2020 brings a few widely-used words to mind: pivot and unprecedented. For those of us in the automotive space, the buzzword for the year has been digital retailing.
In the first Kijiji Autos DealerTalk series event of 2020, FlexDealer’s CEO and host of The Dealer Playbook Podcast, Michael Cirillo, sat down with David Kain of Kain Automotive and a wealth of eager automotive professionals to talk shop and get creative with the concept of digital retailing. Below, you’ll find the major topics discussed during the event.
The old saying goes: “When the student is ready, the teacher arrives.”
Everyone at Thursday’s event self-selected as a student, which allows the teacher to help them learn. The teacher could be seen as our hosts, the events we’ve seen unfold so far this year, or could even be the experiences other professionals have had attempting new strategies.
Looking at Kain’s example of Ford Direct, he pointed out that as an industry, we know people love to buy cars. People have been purchasing vehicles for years, despite how they may feel about the purchase process. A vehicle is an exciting purchase, and a large one: people love that new car feeling.
As one of the co-founders of Ford Direct, Kain and his team created a platform for digital retailing in 2000. This concept was ahead of the curve, and perhaps too advanced for its time. This platform gave Ford dealerships the ability to buy a lead or buy a shrink-wrapped deal: easy, right?
Wrong. At that point in time, if you wanted to get leads from Ford Direct, they would be sent digitally, but yet dealers wanted them via fax. Thankfully, it’s safe to say the response of digital took a dominant role, not fax.
The market wasn’t ready for this advanced online purchasing system at that specific time. Consumers weren’t ready to take advantage of digital retailing and this humbled the platform. They had to take a step back and determine how to move the market, how to meet it where it was at.
Consumers were always able to reach out to the dealer for finance information, test drives, and other information, but the introduction of digital retailing smooths about this process, making it easier for customers to serve themselves and find customized answers online.
There are over 35 automotive digital retailing platforms on the net right now. This poses the question: do the consumers want to serve themselves? We sure think so!
When people think about selling vehicles online, CarVana seems to be the first thing that comes to mind.
The model of CarVana has set a unique precedent for how digital retailing could look. The concept of the car vending machine seems fully self-serve, but as Cirillo and Kain pointed out: in reality, there is a team and business process behind building the deals, marketing the vehicle vending machine, getting approved for the vehicle’s financing, helping them to understand delivery, and ultimately winning the business.
You don’t need the vending machine itself to be successful with digital retailing, and you probably already have the resources that you need to streamline the experience.
In Kain’s experience with digital retailing companies, they believe that they can tell from the first conversation that they have at any dealership if digital retailing is going to be a success for them.
The first conversation with the dealer principal or general manager at a given dealership often dictates how successful the initiative will be. The level of enthusiasm and commitment, to work the process and to see success matters. Belief in the process matters, and the selection of a dealer champion to champion the integration effort is a key indicator of success.
This mirrors positive psychology concepts discussed in The Happiness Advantage by psychologist Shawn Achor. To put it simply, the concept of the happiness advantage is that the more positive we are about a certain effort or scenario, the more likely we are to work hard for it to be successful and to actually see it as a success.
That makes sense, even in a dealership situation.
People will buy when they like, listen to, and trust their product advisor. People will commit to digital retailing if they like the idea, listen to the logic, and trust that it will work.
CarVana is likeable, it listens, and guests trust it. Dealerships can have this same impact.
What is your dealership doing to make that impact?
What is an appropriate price for a digital retailing solution?
In Kain’s opinion, the price of the website SHOULD include a digital retailing solution, but the industry isn’t quite there yet. Digital retailing tools are (mostly) add-ons and that is where it becomes more complex. Beyond just having access to the tools, the level of service available for digital retailing solutions varies, posing questions such as: do you want it managed or do you want to manage it at the dealership?
Kain’s suggested price range for digital retailing solutions $1500-3000 USD per month, outside of website and third-party applications.
What is digital retail, exactly? Do I need it?
Digital retailing is essentially building a new department on the website that allows for consumers to have a streamlined experience. This means that they can select inventory, view payment options, find their trade value, arrange true financing, and set delivery at home or the dealership.
