Across the board, dealers are looking to integrate the consumer’s online experience with his in-store experience, in order reduce friction and in-store transaction time, Dawn Martin Harp, head of Dealer Services Inc. at Wells Fargo, told Auto Finance News.
The goal to reduce the time spent at the dealer, for a consumer, varies depending on each store’s model, but all of Wells Fargo’s dealers – which are close to 14,000 today — are aiming for less than an hour, Harp said.
“Some are at less than 45 minutes, and some are trending towards 20 minutes as far as their goal on the board,” she said. “But they’re in some state of ‘how do I take the consumer from their investigation on the web, making it easy to find that car, putting my inventory online, have them hold that car, to coming into the store and not starting that experience over again.”
Fundamentally, dealers are aware that there is less “tire kicking” being done on the lot today, and more research being done online, said Jerry Bowen, head of commercial auto at Wells.
“When that person is actually there, they [dealers] need to be able to execute,” Bowen said. “So the dealer’s mindset is: ‘we’re not likely going to get a second or third shot of that person coming into the store again.’”
Dealers have different models, so there isn’t one solution that could be applied, Harp said, but the macro view is that the process needs to be easier and transparent, customer convenience should be the focus, and the web channel to the store channel [experience] has to be integrated — it can’t start over.
“They’re all in various states of being, in that continuum, so what we’re looking at is ‘how do we help them with that, how do we facilitate that faster experience, a more transparent experience,” she said. “And we’re continuing a dialogue with them about ‘what is our role to help you make that happen?’”
Although there is an undeniable shift in the consumer model, the auto business is still healthy, both Harp and Bowen said, despite an uptick in delinquencies and losses for the industry overall.
“I think also the dealers are trying to figure out, ‘Well, the world probably isn’t going to continue on this linear growth rate,’ but it’s still pretty good,” Bowen said.
The auto industry is a cyclical business, Harp said, but Well’s losses are in line with the bank’s expectations.
“98% of our portfolio is current,” she said. “So we’re making loans to people who have the ability to pay, and the capacity to pay and we have a lot of focus on ensuring that customers can afford the vehicles we finance.”
