Online shopping has gained massive popularity in recent years across industries, accelerated by the pandemic. This is also true for the automobile industry. People are now open to the idea of purchasing a car online – a notion that would’ve sounded crazy a few years ago. Thanks to that, the importance of automotive digital retailing tools has increased multiple-fold for car dealerships and marketplaces. Even when people won’t purchase a vehicle online, they use digital platforms to research their options. To cater to that audience and more, you’ll need the appropriate digital retailing tools. Therefore, this blog takes a look at digital retailing for car dealerships and how to leverage it.
Ready to learn how to grow your online car retail business? Let’s begin!
What is Automotive Digital Retailing?
Automotive digital retailing is a technology solution that allows consumers to have a retail experience on a dealer’s website whether that’s on a computer or mobile device. Therefore, helps businesses grow in the digital world. This allows sellers to offer a fully connected retail experience on dealer websites to buyers. Additionally, this includes easing up everything, from customer research to getting finance options, scheduling test drives, etc. Digital retailing allows customers to do transactions online and finalize the purchase in-store.
How Digital Retailing Works in Automotive
Digital retailing involves every step between research and the purchase of a vehicle. It provides a great platform to car dealers for automotive dealerships. Digital retailing refers to using online platforms and tools in the car-buying process from online search to final purchase. Here is its simplified breakdown:
1. Research: Customers go through the websites and look for their preferred vehicle. Therefore, they make comparisons based on price, features, and brand value in the market.
2. Personalized message: Many car websites recommend products based on customer preference, budget, and location. One can go through them and get all the preferred products with a single click. Further, it makes decision-making easier.
3. Virtual car showroom:Â Car dealers provide virtual car showrooms where customers have high-quality clear images of the car that attract them towards final decision-making.
4. Contracts and purchases:Â Once the customer is done with all the research, they make a final decision. Contracts can be signed digitally and there are many financing options offered to different customers.
Modern Retailing VS Automotive Digital Retailing
Car buyers prefer purchasing their vehicles online, visiting a physical dealership is out of trend. Technology has become advanced making the car-buying journey more efficient and convenient. However, if we talk about automotive dealership digital retailing and modern retailing it’s confusing to understand the difference between them. We have mentioned a table below, breaking down the difference between both.
| Modern Retailing | Auto Digital Retailing |
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Automotive modern retailing is a collection of digital tools. Internal processes and dealership systems work jointly to serve their customers in a virtual environment. |
Digital retailing is a part of modern retailing that allows clients to have a similar retailer experience on any available device to the dealer’s website. It delivers a user-friendly buying experience for the customers. |
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To provide the best experience to the buyers, it includes, CRM (Customer relationship management), DMS (Dealer Management system, e-contracting solution, and desking solution). It helps in delivering a seamless and efficient customer experience by understanding the purchasing behavior and wants of consumers. |
It allows clients to research their desired vehicles, complete financing paperwork, calculate payments, pick F&I products, value trade-ins, and sign final deal documents. Consumers can browse the website themselves to inspect and compare the best vehicle before making an actual purchase. |
Benefits of Automotive Digital Retail for Dealers
Online automotive retail is quickly growing because of the convenience it offers to car buyers. It helps retailers deliver what customers expect – an accelerated buying experience. People can now use their mobile phones or computers to check out cars, even order them online, and get finance options, all from the comfort of their couch! Therefore Dealerships can recreate the showroom experience in an online platform and transform the sales process to give customers more convenience, flexibility, and confidence when making a vehicle purchase. If the curiosity bug bites them, your prospects could even book appointments at local dealerships to check cars out in person. Building digital retail builds trust and transparency with clients. Well let the numbers speak for the rise in online car sales: Here are the biggest benefits of digital retailing for car dealerships and retailers:
1. The shift toward online sales
Plenty of vehicle sales (including both new and used cars) are being conducted online, with consumers using smartphones, tablets, and other mobile devices as their primary point of purchase. Automotive digital retailing companies and platforms can help your business transition from the old, traditional sales methods to new, online ones.
