Dealers hoping to survive the digital shift must expand their online options to include finance and insurance (F&I) products and electronic signatures at time of purchase.
A small percentage of car sales are currently completed through e-commerce, but franchise dealers believe that number could grow to 40% in the next five years, Isabelle Helms, vice president of research and marketing intelligence for Cox Automotive, said Monday during Cox’s Fall Expo.
“As a result, three-quarters of dealers agree that offering more digital options to customers is essential to long-term survival,” Helms said. “Many now claim to offer digital retailing solutions to shoppers, but the reality is a near majority of dealers are providing only light digital capabilities, many of which take place during the early phase of the shopping process — things like applying for credit, finding information on rebates and incentives, determining a payment.”
The COVID-19 pandemic has accelerated dealers’ need and desire to grow F&I sales and better communicate with consumers in the online-first era, but digital adoption in auto finance has a long way to go. “What’s often missed in what consumers desire the most is the ability to select F&I products digitally and to finalize the price of the vehicle online,” Helms said.
Consumers also want the ability to access OEM recall information, review and approve service and repair estimates, schedule appointments, get information on costs of services at the dealership, and access vehicle service history online.
“Dealers who have leaned heavily into digitizing their fixed operations have observed higher profitability, higher efficiency and delivered a better service experience than their counterparts,” Helms said. “We’re also seeing a growing number of dealers transforming the experience by offering services such as service pickup and delivery, ridesharing accommodations, or loaners — all of which are really quickly becoming popular with consumers.”
Successful dealers have embraced consumers’ new way of shopping by adopting an omnichannel approach connecting online and in-store experiences, providing a clear point of contact for shoppers and using new ways to communicate such as video chat and text messages, Helms added.
“Being successful in this new normal requires more than just embracing technology. Reimagining the sales process with a focus on the consumer experience will be what really sets dealers apart moving forward,” she said.
However, an increase in digital adoption is unlikely to replace the face-to-face dealership experience, said Mike Stanton, president and chief executive of the National Automobile Dealers Association. “Some consumers want to transact 100% online with the dealer, and today we can do that. But the vast majority want to continue to visit the dealership, talk to someone that knows a lot about the vehicles and test drive that vehicle,” he said.
Auto Finance Summit, the premier industry event, returns October 27-29 in Las Vegas. The Summit continues to bring together the best and brightest in the industry year after year for unparalleled networking and professional education. To learn more about the 2021 event and register, visit www.AutoFinanceSummit.com.