In talking with dealers, Autotrader general manager Jessica Stafford sometimes gets this question: does digital retailing put dealers in danger of losing control of the car-buying process?
“And the answer is, no. It’s actually not this battle for control any more. It’s just enablement and access to information,” Stafford said in a phone interview last week.
“Amazon and the like have taught us as consumers that this is the new normal. This is the new behavior,” she said. “So, how do we in the automotive industry get into the leading position in that, as well?
That’s the thought that Autotrader, its peers, dealers, automakers and others throughout the car business are pondering, with many testing new techniques to adapt to this “new normal.”
Hyundai, for instance, launched a digital showroom on Amazon.com on Wednesday that lets consumers check out pricing and reviews, set up test drives, view dealer inventories and more.
“This collaboration with Amazon provides customers with the ability to learn about Hyundai vehicles in a way that matches their expectations for nearly every other type of purchase,” said Tim Maxwell, Hyundai Motor America’s senior group manager for digital marketing, in a news release.
“Hyundai and its dealers are modernizing the car buying process, so it made sense for us to be the first car company with its own digital showroom,” Maxwell said.
Utilizing ‘sophisticated technology’
For Marco Schnabl, this new way of thinking began during his days working at Mercedes-Benz of Manhattan prior to launching automotiveMastermind in 2012 with Johannes Gnauck, who also worked at that Mercedes store.
Since it is owned and operated by the automaker, Schnabl said the Mercedes dealership pilot-tested various technologies, including CRM, DMS and equity-mining tools.
“And we quickly learned that yes, the engineering of a car is highly sophisticated, but the process itself and how to sell that same car and how to connect with consumers — despite a vast array of different tools and technologies — is not sophisticated at all,” he said in a phone interview.
Compare that to the sophistication of Netflix and Amazon, which were beginning to make waves at that point.
“We thought, these companies are applying a different type of technology, much more sophisticated to their customers, trying to understand what matters most to the consumer and making them an offer that is very, very important and relevant to that individual consumer,” said Schnabl, now the co-chief executive officer of automotiveMastermind, which provides predictive analytics and marketing automation to the car business.
“Why can’t we do the same for the auto industry?” he said.
So, automotiveMastermind went about to trim pain points in the sales process — which Schnabl contends are also a thorn in the side of dealers — and make it less complex. They began developing technology “that would predict based on thousands of different data points how likely it is that someone is going to react to an offer.”
Make it personal
While Schnabl was speaking more to the marketing side of automotive, the same personalization on the digital retailing side was emphasized by Stafford at Autotrader.
Shoppers in essentially every other retail vertical now expect this personalized experience, she said.
You expect your favorite clothier to deliver a tailored online experience, and for example, know what you might be looking for and allow you to save credit card information for future purchases.
That expectation of a personalized experience extends to car-buying, Stafford said.
“I expect to know what’s available, what the price is that others have paid, what all of the fees are that are included,” she said. “And the more of that information that I have as a consumer, I feel confident and certain in the purchase that I’m making and (end up) a happy customer and a more profitable customer.”
While this is a cross-generational expectation, it is interesting to note that the general outlook on personalized retail has shifted over the last decade.
“The kind of data-enabled personalization and targeting that used to happen five, 10 years ago and was creepy and annoying and weird, is now not only a good thing, but it’s expected by consumers across the board,” she said.
This new mindset comes at a time when the process of digital retailing is now being looked upon, as Autotrader describes it, as the “age of the consumer.”
“We’re in this time when consumers have access to the information they need, the transparency in every step of the process — and frankly (for) retailing in general, not even just automotive,” Stafford said.
“Consumers have more access than they’ve ever had,” she said. “They’re able to do research; they’re able to see and compare prices; they’re able to acquire things form anywhere they want or need or wherever that thing exists, versus just in their current location.”
‘Lean into’ customer demands
So, to go back to the question Stafford often gets, yes consumers perhaps have more control. But it’s not even really about that; rather, the point is that the auto industry must embrace the consumer demand for more information.
“This age of the consumer is the idea where we’ve got to lean into what consumers are asking for and give them the information that they need or else they quickly kind of just go on to the next thing or the next source,” Stafford said.
“I do think digital retailing leans directly into that desire. Because through the digital retailing process we’re creating this balance where we’re giving consumers the empowerment to start their deal online and do their own research on their own time, dig in and work through the details of their deal while also holding the control of the final purchase and the profitability and all the business side to the dealer,” she said.
Think of it this way: the shopper is “in the driver’s seat,” but not from the vantage point of demand that they be in control, she said. Instead, the consumers now have the access to information they need and can obtain that info no matter where they are.
This has led to “more of a confident and informed” shopper, Stafford said.
“It also can be a bit overwhelming,” she said. “So, I think it’s our job in the industry to curate and aggregate that information for consumers, make it digestible and easy to understand in order to enable their experiences.”
Connecting online to instore
So what happens when the customer who starts a deal online ends up at the dealership?
What Stafford calls the “golden connection point” is the dealer’s ability to shift operations in order to accommodate the online shopper in a personalized, connected way once he or she is at the store
With the Accelerate digital retailing platform on Autotrader, the site records, saves and delivers the information provided by the online shopper — things like vehicle preferences and any deal terms and components that have been filled out — to the dealer
In the future, Autotrader hopes to send behavioral data to dealers, too.
In other words, it wouldn’t just be sending the dealer what the digital retail customer is interested in, what their financing looks like or the trade-in information, but also, what cars they cross-shopped, add-ons they viewed or their interest in car-seat space, for instance.
The goal would be to create an even more personalized experience.
But for now, one huge key is to differentiate between traditional leads and actual digital retailing customers who have begun to set up dealers online, Stafford said.
The dealer has to meet the consumer exactly where they are in shopping process and the respect the time, research and effort they’ve already made to set up a deal. deal set-up they’ve already put in. That leads to greater efficiency for both consumers and dealers
For dealers working with Autotrader, Accelerate deals look quite different than typical lead that comes into dealer CRM, Stafford said.
Some of Autotrader’s top dealer partners, for instance, will have two or three people fully trained in Accelerate who are dedicated to digital retail leads that come into the store, she said.
Again, it’s making the online to in-store transition smooth.
“That connection is the critical part in this process for our clients and our partners that we’ve worked with. The most important part is making sure that when you get an Accelerate digital retailing deal through and you get a customer coming in, you have to treat them differently than a typical lead,” she said.
“If you treat them like a traditional email lead and you work to schedule an appointment and you work to try to sell them different things once they get into the store, it fails right away.”