Today, we continue our discussion of digital retail, this time from an OEM perspective. Suppose you work for Morris Motor Finance and you want to get in on the fun. The most straightforward way is to subsidize your dealers’ use of a storefront. Simply negotiate a discount with one of the leading vendors and supply it to dealers who meet their penetration goals. You may already have programs like this, encouraging dealers’ use of a credit system or a menu.
In addition, you may want to add digital retail capabilities to your tier one website. This is a bit of a balancing act. The customer is here to see the full range of vehicles and accessories, along with your financing options and Morris branded protection products. Once you make the turnover to a specific dealer, the selection will be limited.
So, either you drop downfunnel straightaway, like ShopClickDrive, and the customer is only looking at one dealer’s inventory, or you run the risk of promoting something that a specific dealer doesn’t have.
Another conundrum involves the display of pricing online. Dealers have gotten used to the idea of disclosing MSRP for vehicles, and maybe finance rates, but there is still resistance to online MSRP for products.
I don’t need to tell you how to handle the Morris Motors dealer council, but you might want to assert a division of labor. Your site is higher in the purchase funnel, where 22% of new car buyers will start their journey, and serving a different purpose. Now let’s consider the six canonical tasks:
Six Key Tasks for Digital Retail
- Choose a vehicle – The customer is not choosing a specific vehicle from inventory, but a generic new vehicle by model and trim, or a build vehicle. This is also the time to upsell accessories.
- Price the vehicle – Using MSRP simplifies the design, but it also impairs accuracy. If the price changes, the dealer may recalculate the deal with his own desking system.
- Price protection products – Show products before structuring the deal, because they will be financed, and you don’t want the customer fixed on a payment that doesn’t include products.
- Value the trade – In this scenario, I would recommend a simple KBB lookup with the customer choosing “good” condition from a list, assuming that it will be revised in the dealership anyway.
- Structure the deal – The goal here is basically to choose lease or retail and promote your offerings, plus any incentives. Unlike the dealer’s desking system, you don’t need to be penny perfect.
- Organize financing – Obviously, you want first crack at the credit apps, and then you need an interface so you can feed the result into your dealer’s credit system. Send your declines, too.
Lastly, the customer will save the deal and transmit it to their chosen dealer. It is really more of a “lead” than a deal, at this point, and you have a “lite” version of the digital storefronts we have been discussing. I toss out the interface thing lightly, because this is my specialty, but you will have to choose whether to work with Route One, VinSolutions, Dealer Socket, etc. Back to the dealer council…
One thought on “Tier One Digital Storefront”
Mark – This is a good blog. As a part of your blog you discussed providing pricing on F&I products as the customer is shopping. If F&I products are being listed and there is no price – it can leave the customers wondering why there is no price. What if a customer was shopping for a car and was not able to get a price? Most likely that would result in that dealer no longer being a part of the customers consideration set.