2. Making things easy for customers
To understand how this trend is changing consumer behavior, consider this: Today’s consumers are more comfortable buying things online than ever before. In 2021, more than 80% of consumers in the US used contactless transactions. Therefore, it isn’t hard to see the importance of automotive digital retailing solutions for car dealerships and marketplaces in the current times.
3. Improving inventory showcase
To aid consumer research and gain trust, you need to present your inventory on the internet in the best possible way. Therefore, you’ll need to have proper strategies in place for that, to ensure that your website/sales portal has engaging and informative content.
Major Limitations of Auto Digital Retailing
Dealers are aware that car buyer’s purchasing preferences are shifting online. Introducing digital retailing automotive platforms is surely convenient and is a streamlined experience for buyers. However, installation and maintenance of automotive digital retailing can be a complex process for dealers. Car digital retail is costly to maintain and requires a high investment. Dealers require a dedicated and knowledgeable team to execute digital platforms. Therefore, we have mentioned some limitations below, which will help dealers to run their digital retailing platforms smoothly.
1) Website costs: Executing and maintaining a well-designed and secured auto e-commerce website is not cheap. Therefore, investing an amount in a website is not enough. Dealers need to understand the automotive marketing trends to advertise their platform and their enlisted cars to the correct targeted audience.
2) Infrastructure costs: Buyer’s shopping preferences have surely shifted online. However, before making a big purchase, they prefer visiting the showroom but digital retailing removes opportunities for test drives. Dealers should be aware of the expenses that are going to cost on building a physical showroom, inventories, and a service station requirement for after-sales.
3) Security and duplicity: The growth of the online retail market attracts criminal aspects. Reputation will collapse if dealers do not invest in high-security systems to protect their money transactions or website security. Hackers examine highly transactional websites and create pirated versions of them to divert revenue transactions. Therefore, dealers need to be aware and sharp enough to protect their reputation from these frauds in the market.
4) Legal issues: Before enforcing your business, completing all the legal formalities is important. Dealers need to obtain a dealer license before selling or buying vehicles. Need to comply with consumer protection laws regarding, cancellation policy, pricing, and advertisements. As per state and federal laws, dealers need to comply with tax regulations.
5) Customer trust: Building a reputation and trust among your potential customers is hard in digital retailing. Therefore, building trust without any person-to-person interaction requires a team of smart individuals. Dealers can encourage their clients to leave a review addressing their experience in the journey of their purchase with your dealership.
Top 10 Auto Digital Retailing Software in 2024
Retailing digital software helps dealers generate profits by enlisting and selling their cars online. Digital retailing software’s purpose is to provide a user-friendly experience from researching cars, comparing the choices, and closing the deal later. Understanding the use of digital retailing automotive software and car dealer software might confuse some folks. Therefore, car dealer software includes vehicle sales functionality. Whereas, digital retailing software focuses on all the car purchasing journey aspects. Some best automotive retailing digital software in 2024 are listed below:
| Softwares | Description |
| Gubagoo | This conversational commerce platform is designed for automotive dealers that offer a car buying experience from Facebook and their Website. Therefore, it offers live chat 24/7 which allows a customer to ask their inventory queries anytime they want via live chat, messenger, and texts. It highlights the best available offers and displays them to the clients based on their personalized preferences. |
| PureCars | PureCars helps users capture the market share and attract valuable traffic to your website to grow your business. It also helps provide lead-generation tools to improve car advertising efficiency. Additionally, they also help dealers compare their performances with their competitors to inspect the amount that needs to be spent on advertisement. |
| Upstart auto retail | They offer both in-store and online digital capabilities, management, and financing tools that help car buyers create an omnichannel experience. It allows dealers to create a consistent automotive digital retailing experience to build their deals online. It manages all aspects of deals, including APRs, and discounts, and assists the loan process. |
| AutoFi | AutoFi allows dealers to build their business and combine their sales and finance tools into dealers’ existing systems. They provide 24/7 sales support. AutoFi ensures maximum satisfaction with its ongoing technical support and white glove automotive digital services. It streamlines and standardizes the sales information, so all prospects can access the same record. |