You can get all of this on most websites, but it’s about setting it up in a clean way that makes the experience more autonomous. The experts see it almost like we are adding a new department to the dealership. Right now, it’s a separate tool that is added onto most sites, or multiple tools. The goal is to brand and use these tools to create a full purchase environment and experience for vehicle shoppers: all online.
Need is in the eye of the beholder, but as more and more dealers successfully implement digital retailing solutions, it seems only logical that those who refuse to will naturally fall behind.
Don’t I already do all of that on my site?
Yes, we have all of those tools available to us. The difference, and the point of digital retailing is to do so with less intervention on the dealer’s part, and ultimately a self-service model for consumers that are willing and ready to serve themselves.
The average consumer might not be ready because they only buy a new car every 3-4 years, but each time that they do, they likely will become more familiar and comfortable with a more digitally-based journey: just like self-scanning at the grocery store.
As digital retailing grows, will there be more involvement with agencies or will there be a bigger change in BDC departments in-house?
Cirillo shared that the balance of agencies and dealerships will remain similar. Agencies pursue specialization in a specific area of work, and digital retailing solutions as marketing tools are a specific area of work.
Dealers get put in buckets and have a lot of “should-do” tasks thrust upon them. A unique thing to consider: we all have our own definitions of success, and so do all individual dealership employees. You need to be passionate or get passionate about what you’re doing for it to be successful or specialized.
Hiring for your weaknesses is important so that you can get the most of your efforts across your website, and this is where agencies shine in the world of automotive. Agencies help dealerships with their own unique set of skills (such as repairing vehicles and selling new ones) to see success in other realms like digital marketing.
What should a BDC really mean, and what should one do?
Kain expanded the lens on BDCs. Business development activities are the heart of a business development centre. A BDC is an ecosystem to bring customers in, and back in. To win more business. A BDC is a loyalty system and a lead generation system.
It’s easy to encounter a salesperson who wants to only be on the floor and closing deals, not finding the people to show up on the floor. Today’s consumer is looking for one person to trust all the way through the process, not be passed along from one to the next.
Business development culture needs to spread across the dealership to create that ideal buying environment for today’s consumer.
Cirillo brought into the discussion: the concept of a revenue team like we have here at FlexDealer. An agency isn’t BestBuy and neither is a dealership. We both need people who can develop business opportunities, new products, new ideas, new approaches to winning business. We need to have an understanding of how the departments and products work together. This mirrors the concept of a selling organization: all other roles support sales in some way, even though they aren’t selling - they know the end goal and how their role can cater to achieving that.
An example of business development from the point of contact:
If you’re responding to a lead from your website or Kijiji, from a strategic deployment strategy: send them their deal. If the prospect is interested in a F-150 and wants a quote, you can send them a quote or you can send them their deal.
If you can present a deal you get to know your customer better. The shopper will go into the deal and add a trade value, do a credit application, change the payments, etc. People engage with these tools and it allows dealers to serve them better. You can view what they’re doing while they essentially set up their deal for you.
Will the role of the traditional salesperson in the dealership change with digital retailing?
It is changing.
A dealership that Kain personally worked with had a manager who told him not to talk to a veteran salesperson that didn’t want anything to do with tech.
That’s the wrong approach. Kain suggests removing the internal bias that we can push through because you have an obligation to make your employees technically proficient at their job.
Kain spent time with this non-technical salesperson and got to a breakthrough point where he understood how technology can help his business. The next time that Kain came back, this staff member (70 y/o) became reliant on technology, using the channels available to him: once he understood it. He was upset when his computer was having issues because he realized how helpful it was for him in generating business.
Put the rocket on their back and allow them to succeed using technology. It’s a new definition of an old role: a lot of dealership owners struggle with this against employees that don’t want to change their ways, and this is where head-first leadership is important. You need to ensure that people are bought-in to the mission: not being dictated to.
Ultimately, there needs to be a level of willingness within each team member for this to work. Is your team ready to blast off? Blast your team into the next Kijiji Autos DealerTalk session on DATE at TIME. To get strategic before then, chat with our trusted team of experts here at FlexDealer.