Disruption Today: Drive Profitability with Emerging Technology
Based on the workshop presented at NADA 2019 by Mike Barrington, Senior VP of Retail Solutions Group Sales, Digital Retailing & Dealertrack F&I Solutions at Cox Automotive
The rate of technology change today is astounding – and the adoption rate is matching its pace. Not long ago, some of the technology we take for granted today sounded like science fiction. Today, we all carry powerful pocket computers that also happen to be phones, many of us have digital assistants that respond to spoken commands to do things like order groceries, and cars can talk and nearly drive themselves.
Consumers are already using the latest technology in every aspect of their lives. What you might think of as the “cutting edge” of technology is fast becoming the new normal.
Consumers expect their car-buying experience to be as convenient as the rest of their tech-enabled buying experiences. Unfortunately, dealers are already falling behind.
As an industry, we need to create the better, more transparent experience that consumers demand. Here are two major emerging disruptors that will impact the way dealers do business in the near future.
- Digital tools to enhance the consumer’s buying journey
Consumers want to be able to choose the points in which they interact with you online or in your store. Having an online presence is a given, but today you must enable the consumer to do a significant portion of their research and buying process online.
This doesn’t mean that the consumer will stop coming to your dealership. In fact, we know that the majority of shoppers prefer to finish their transaction in the dealership.
However, we know consumers demand more digital tools than ever before. Providing those tools gives you the competitive advantage.
For example, 83% of consumers want to learn about F&I before they visit the dealer, and they are more likely to purchase products that they’ve learned about in advance.
This is a big area where dealerships are falling behind the technology curve. If you don’t have a strategy to provide digital retailing tools, you’re already at a disadvantage.
- Proactively communicating with customers on their devices.
Just a few years ago, consumers thought that personalization and online targeting were “creepy.” Now it’s just an expected part of business interactions.
Think about retailers like Starbucks or Amazon that not only connect online experiences to the in-store/in-person experience, but also use their consumers’ data—backed by machine learning and AI—to continually build on their previous shopping behaviors. This helps them connect shoppers with what they want, when they want it.
Essentially, marketing is now a service that efficiently helps consumers find the things they need and want. Dealers who are ahead of the curve are leveraging this technology to deliver messages to consumers with the right context:
- The product or service that matches their needs,
- At the time they are looking,
- With the right information to help them make a decision about taking the next step.
They are delivering a value add, by helping the shopper find the product they need – and they will be rewarded with more traffic and sales.
What dealers can do to stay ahead
Now that you have a better understanding of some of the disrupters in our industry, let’s take another look at the some of the ways in which consumers are interacting with technology today:
- They use an app to order their coffee.
- They use another app to order their weekly groceries.
- They join monthly subscription services so they can have someone shop for their clothing, makeup, pet treats, razors and more.
The trend is that consumers are using technology to save them time and get them exactly what they want. That means dealerships need to think about how they can make the current car-buying process more digital and efficient.
Here are some things we know about what your customers expect:
- They want to start deals online. We know that 78% of car buyers are comfortable submitting a financial application online.
- They also want to interact with the dealership online and get accurate, real-time information about your inventory, the value of their trade-in, how much their car payment may be, and what financing terms are available for them.
- When customers arrive at your store, it’s vital that the dealership be able to pick up the deal where they left off online. Otherwise, their satisfaction declines within 90 minutes of being at the dealership.
The role of technology
When you’re examining the technology you use in your dealership, the goal should be to make each customer’s visit shorter, more efficient and more enjoyable. Increasing internal efficiency is one way to do this, but it should be done with a focus on enabling customer relationships at each stage of the deal.
To deliver against consumer demands, you must be willing to shift your current operations, become forward-thinking about your technology stack, and build the right foundation.
You can use this period of disruption to your advantage—and remain competitive and profitable.
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