| CDK Global | CDK Global allows dealers to use their platform to fill loopholes like dealership turnover, broken workflows, and bolt-on solutions. It allows dealers to run their businesses in this competitive digital and modern environment. Additionally, they offer advanced digital retail solutions suites like fixed operations suites, foundations suites, intelligence suites, and modern retail suites. These dealership technology solutions allow dealers to expand their business. |
| Dabadu XRM | Dabadu XRM provides a secure, sustainable, and efficient platform to dealers for their sales process. They also handle lender integrations, maintaining inventory, all-encompassing communications, processing credit applications, and lead management for more than 15 industry standard applications that are used by dealers in today’s time. |
| PrecisePrice | PrecisePrice helps automotive digital retail by converting cliffs into new leads, as most buyers start the car purchasing journey online. They integrate DealerSocket Desking which redirects dealers to dealers’ DMS. They understand the online shopper’s budgets and transfer the quotation to the dealers. Further, it makes sure that consumers get the exact price of the vehicle, whether they are at a dealership or browsing online. |
| Route One | Dealers can sell a car faster and more efficiently, as Route One connects them with after-market providers and financing resources. They allow dealers to create the modern F&I experience as per consumer’s preferences. Therefore, to enhance customer experiences and grow aftermarket sales, they provide RouteOne Menu powered by MaximTrak. They help dealers get the correct contracts and funding with their RouteOne eContracting platform. |
| Tagrail | Dealers can display their inventory and convert potential leads into their clients with Tagrail. Dealers can access their data from their portal. Further, they can make decisions, by examining credit evaluation, pricing, negotiation, and finalizing the sale. Dealers can offer car walkarounds, trade-in evaluation, credit qualification, and on-demand needs assessment with the help of Tagrail to their potential clients. |
| SalesIQ | SalesIQ generates more leads for the dealers. Additionally, they display an accurate payment on all available platforms. Consumers do not negotiate after inspecting an accurate and same payment amount on all platforms. They provide automated leads that help improve car buyers’ experience. |
Coming up Automotive Retail Industry Trends
The automotive retail sector is undergoing a significant l transformation. Consumers these days are increasingly using online platforms and digital tools to research vehicles, compare prices, and make purchasing decisions. Therefore, automotive retailers are investing in online sales channels, virtual showrooms, and digital marketing strategies to meet the changing preferences of consumers. All these retail industry trends are discussed in detail below:
1. E-Commerce and Online Sales
E-commerce tools are becoming more prevalent in the automotive retail industry. Therefore, consumers are increasingly comfortable with making significant purchases online, including vehicles. Automotive retailers are developing robust online sales platforms that allow customers to browse inventory, customize options, arrange financing, and even complete transactions entirely online.
2. Shift Towards Electric Vehicles (EVs) and Sustainability
There is a growing demand for electric vehicles (EVs) and environmentally sustainable transportation options. As awareness of climate change and environmental concerns increases, consumers are seeking greener alternatives to traditional internal combustion engine vehicles. Further, automotive retailers are expanding their offerings of EVs and promoting sustainability initiatives to attract environmentally conscious consumers.
3. Subscription and Mobility Services
Subscription and mobility services are gaining popularity as alternatives to traditional car ownership. Consumers are increasingly interested in flexible automotive solutions that offer access to vehicles without the long-term commitment of ownership. Further, automotive retailers are partnering with subscription service providers and offering their own subscription models to cater to changing consumer preferences.
4. Personalization and Customization
Personalization and customization are key trends in the automotive retail sector. Consumers are seeking unique and tailored experiences when purchasing vehicles, including customization options for features, accessories, and services. Automotive retailers are offering customizable packages and options to meet the diverse preferences of consumers and enhance the overall buying experience.
5. Omni-Channel Retailing
Omni-channel retailing is becoming increasingly important in the automotive industry. Consumers expect a seamless shopping experience across multiple channels, including online, mobile, and physical retail locations. Moreover, automotive retailers are integrating their online and offline channels to provide a cohesive and convenient shopping experience for customers, allowing them to research, browse, and purchase vehicles through their preferred channels.
