Digital retailing was merely an interesting topic of discussion a few years back. As consumer’s lives became more digital, dealerships and other retailers realized they need to keep up. Then the Covid-19 pandemic completely changed everything! With the onset of the pandemic, consumers wanted more transactions to be conducted in an online environment, with as little contact as possible.
Difference between online and digital retailing
Contrary to common misconception, online retailing and digital retailing aren’t the same. Digital retailing is about digitizing operations in your dealership. It is done to increase productivity, reduce bottlenecks, and meet consumers’ expectations. Online retailing is when a business transitions its brick and mortar operations into an online environment. Negotiating vehicle terms, signing documents, and paying for service invoices – all of these take place online. It involves taking standard day-to-day processes that have typically been done in-store and making them available to consumers from the comfort of their homes.
Welcome the hybrid model
However, it is easier said than done. You simply can’t forfeit everything you worked for in-store to go completely online. Some customers still want to do business with you – in-person – or conduct at least some part of the transaction by actually visiting the dealership.
So how do you decide between what you know as traditional in-store processes (digital retailing) versus the newer high-demand remote processes (online retailing)? Rest assured you don’t have to choose between the two. Amazon giants have it all figured out – a hybrid business model, or a retail anywhere approach. It combines both in-store and online experiences, so neither are disrupted by the other. If a customer starts online and ends the journey in-store, their experience, information, and expectations is carried through the entire purchasing journey.
So what are the benefits of a hybrid auto sales model?
More control and profitability
In an online environment, you simply can’t hand the reigns over to customers. For instance, if customers are browsing through auto F&I products online by themselves, chances of them making an additional purchase are low. The reasons are simple:
- Consumers are generally conditioned over time to say no to add-on products.
- Average consumer probably doesn’t understand the value in them to start with.
Therefore, when customers are shopping online, and with no guidance from an F&I manager, there is less opportunity for those products to be included in the deal. Thus, profits begin to shrink fast!
Your F&I managers were hired to sell because it is what they do and they are great at it. Sustaining long-term dealership profitability is what you can expect from the hybrid model. In this model, F&I managers are present, even if they aren’t physically in the same room. They act as a guiding force and wrap up a lucrative deal that keeps the profit margin on track.
Accuracy of transactions
Accuracy is what keeps transactions moving from point A to point B, or in this case, from online to in-store seamlessly. Think about the amount of information that goes into a customer profile or new car deal. There are several steps involved starting from lead submission to signing documents.
How many times does the customer and vehicle information appear throughout the process? This information by itself is critical. It has to be 100% correct, or else you might lose the deal. Throw in the possibility of a customer starting their shopping online and deciding to pick up in-store where they left off. You might run into more unwanted trouble. For example, does your system recognize this customer began the purchase process already? Does it know the customer received quoted rates and terms? Or they were comparing two vehicles? In fact, does it recognize the customer in the first place?
If a customer is given a quote online and then decides to finalize documents in-store, what they see online has to be the same as what they see in the store. If their payments suddenly go up $50, that is when they become suspicious! It is a breach of trust, and they perceive that doing business with you isn’t all that great. In a hybrid business model, consistency is maintained at all points, so the transaction is completed smoothly.
Efficiency of employees
If your employees aren’t that experienced, it will affect the overall experience of the customer. Despite what might seem like a complicated process at first, making the sales and F&I process consistent between online and in-store really is simple.
Variables that go into efficiency include keeping communications open so you can hold your staff accountable, accepting down payments in F&I so the experience is more transparent and secure, and even gaining faster lender approval so the entire transaction feels less stressful for the customer.
It is important to note that it is not just about going digital, because the days of adopting a linear purchase path are gone. In today’s fast-paced world, it is more like stop-and-go or bouncing between channels. If customers are everywhere such as in-store, online, or both, the experience has to be consistent and hassle-free across the entire transaction. You have to meet the customer on their terms, being able to retail anywhere. However, you also need to ensure that control and profitability of sale, accuracy of transaction, and efficiency of employees, isn’t compromised. Consistency and ease of a hybrid model is possible only because a single system is built around a single, unique identifier for each customer, each vehicle, and each transaction. Thus, manual processes are eliminated, all departments become connected and business operations are more cohesive.