent buzz word in automotive -- followed closely by "Attribution" -- is nothing more than a glamorized form. While talking heads refer to a frictionless experience, this only occurs every 1000 transactions, when someone pays in full for the vehicle.

9 out of 10 transactions (anecdotal conversations with market leaders) online are abandoned. They send an incomplete form the dealer. This is a great start, but the idea of frictionless is refuted when people stop the transaction at the friction. 999 out of 1000 transactions are still completed over the phone or in the dealership.

I saw a local dealer in South Florida actual use the Amazon logo and say -- like buying a car on Amazon. 

Why are dealers so quick to be Amazon? Digital retailing is far from an Amazon experience because it at the end of the day, you still have unknowns such as credit, payment options and trade value.

Why not call it like it is -- buy the way you want to. Buy the car with a concierge service. 

When you buy a commodity on Amazon (as you can purchase the item in many places), you go through a checkout system that is similar to thousands of other sites. The difference with Amazon is that it's simple, it's easy and that have much more than books. So you can find everything in one place, even if you pay a little more... it's just convenient.

The car buying experience should be convenient -- done my way -- but it is definitely not frictionless.

CREDIT FACTOR

Out of the largest digital retailing companies -- Drive Motors and Roadster -- neither pulls actual credit. This introduces friction. While they all do a great job of providing baseline information for a customer, credit is the largest determining factor in payment. And, if someone is buying or leasing, they will have a payment effected by credit. Friction.

So these applications are merely forms. Let's call them FORM 2.0 compared to the Finance form that some dealers still have on their website. When was the last time one of those were filled out?

Shoppers consistently think their credit is higher than reality, so if given the option, they will put a higher value, reducing their payment and allowing them to receive favorable terms. Only to revisit when the dealership calls (friction) or they visit the store (friction) to find out that their actual credit is lower than anticipated and the quoted price is not accurate (friction).

TRADE VALUE

90% of people think their car is worth more than a dealer is actually going to pay for it. Trade Value is a huge part of the overall car buying process as it determines options for payment, interest and overall value of the vehicle. So now you have more friction which is caused by the perception of value versus reality.

You can't trade in a vehicle, provide a definitive payment and close a transaction without human interaction from the dealership. This is the friction that stops the transaction from being seamless and "Amazon-like".

That perception follows through to the whole marketing idea that Digital Retailing is anything more than a lead generation form for dealers. If dealers advertise that Digital Retailing is this great process only to have falter along the way, they are now dealing with a customer perception that they were deceived in some way.

I personally applaud the dealers that are pushing the envelope and creating great processes around the Digital Retailing technologies that exist today. There is a bright future for this, but it's going to be taken in steps. Technologies are on the horizon that will account for actual credit scores as part of the process, providing more specific payments and a true digital retailing experience. NADA will showcase a few of these and we hope to implement these systems in our in-store kiosk solution.

IN-STORE

Dealers must not forget that some customers may want to have that same "retail" experience inside the dealership and use kiosks to get trade value, research inventory or even have the option to buy a car. Some people don't want to talk to salespeople. Some people want to research on their own. Dealers need to offer a variety of solutions INSIDE the store as well.

At the modern restaurant or entertainment complex, customers are met with a variety of options of how to transact business. Kiosks are available to order big mac at McDonalds, a movie ticket at Muvico, or a sandwich at Panera -- but you can also speak to someone at a register. Dealers may yield caution getting to invested in a single path of selling as they may turn customers away that want more options.

ABOUT ME

Just a guy with an opinion and a keyboard.