Automotive Digital Retailing Capabilities
Digital retailing in automotive allows buyers to shift their shopping from offline to online smoothly. It is a well-designed and clear purchasing path to give car buyers access to independently control their entire car shopping journey. Therefore, the vehicle purchasing journey involves several steps and it varies from customer to customer. A hybrid retailing experience should offer a clear, concise, well-designed purchase path that allows customers to shift effortlessly between online and offline giving full control to customers to self-direct themselves. We have mentioned some basic features your digital retailing platform should be capable of:
1) Vehicle Catalog: Retailers should maintain a digital vehicle catalog, consisting of the vehicles they have enlisted. The catalog should include high-quality photographs also a 360 car virtual tour would be eye-catching. Enlisted vehicles should have a detailed description of their specifications, and features. Therefore, the catalog should be high functioning, customers should be able to find the enlisted vehicle models, features, and price range easily.
2) Shopping Cart: Shopping carts allow users to save the vehicles they are interested in for future consideration. Buyers usually add vehicles to shopping carts so that they can compare the features and pricing before making a purchase decision.
3) Test drive scheduling: Dealers should offer test drive options, so the buyers can schedule their test drives online while sitting back at their homes. Users should be able to schedule test drives as per their preferred time slots, which makes it convenient and comfortable for them.
4) Financing calculator: Offering a financing calculator engages your users to check down payments, loan terms, and credit score estimations to see their EMIs. Your calculator should be able to provide the interest rates and total loan cost amount, so your buyers can make a wise purchase decision before visiting a dealership.
5) Human AI assist: To provide an informative personalized experience to your buyers. Dealers can use the strength of artificial intelligence and the expertise of a human, to answer basic questions about their potential buyers. Therefore, using human AI chatbots can provide financial estimates, and schedule physical appointments that will make your platform more engaging for users.
Best 5 Automotive CRM Providers
Automotive CRM(customer relationship management) is an automotive solution that helps automotive dealers with sales, marketing, and customer services. CRM providers are the companies that help automotive businesses with these solutions. There are many Automotive CRM providers in the market but selecting the best among them for us is a tough task. In addition to this listed below are some top CRM solution providers that must be considered:
1. Salesforce Automotive:Â Salesforce offers a comprehensive CRM solution tailored for the automotive industry. It provides tools for managing leads, opportunities, customer data, and marketing campaigns. Salesforce Automotive also integrates with other Salesforce products for enhanced functionality.
2.DealerSocket:Â DealerSocket is a leading CRM provider specifically designed for automotive dealerships. Its platform includes features such as lead management, inventory management, customer communication tools, and analytics. DealerSocket aims to streamline dealership operations and improve customer relationships.
3.VinSolutions:Â VinSolutions, a Cox Automotive company, offers a CRM platform designed to help dealerships manage customer relationships effectively. Additionally, its features include lead management, communication tools, follow-up automation, and integration with other Cox Automotive products like vAuto and Autotrader.
4. CDK Global:Â CDK Global provides CRM solutions for automotive retailers, helping them manage customer relationships throughout the sales process. Its platform includes lead management, customer communication tools, analytics, and integration with other CDK products for a seamless experience.
5. Elead CRM:Â Elead CRM offers a comprehensive solution for automotive dealerships, including lead management, customer communication tools, inventory management, and reporting features. Additionally, Elead CRM aims to help dealerships increase sales and improve customer satisfaction.
Current Stats in Automotive Digital Marketing
1. Mobile Usage:Â With the increasing use of smartphones, mobile devices are becoming a crucial platform for automotive marketing. According to recent studies, around 80% of car shoppers use smartphones to research vehicles. Therefore, optimizing digital marketing strategies for mobile users is essential.
2. Video Content:Â Video content is gaining significant traction in automotive digital marketing. Studies show that over 80% of car shoppers watch online videos during the buying process. Further, video ads, walkthroughs, and reviews are effective tools for engaging potential customers.
3. Social Media Influence: Automotive Social media marketing plays a vital role in automotive marketing. Approximately 75% of car buyers report that social media posts influenced their purchase decisions. Therefore, platforms like Facebook, Instagram, and YouTube are popular channels for reaching potential customers.
4. Search Engine Marketing (SEM):Â Search engine marketing continues to be a crucial component of automotive digital marketing. Around 70% of car buyers start their research process with a search engine. Therefore, investing in SEO (Search Engine Optimization) and SEM (Search Engine Marketing) can help automotive brands appear prominently in search results.
