Converting holdouts: Spurring dealer adoption of digital retailing
As auto lenders continue to push digital retailing platforms, many dealerships have wholeheartedly embraced selling vehicles online. Others still think of digital retailing platforms as tools for lead generation and require coaxing to more effectively deploy them to sell vehicles.
Pandemic-spurred closures accelerated the adoption of digital retailing (DR) tools and omnichannel financing, with Chase Auto, Santander Consumer USA and U.S. Bank — to name a few — launching their own DR platforms to connect consumers with respective dealer networks.
Capital One and CarMax also expanded on their longstanding DR platforms as consumers were forced to shop from the comfort — and safety — of their homes, and digital retailers without brick-and-mortar locations, such as Carvana, Vroom and Shift Technologies, logged pandemic-era booms in profits.
Yet, some dealers still want to approach DR solutions as lead generators rather than a way to facilitate car sales, Bob Lanham, senior vice president of manufacturer relations at digital retail solution provider CarNow, told Auto Finance News.
“The second you rethink what your DR tool’s purpose is the second you’re going to see, at the very least, more profitable car sales for those that go through the tool, but you also might see more sales,” Lanham said.
The proof is in the pudding, Lanham said. “This becomes a mindset [issue] by the dealer. Is it a lead generation tool, where you just get a lead for the CRM, or can it truly power more transactional sales?”
Many dealers want to see supporting data before they turn their DR tool into a transactional tool, Lanham said, presenting a sort of chicken-or- egg dilemma.
“Most dealers don’t set up the DR tool to allow us to see the data that allows the consumer to go through the process the right way to digitally retail a car,” he said.
Publicly traded dealership groups have been using digital retailing for the past few years and continue to see increases in the number of consumers who purchase vehicles through digital channels, Lanham said.
“Follow Sonic, follow AutoNation, follow Lithia, follow Group 1 and follow CarMax. Every quarter they announce their online sales, and every quarter for the past year their online sales to their total sales is increasing,” Lanham said.
“That’s not by chance,” he said.
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