Digital retailing is gaining traction. Increasingly, customers can complete the entire car-buying process online: from choosing their vehicle, to setting up financing, to scheduling delivery.  

However, not all dealerships have embraced this trend, and many are still unsure about whether it’s worth it to offer a digital retailing option on their website. 

Dealerships who don’t offer a digital retailing option risk losing business to competitors who do. With more and more customers turning to the internet to research and purchase vehicles, those who don’t offer a digital option may miss out on potential sales and see their market share shrink. 

To help you make a more informed decision about whether to offer digital retailing on your site, let’s explore why you may or may not want to provide it — and a few tips to get started. 

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What exactly is digital retailing for dealerships? 

With a digital retailing option, your customers can complete most (or all) of the car-buying process online.  

This includes shopping for specific makes, models, features, and price ranges on the dealership’s website, accessing competitive financing options, requesting more information, or scheduling a test drive, and even completing a credit application.  

About 1 in 5 car buyers completes most of their vehicle purchase process online.

It’s not simply a website with photos of cars and prices, or some basic calculators to estimate payments. And it’s more than just having a website that lists inventory and tells customers to come to the dealership to buy the vehicle. 

The goal of digital retailing is to provide a seamless and positive buying experience for customers, from the initial online research phase to the in-store sign-and-drive process. 

Benefits of digital retailing for dealerships 

Why would you consider offering a digital retail experience to your customers? The biggest benefits center around a faster sales process, better customer retention, and access to a larger market. 

Allows dealerships to compete with online retailers 

Simply put, some customers prefer to buy online. If you fail to offer a digital path to purchasing a car, you’re missing out on a growing population of customers, and other dealerships will be happy to snatch them up for you. 

Meet your buyers where they prefer to shop, and you’ll have access to a larger market share. 

Can help dealerships retain customers 

Customers who have a positive experience with digital retailing are more likely to return to your dealership in the future and recommend it to others. Even prior to a sale, a robust digital shopping experience helps keep buyers engaged if a buyer is delaying their car purchase. 

A 2021 Cox Automotive car buyer study revealed that buyers who completed key financing steps online were more satisfied with the time they spent at the dealership, compared to customers who completed the process in person. 

Increases sales efficiency 

About 1 out of every 5 car buyers is considered “primarily digital.” In other words, they’ve completed more than half of the total vehicle purchase process online. 

They can do this at their own leisure in a low-pressure environment, taking their time to select the vehicle and options that feel right for them. By the time they come into the dealership, they can drive off the lot with their new vehicle in record time, rather than spending an extra hour in a back office signing paperwork. 

This leads to a better customer experience, but also frees up more time for your team to process more sales per day. 

Customers are more informed and qualified 

When customers have the time to do their research and figure out the options that work best for them, they can come onto the lot and know exactly what they want. Even if they haven’t completed the final purchase steps online, they arrive highly qualified (with a 46.4% higher close rate than from other lead sources) which cuts down the amount of time and effort needed from your sales team. 

Limitations of digital retailing 

No solution is without tradeoffs or limitations, of course. Bear these points in mind before you move forward: 

  • Not all customers are comfortable with the digital retailing process. On-site sales still make up the vast majority of vehicle purchases. While online sales are growing, don’t force anyone to use the digital retail option if they don’t want to. 
  • Digital retailing may not be the best option for BEVs yet. Surprisingly, BEV buyers report lower satisfaction with the online retail experience than internal combustion buyers. This is likely because more buyer education is needed for BEVs, which have different needs, such as tire and maintenance requirements. 
  • Regulatory issues: There are often new legal issues to consider when implementing a digital retailing option, such as data privacy concerns. 
  • Additional employee training: employees who have established themselves as in-person sales experts might need additional training for a hybrid digital model. Across the team, your employees will need to understand how a digital retail setup can improve their results and build better customer relationships. 

With these limitations in mind, let’s review some basic requirements for getting your digital retailing option started. 

Implementing digital retailing at your dealership 

A full digital retail strategy is beyond the scope of this article, but to get you started, here are some capabilities and features you should consider including:  

  • Search function for customers to find a specific car 
  • Estimates for a car’s trade-in value 
  • Transparency for monthly payments (based on money down, terms, dealership inventory, etc), including all applicable incentives, taxes, and fees 
  • Appointment and delivery scheduling 
  • Seamless transition to in-store purchase, so they can pick up where they left off 
  • Allowing buyers to make deposits to reserve a vehicle 
  • Financing and credit applications 
  • Offering additional F&I products, including real-time F&I upsells throughout the shopping process (not just at the end) 
  • Dealer-facing portal to see what customers explored online

These are just some starting points to creating a comprehensive digital shopping experience for your customers. A great digital retail portal will lead to more satisfied customers, a more efficient sales team, and better customer retention. 

Sometimes a great buying experience isn’t enough to keep customers coming back for service, however. With less time spent at your dealership, you’ll need to be more intentional about creating the sort of relationship that gets customers coming back for service. Discover how in our free Sales-to-Service Handoff Checklist. 

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