It’s hard to believe that March 2020 will soon be three years behind us. Digital Retailing became more than just a call to action on our websites three years ago. Many dealers quickly responded to the pandemic by offering customers the ability to purchase their vehicles online. Or in some cases, dealers provided at-home delivery. But just because dealers offered customers the ability to purchase their vehicle online doesn’t mean it worked. It didn’t necessarily mean the customer could buy their car online. Hence why, dealers are still figuring out “digital retailing.”
Fast forward to today, we should ask ourselves – have we learned anything from Carvana? Do customers really want to purchase their vehicle online? Did Carvana get it right by offering the customer to buy a car online? More importantly, is there a need to continue with online digital retailing?
All are valid questions, so let’s answer them. Before Covid, Digital Retail meant a myriad of different things. Some dealers allowed you to view potential payments, apply for financing with a specific lender, etc. Yet so many dealers – those with digital retailing features – didn’t have an internal process to manage the steps the customer completed online. So, when the lead came into the CRM, the response sent to the customer didn’t always match the steps they completed.
As a customer, it’s frustrating to complete a “digital retailing” process online to have to start over when coming into the dealership. And whether this is about having unclear steps online or simply not following the steps online at the dealership – it’s important to note that online steps can positively impact both the customer and the dealership. Regardless of whether or not the customer switches vehicles at the dealership, starting the finance and trade-in process online with clear directions will save them time at the dealership. And we all know that saving time at the dealership can positively impact their post-purchase survey from the OEM. Not to mention it’s a win for the dealership as well. This allows more efficient turn rates and thus saves everyone time which is, as you know, the most precious commodity today.
However, if when the customer gets to the dealership and the Sales Consultant expects the customer to repeat the entire “online” experience, it can and will cause unnecessary break-points. Albeit Carvana is in turmoil, but one thing they did get right is setting a level of expectation for the customer. They legitimately went through the process of purchasing their vehicle online. The customer clearly understood what their vehicle payment would be before delivery. If we can use elements from Carvana – such as financing/payments – it could save time. Of course, it’s not to say that when the customer gets to the dealership, they’d end up purchasing the same car. Hence why so many customers continue to prefer going to the dealership to purchase their vehicle.
So that poses the question, is it still necessary to continue offering digital retailing? Well, that depends. It depends on whether or not dealers will follow the steps they place online in the dealership. As mentioned above, if the dealer pushes the customer through the same processes they completed online at the dealer, then no – it doesn’t make sense. It will only cause frustration for the customer. It’s essential to explain what customers can expect when visiting the dealership. There’s nothing inherently wrong with offering the customer the ability to get the financing process started by reviewing payments and pre-approvals.
The key thing to note here is ensuring that you offer the customer the next steps. Even though they fill out an online credit application and review payments, they still need to select the right vehicle to meet their needs. More often than not, the car the customer inquired about differs from what they ended up purchasing. An issue that has and will continue to plague Carvana. It seems so simple to buy a vehicle online, BUT they wouldn’t offer a 7-day return policy without merit. Without test-driving the car and ensuring it fits their needs, it’s begging for issues with the customer’s overall satisfaction. It’s equally important to note their trade-in process, which is not the best practice. Since when does it make sense for a dealer to purchase a vehicle without actually test-driving it or completing a walk-around? How often have we seen a trade-in lead from KBB where the customer indicates it’s in pristine condition only to find out it’s less than perfect?
The bottom line is that digital retailing has a place in the industry. While Carvana is everything but nirvana, they offer dealers an opportunity to get digital retailing right. That is offering the customer the steps to purchasing a vehicle. Imagine if your dealer had a video that clearly explained the steps to purchasing a vehicle? In doing so, it shows transparency and can also help build the rapport needed to earn their trust. Trust built on solid rapport remains the best way to approach selling a vehicle. So, while Carvana is scrambling to figure out what it should be, let’s use this as an opportunity to refine what Digital Retailing is on the dealer level. Offering our customers a straightforward and to the point experience by mirroring their dealership experience to what we’re offering online.
In the meantime, it never hurts to complete a health check! Take a minute and complete a free stealth test – you won’t regret it.
As the COO | Partner of Phone Ninjas, Chris delivers leadership, coaching, and mentorship to 55 team members providing software sales and phone skills coaching. He fosters powerful partnerships and collaborations with leaders across various business sectors, establishing expectations, communicating vision, and escalating performance to maximize productivity and effectiveness.
Chris is an innovation-driven business executive with over 25 years of experience delivering leadership to teams of up to 75 overseeing development, launch, and sale of website lead acquisition, reconditioning process software systems, and technology that support automotive dealerships across the U.S., Canada, and Europe.