5. Personalized Marketing:Â Personalized marketing campaigns are becoming more prevalent in the automotive industry. Tailoring advertisements and content based on user preferences and behavior can significantly increase engagement and conversion rates. Studies show that personalized emails, for example, have a 25% higher open rate compared to generic emails.
Challenges Faced in Auto Digital Retailing
Despite being user-friendly and convenient there are many challenges faced by automotive digital retailing. some of them are lack of trust, elimination of test drive opportunities, complex buying process, and lack of personal touch. All these are discussed in detail below:
1. Lack of Trust
Customers while purchasing products like cars prefer to interact with the dealer face-to-face and expect some personalized services. they want a person who can answer all their queries on the spot. However, since the whole buying process is online therefor it lacks consumer trust and loyalty to the brand.
2. Complex buying process
Despite so many options and opportunities on the digital platform still, it is complicated for a customer who has less knowledge of cars and automobiles to research and reach to the final decision hence, makes the whole car buying journey complex.
3. Elimination of Test Drive opportunities
Reports state that around 67% of people prefer test drives before the final purchase so that they can understand and experience the vehicle’s performance, features, and handling, with increasing digital retailing solutions the opportunities for test drives are decreasing.
Key to Successful Digital Automotive Retailing
Automotive digital retailing helps in selling cars online to generate revenue. It is an all-encompassing sales process that transforms the way retailers and dealerships sell cars. Dealers providing online shopping experience should be precisely the same as the in-store purchase experience for car buyers. Dealers can provide a chatbox to solve buyer’s queries. Potential buyers should be able to compare different models and features. Additionally, it will help buyers to make a strong purchase decision after collecting information like secured financing, an agreement of delivery of the vehicle, etc. Every digital strategy for car retailers needs to have the following elements:
1. Car sales menu with appropriate filters: Option on the website for users to filter the available options based on make and model, price, miles/kilometers driven, etc.
2. A search bar on the website: This makes it easy for customers to check out their preferred options, thus making navigation easy.
3. Offer finance options and EMI calculator: People interested in buying a car will also be on the lookout for finance options. Make life easier for them by offering the latter on your website; you can partner up with banks or NBFCs for that. An F&I tool should ensure that F&I profit is maximized for online car sales. A good automotive digital retailing practice is to decide the monthly payment based on accurate lender rates, value their trade, and later shop for accessory items.
4. Car value calculator: If you also allow your customers the option to sell or trade-in, then adding a car value calculator is a smart decision. Further, this will allow people to check the approximate value of their existing car(s) and decide if parting with it is a good decision or not.
5. At-home consultation and booking a test drive: Your digital dealership should offer all the benefits of a physical dealership, with the added convenience of being able to do it from their homes. Additionally, your sales representatives need to provide online and on-call consultations to potential buyers. Your website should also have a provision to schedule appointments for test drives.
Choose the Right Auto Retailing Tools for your Dealership
Automotive retailing solutions should integrate right into your website VDP. Before you proceed with your digital retail strategy, you should pick the right tools for it. Therefore, look for the right online and in-store capabilities, management, finance tools, etc. Here are some features and components to look for in an automotive digital retailing platform:
1. Vehicle price evaluation tool
You need a tool that effectively estimates the value of the vehicles in your inventory. Overpriced cars tend to turn away buyers, while underpriced ones lower your profit margin.
2. Car appraisal tool
While determining the value of most used cars is relatively easy, a few are complicated in that regard. Due to strong demand, scarcity, cult-like following, etc., some pre-owned vehicles can be sold for a much higher price (provided they are in great condition). You’ll need the correct tool to leverage market data and determine which models will be the most profitable.
3. Inventory management system
You don’t want to spend all your time managing your car inventory management and maintaining sheets, do you? Choosing an inventory management tool helps ease the work, it will also help reduce inventory turnover time and boost profits.
4. Online retail channels
A car sales website (or a third-party online automobile marketplace) is absolutely necessary. You can go a step further and offer a smartphone app as well, which can offer a smooth and intuitive buying experience.
