Innovative auto dealers and retailers are keen to deliver the new purchase experience consumers want, and the technologies needed are now sophisticated enough to make it a reality. - IMAGE:...

Innovative auto dealers and retailers are keen to deliver the new purchase experience consumers want, and the technologies needed are now sophisticated enough to make it a reality. 


Automotive retail is in the midst of a profound revolution — one that is poised to fundamentally transform our industry for the better. Like most revolutions, this one has been inspired by peoples’ desire for a new and better experience and is fueled by the rapid evolution of technology.

The seismic changes taking place in auto retail are part of the broader tectonic shifts underway in the industry. Every day, artificial intelligence (AI) and LIDAR advancements are inching us closer to truly autonomous vehicles, and mobile and cloud technologies have helped ride-hailing companies such as Uber and Lyft transform how millions of people consume transportation.

Though the trends are powered by myriad economic forces, they all share common foundations — they are motivated by an improved user experience and enabled by digital technologies.

Inarguably, auto retail is somewhat late to the party. Largely due to the COVID pandemic and the changes in consumer sentiment and demand, the digital retail transformation is now decidedly underway, and our industry will never be the same.

Innovative auto dealers and retailers are keen to deliver the new purchase experience consumers want, and the technologies needed are now sophisticated enough to make it a reality. Let’s dive into what these technologies are, and how they will impact our sector.

Personalization at Scale

The process of selling an automobile has always been a personal one, which the most successful retailers have always known. Great sales teams have always conducted the fact-finding and discovery needed to personalize the experience. They study the trends and preferences in their market, understand the specific preferences of different customer demographics, and ask prospects the right questions:

  • What did you like most about your last vehicle? 
  • What did you dislike?
  • What kind of driving do you typically do? 
  • How long do you typically keep your vehicles?
  • Do you like taking long road trips?
  • Would this feature be helpful to you?

This method works because it tailors the experience. Unfortunately, it doesn't scale. Given the complexity of an auto purchase — each customer has to find the right vehicle, understand and select add-ons and upgrades, secure and select financing, negotiate a vehicle trade-in, sign the paperwork, and schedule delivery/pickup — creating the personal experience that drives greater volume and profitability has been understandably limited by the size and talent of the dealer’s sales and F&I teams, and their hours of operation. These have been the primary bottlenecks to dealer growth and scale— until now.

The most advanced digital retail technologies can now provide each prospect a hyper-personalized experience, empower them with more control over the purchase process, and dramatically streamline the many steps involved — all leading to more satisfied customers, more transactions, and greater dealer profitability. It’s a win-win. Let’s follow those steps noted earlier and discuss how the right technology can turbo-charge them. 

  • Finding the Right Vehicle: With the right website technology in place, the customer can review dealer inventory in high-definition, online, 24/7. When integrated with the dealer’s inventory-management system, it can provide vehicle walkthroughs with ultra-definition, virtual test drives, and all of the relevant details and stats on the vehicle. It can even leverage third-party market data services to prominently display vehicles more likely to appeal to the specific customer, as well as ask questions about personal preferences and driving habits in order to recommend potential matches. Then, dealers can go even further by offering an online buying process with the right digital retailing technology.
  • Selecting Add-Ons & Options: When the prospect finds their ideal vehicle, the right ecommerce technology can begin the education process on F&I products seamlessly. Customers can be guided through a series of intuitive, educational screens and videos explaining the value, virtue, and price of various add-ons, and select them with a click. The best solutions enable dealers to introduce the F&I experience at any point, as well as throughout, the online purchase process. And, when customers have the opportunity to learn about their options earlier in the process, and F&I managers present a full menu at the end of the purchase process, studies have shown increased F&I penetration, and ultimately, greater per-vehicle profitability. 
  • Securing & Selecting Financing: Many auto ecommerce solutions let customers select their purchase options (lease, one-time payment, or financing), estimate their payments, and review potential financing offers. However, the best ones actually empower customers to apply for, receive, and select confirmed financing offers online, in real-time. Securely integrated with the dealer’s financial service providers, digital retail solutions can now provide a 100% online, end-to-end experience.
  • Managing a Vehicle Trade-In: A critical component of many purchases, trade-ins can now be managed completely online as part of the digital experience. Well, everything except dropping off the car, or having it picked up. The best digital solutions enable customers to get an estimated trade-in value, as well as let them upload pictures of the vehicle, VINs, and other relevant details and documentation — and receive a confirmed offer without leaving their couch. 
  • Scheduling Deliver/Pickup and Signing the Paperwork: These final steps in the process are now enabled digitally by the best solutions on the market, which can integrate seamlessly with the dealer’s existing scheduling and document-management systems. Customers can conveniently select a convenient day and time for pickup or delivery, and then securely and digitally sign all the requisite paperwork, allowed by law, to finalize the transaction. 

Digital Retail Success: Essential Characteristics 

Fortunately, there are many excellent tech solutions available to help dealers effectively digitize the entire vehicle purchase process, which is a win for dealers and customers, alike. Based upon studies Modal has conducted, the average digital purchase takes three hours less than a traditional transaction, which customers unsurprisingly love.

But, to take full advantage of the emerging demand for digital retail, dealers should be sure to look out for some key capabilities: 

First and foremost, make sure the solution is flexible enough to give each customer control over how and where they begin their journey. Some may want to start by reviewing available inventory, some may want to calculate the payments they can afford, while others may want to get a value on their trade-in first. The most successful tools enable this flexibility, and wherever the customer begins, it intelligently captures their progress so they can pick up later where they left off. 

The right solution should be rapid to deploy, integrate seamlessly with the dealer’s existing systems and operations, and offer an exceptional user experience on any digital device. The best ecommerce technologies can integrate natively with a dealer’s existing website(s); securely communicate with their CRM, DMS, finance, and marketing solutions; and can be accessed via desktop, tablet, and mobile devices.

And finally, it’s essential that the digital retail solution complements and supports your existing operations and teams. If a customer begins the purchase process online, then decides to visit the dealership in-person at any point, showroom staff should be able to pick up the conversation precisely where the ecommerce experience left off, with all of the information the customer initially provided. This means leveraging a tool that provides dealer teams with real-time in-store access to granular detail about every online prospect and partial order. 

The digital transformation now underway in auto retail will be won by the dealers — and their teams — that can take full advantage of cutting-edge technologies to leapfrog their competition. With the right digital strategy and tooling, sales teams can hit their numbers faster and increase throughput, desk managers can maximize PVR and product uptake, and management can boost sales volume, profitability, and customer satisfaction. The future of auto retail is now, and ready for the taking. 

Matt Weinberg is senior vice president of consumer experience for Modal, which provides e-commerce solutions for leading global automotive dealers and brands.

Originally posted on F&I and Showroom