When it comes to digital marketing and the changes it has undergone over the years, Jared Rowe boils it down to three phases.

The first, he said — at least from the vantage point of the Cox Automotive Media Division he heads up — was the “inventory discovery” phase, where dealers began putting their vehicles online.

Phase two centered on “price discovery.” Work in that area, in particular, has ramped up in recent years, including at Cox Automotive’s Kelley Blue Book, where Rowe was previously president.

“I think where we’re at right now is kind of transitioning into phase three, and it’s one of the things that I get very excited about and I’m very passionate about,” Rowe continued. “Because I think the next phase we’re really entering into is about dealer discovery.

“Now, we’re seeing an awful lot of work going on right now in the industry, and a lot of innovation around the retail environment and the retail experience — having dealers differentiate themselves on something other than pure product and pure price. Ultimately, we believe this is not a commodity marketplace; we believe that this is a matchmaker marketplace.

“And when we think about what that really means, we think that it’s a new and unique opportunity for dealers to really merchandise themselves,” he said.

This won’t come as a surprise, Rowe notes, but consider this: there is a good bit of pressure on margins in both the new and used-car business. Interestingly enough, he adds, the industry has simultaneously seen narrower pricing bands — in other words, there isn’t as big a gap between listing price and transaction price.

So, when it comes to “building value in the sale,” he added, “a lot of it is going to fall upon the unique selling proposition of the dealer going forward.”

As such, Rowe said that Cox Automotive and his own division, in particular, are honing in on helping dealers “merchandise who they are,” in addition to merchandising product and price.

Next step in evolution

There’s a timeline from LotLinx that runs down the past couple of decades and how the digital car marketplace has evolved during the time.

The timeline, titled “Internet Automotive Marketing 1994-2015,” includes everything from the launch of Amazon in 1994 and the first online car database in 1996 to the debuts of the first dealership websites (1998), eBay Motors (2000) and the iPhone (2007).

Auto Remarketing asked LotLinx co-founder and chief executive officer Denise Chudy where she thinks some of the immediate next steps in this evolution might be on the used-car side.

She named three immediate developments that she believes could boost the used-car business. First, she said, is “increased distribution of VINs to every nook and cranny of the Web where a user gives a signal for the make, model and geo they are looking to buy.”

Chudy added: “Car shoppers reveal these three shopping criteria in the searches they conduct, the pages they view, the pictures they select, etc. Using technology to merchandise your VINs to sense and respond to these declarations will result in relevant VIN displays and focused traffic driving efforts.”

The second change that would help is to for dealers to keep closer tabs on “how their inventory is being ‘leveraged’ throughout the Web,” Chudy said.

“It is always amazing to see a dealer pay to have a VIN — which is their asset, by the way — displayed on the VDP of a third-party site that aggressively cross promotes competitive products. Dealers need to take back control of their VINs, and develop promotion plans that maximize the dealers own profits,” she added.

The third change is: “Better correlation of days on lot to VDP views.”

Chudy notes: “If a VIN doesn’t have VDP views, it is invisible to the world since 95 percent of car shoppers use digital to shop for a vehicle … We see savvy dealers understand that VDPs are simply product pages, and as marketers of VINs, dealers need to attract an audience to actually see the product in order to move it off the lot. Thus, an important evolution in the digital space for the pre-owned industry is to look at advertising one car at a time, by monitoring and exploiting VDP views VIN by VIN — which we call VINvertising.”

Be social

When Auto Remarketing asked Sean Stapleton of VinSolutions (another Cox Automotive company) about new channels dealers are using to sell used vehicles, he said it’s not so much about new channels, per se, but rather new ways dealers are using these channels.

He gives the example of Twitter.

“Twitter is a channel some dealers have been using for promotion or advertising. However, now we’re seeing dealers using video on Twitter to actually sell their inventory,” said Stapleton, who is vice president of sales and marketing at VinSolutions. “Dealers are posting videos of used cars on their lot, giving users a virtual tour of the car that they can easily watch right from their Twitter accounts.

“Providing this kind of transparency and enhanced user experience increases trust, which drives engagement and improves sales,” he added.

In that same vein, Stapleton said that many salespeople are crafting their own personas in social media, beyond the dealership’s social footprint. This helps them form a deeper connection with the consumer, he said.

“These salespeople are ahead of the game. They’re not just interacting with their customers; they’re creating and nurturing a personal connection that enhances customer retention and loyalty,” Stapleton said. “They’re providing a one-on-one experience that doesn’t require meeting the customer on the lot.”

That lends itself to the final point Stapleton makes: meet the customer where they are (i.e. social media) and take a proactive approach to reach them. The dealers managing to do this are the successful ones in the digital environment, he said.

“They realize their customers are on Twitter, and as such, they’re bringing their inventory directly to the customer. They realize there’s value in initiating relationships in the space where customers currently are. They’re not sitting back, waiting for shoppers to come to them,” Stapleton said.

“They’re getting out there and engaging their customers in the places and ways their customers prefer. To be successful today, you need to focus on the experience, not just the content,” he added. “After all, customers will remember the experience much longer than they will the content.”

This story appears in the Oct. 1 edition of Auto Remareketing, our look at Digital Trends, Tools & Strategies on the retail side of the used-car market.