5. Vehicle display page
Your dealership website/marketplace needs to have a Vehicle Display Page, or VDP, for every model, so that people can check each vehicle out individually. These VDPs should offer all the relevant information – engine, fuel economy, features, equipment, etc. Bonus points if your VDPs are interactive and have high-quality images and videos.
6. Vehicle history report
When selling used cars, it’s hard to get consumers to trust your business or the vehicles you have listed. This can be rectified by offering a vehicle history report, which lists every detail about the vehicle one should know, including any accidental damage.
7. Analytics tracker
It is necessary to track the performance of your advertisements across platforms, listings on different portals, different marketing and sales channels, etc. This can help you understand what aspects of your digital retailing strategies are working and which aren’t.
8. Online reputation management
Online reviews can help build your reputation, but they can also spoil it. Any malicious and hurtful content aimed toward your business needs to be tracked down and reported. Note: You also need to ensure that genuine complaints are addressed instead of being shot down.
How is Digital Retailing Affecting Dealerships?
Dealers confirmed that after implementing automotive digital retailing in their business, 90% of the dealers observed benefits and growth in their business. Therefore, it has positively impacted their business, especially in customer experience and satisfaction. Dealers can close deals easily and swiftly, which decreases the workflow of employees. Dealers are satisfied after investing in their digital tools because it improves their customer’s and staff’s experience. Hence, digital retailing is shaping the future of automotive industry. We have mentioned some benefits dealerships are observing after implementing digital strategies in their business:
1) Saves time: Digital retailing helps consumers complete every step in the journey of online car purchasing by themselves. Both consumers and dealers confirmed that after utilization of digital retailing has saved time. Consumer time by 93% and dealers by 60%.
2) Customer Experience: Dealers optimizing digital retailing platforms believe that these tools have improved their relationships with customers by up to 43%. Additionally, consumers are getting more personalized experiences in their car-buying journey.
3) Access to information: Dealers find that 74% of consumers are comfortable in sharing access to information. To provide the best experience to the consumers, they are ready to share their data such as their credit score and income. Up to 52% of used car owners who want to sell their cars are also comfortable sharing the history of their vehicles. To provide a more personalized experience 29% of users are ready to share their social media data.
How Automotive Digital Retailing Has Evolved?
The automotive e-retail market industry has transformed significantly in recent years. It has evolved into an essential dealer tool that saves time and deepens connections with car buyers. Adaptation of advanced technologies and simple access to browse information has revolutionized the experiences of consumers. Allowing car buyers to inspect vehicles, compare with other alternatives, and make a final purchase online made it convenient and user-friendly. Therefore, the digital retailing trends led dealers to face shortages in the supply chain. Increased sales of autos and their parts were 4.8% in the year 2021. Whereas, it extended up to 30.1% year over year.
Traditional methods
Even after the advancement of auto retailing technologies, Deloitte’s study shows that 48% of consumers still prefer visiting an authorized dealership for the car purchasing journey. People still prefer their traditional methods, where they can physically feel their desired vehicle and chat with the dealer personally. However, online car marketplaces allow users to browse vehicles while sitting back in their homes. To make the buyer’s experience more convenient, dealers inspire digital retailing to offer home delivery of online purchase vehicles.
Purchasing preference in recent times
Some car buyers prefer shopping with traditional methods because they lack trust in purchasing vehicles online. They wish to inspect the vehicles physically before making any decision. However, to build trust among the car buyers. Dealers are optimizing the retail online process between the showroom, website, and financing to generate maximum consumer satisfaction. The presence of transparent retail processes will generate trust among the consumers to deal with and shop for vehicles online.
Conclusion
The future of car dealerships lies in expanding automotive digital retailing. The way consumers shop today is online, and that’s what we need to understand. Nowadays, consumers expect convenience when buying products. With just a few clicks, they can order their favorite restaurant meal and have it delivered right to their doorstep. It is also important for car dealerships to recognize that. Therefore, the number of consumers shopping for cars online will continue to grow. More people will likely expect to be able to complete at least part of the process online if not all of it. For this, car dealership photography will play a vital role. Moreover, by embracing this reality, dealers will be able to increase sales and efficiency. Without them, dealers will have a hard time staying in business.
