The day has arrived for you to step into the world of digital automotive retail. While this might sound complicated and expensive to launch, the truth is that any local dealership can create a digital retail infrastructure.
All you need is the right information.
Imagine a turn-key system where customers can purchase vehicles from your lot without you lifting a finger. And that’s just the beginning of what digital retail can do. It’s an effective way to maximize sales without increasing overhead.
Here, you’ll learn how to succeed in digital automotive retail.
1. Pajama Shopping
Digital retail is often referred to as pajama shopping. This is because a consumer can purchase anything they’re looking for without leaving their home.
Buyers are in love with pajama shopping because they can do it on their own relaxed schedule. They don’t need to wait in lines or deal with salespeople. In addition, online stores are open 24 hours of the day. They can also read reviews from other customers to help determine their purchase decisions.
Digital Retail Statistics
Here are some powerful statistics to get you excited about moving to digital retail:
- Over 1.92 billion consumers will make an online purchase by the end of 2019
- Automotive e-commerce sales will grow at a 6% compound annual growth rate through 2023
- E-commerce sales in the U.S. should exceed $690.84 billion by the end of 2020
- The forecast for U.S. e-commerce sales in 2022 is around $891.7 billion
There are five key factors that trigger a customer’s online purchasing decisions. According to NPR, these factors are speed, price, availability, delivery rates and physical location of the retailer.
These numbers should get your attention as you consider new ways of dealership marketing.
2. Multi-Tier Marketing
Before diving into the other details of digital retail, it’s important to understand multi-tier marketing. To succeed in digital retail, a large portion of your marketing spend needs to be in the digital realm. This is a trend that’s taken the automotive industry by storm.
In fact, for each of the next five years, it’s expected that U.S. dealers and automakers will add an additional $1 billion into their annual digital ad spends. It’s also predicted that dealers and automakers will shell out nearly $8 billion on digital advertising spends in 2020. This’s up nearly 19% over 2019 spends.
Of these marketing spends, 60% will target consumers with direct-response campaigns. The remaining 40% is for branding. It’s important to note that nearly 50% of digital advertising budgets will target consumers on mobile devices. This is similar to other industries in the U.S.
Huge Digital Opportunities
As you can see, there’s an enormous opportunity for digital advertising to play a key role in bringing customers into your upper-funnel sales arena. From there, the goal is to make the purchasing journey as fast and easy as possible.
That’s where digital retailing steps in.
3. Digital Retail Removes Friction
As we move into 2020, it seems like time is the new currency. Most customers aren’t interested in spending an entire Saturday at the dealership, negotiating the purchase of their new vehicle. Today’s consumer is looking for fast and simple options that save time and headaches.
Reducing friction boils down to considering the customer’s needs throughout every step of the sales funnel. When you’re able to do this, you’ll earn satisfied customers that will spread the news to friends and family.
How many deals have you lost due to the time it takes to process financing and contracts? How many customers have walked away because you couldn’t negotiate an agreed-upon price face-to-face? Digital retailing removes these obstacles while giving the customer more control over less time.
4. CRM Data Mining
Your data is one of the most important resources you have. By mining customer data, you can improve customer experience, enhance marketing campaigns and encourage loyalty to your brand.
In today’s digital world, consumers generate a mountain of data every day. Dealerships that utilize big data tools to keep organized have a major advantage over their competitors.
You don’t need to be a professional scientist of data to understand and unlock the gold that’s hiding inside your CRM.
Business Intelligence and Analytics Tools
The top business intelligence and analytics tools open up unlimited ways for you to understand and use your data more effectively. From a digital marketing perspective, CRM data mining is the best way to understand your customers on a higher level. It also reveals why some marketing content is more engaging than others.
Through the use of CRM data mining, you’ll become an expert on your customers and what makes them tick.
5. Sales Completed 100% Online
Customers shopping for vehicles online want complete control of the transaction. They want to complete their financing application and paperwork in the comfort of their home. Then, they’re looking to have the vehicle delivered directly to them, or pick it up at the dealership with no hassle.
For dealerships, online transactions can come in a couple of different forms. Some customers will put half of the deal together online, then finish the transaction in the store. Others will complete the entire transaction on the dealer website. This gives the customer a feeling of complete control throughout the purchasing process.
Digital retail is a powerful way for automotive retailers to make every step of the purchase process completely automated. This includes trade-ins, credit information and managing the deal jacket. Once a consumer knows what they want to buy, they can complete the entire process online.
6. Mobile Tablets and Digital Menus
Mobile tablets change the way work flows within your dealership. They’re inexpensive to implement and serve several key functions.
Mobile Tablets in the Service Department
Your service department has the most to gain by using mobile tablets. When fully integrated with a DMS, they can:
- Automatically greet customers in the service lane
- Create or retrieve a customer’s appointment
- Scan the VIN
- View vehicle history, warranty or recall info
- Convert appointment info into an RO with one click
- Perform inspections
- Retrieve vehicle inspection history
- Show recommended maintenance
As you can see, serve department mobile tablets can vastly improve efficiency and customer satisfaction.
Mobile Tablets in the Sales Department
In sales, mobile tablets also serve an important role. Sales staff can use them to:
- Do quick searches of inventory
- Search competitor pricing
- Scan VIN numbers
- Demonstrate vehicle features
- Take customers on virtual test drives
- View and offer incentives and specials
- Share online reviews and dealership videos
- Perform vehicle walk-arounds for remote customers
All of these functions will improve the customer’s buying experience and purchase journey.
F&I Digital Menus
To maximize customer wait time between sales and F&I, hand them a mobile tablet with a display of the F&I menu. It’ll increase customer engagement and shorten the sales cycle.
With DMS integration, a mobile tablet can:
- Educate your customers on products
- Allow your customers to create their own packages
- Show them menu presentations
- Present payment and pricing options
- Digitally sign documents
You can see how useful this will be.
The Future of Dealership Marketing is Digital Retail
Marketing in 2020 and beyond requires a strong digital focus. Don’t get left behind by ignoring digital retail in your dealership. The future is digital.