Keep it simple and seamless for customers

With three-plus decades in automotive retail, Ron Frey has seen technology offerings for dealers explode.

Frey in 1985 launched a credit union auto-buying service in the Northwest that was acquired by Autoland Inc., which in turn was bought by TrueCar in 2005. After a stint as TrueCar's CEO, Frey joined AutoNation Inc. and ran the AutoNation Direct online sales unit before rising to chief strategy officer.

He joined dealership software giant CDK Global in 2017 as global chief strategy officer and worked to position the dealership management system provider as an automotive commerce enabler, including with the launch of the Fortellis open development platform last year. Frey will leave his CDK role this summer but will continue as an outside adviser to the company.

Though he declined to talk about CDK, citing a confidentiality agreement, Frey, 53, spoke with Staff Reporter David Muller in a wide-ranging interview about the state of retail technology. Here are edited excerpts.
On digital retailing: It gets more airtime than it deserves. First of all, there's a lack of definition on what digital retailing really means in automotive. Does it mean five clicks and your vehicle's in a cart and you autopay? To the rest the world, that might be what it means. Does it mean we're trying to provide more information where consumers are shopping and help them speed up the process? Is it about transacting? Is it about shopping? If it's about shopping, it could be as simple as: How do I create price transparency and trade transparency and payments?

The challenge is that if you are not integrating into the processes that happen in the store, it is not digital retailing. It's just digital display. You have to fully integrate — and I mean really integrate, bidirectional — with lead management systems, [customer relationship management], DMS, websites, and it has to pull the right data. And if you fully are integrated into all those applications, just the cost of the integration and the bidirectional data exchange would make it prohibitive for a third party to really do it cost effectively. It starts to become a challenge. Otherwise, it's gimmicky.

On solving retail problems for consumers and dealers: You've got to solve simple problems that consumers want, like: Show me real cars, show me real prices, give me a seamless experience. Which doesn't mean I have to put everything in the cart.

If a dealer is going to do that, they also have to figure out ways to connect the dots through workflow [to] speed up the process, make it more seamless for the consumer and allow them to take cost out of the transaction.

If you don't think about it in that context, all you're going to do is either make empty promises online that the store can't fulfill because there's no connectivity, or you're going to layer on cost because I didn't change any of my in-store processes. Or I'm just going to take margin out of the business, which is going to further compress the challenges of the dealer, which is why you're not seeing it progress like auto retailers would like.

On the basics retailers should grasp around data: Start with managing my own business: What's my inventory? Days supply? Which one should I turn? How long does it take to get a used car through the sales process? What are my aging issues? How do I order more seamlessly? How do I manage my incentives? There's just the basic block-and-tackle management systems. It goes on and on and on. Once I get the systems connected, then I've got to think about how I use data and insights, both to manage and drive efficiencies and margin to my business. That's way more important than, can you, as a consumer, put a credit card payment on a car. That isn't the biggest problem for the consumer, [who] wants to know: How do I compare cars and prices, and what's my trade-in worth? Give me that. And then honor it when I get to the store.

On buying online vs. brick-and-mortar: My early background was building large brokerage services. So even prior to the Internet, we were delivering cars outside the dealer at scale, about 10,000 cars a year. They never touched the store. However, [shoppers] still touched the car before they're fully obligated to buy. They showed up at the credit union with the car parked there waiting. That made it better. The customer could drive the car. If it wasn't perfect, if it didn't meet their expectations, they didn't drive it home. And if they took it home, they had a three-day buyback guarantee on the car, no questions asked. Consumers are willing to do this if you give them the right protections. But we also provided them all the information so that they felt they're making an informed decision before they got there. People didn't mind going and picking up the car. Frankly, it put them in control, and consumers are more and more comfortable with it. It's actually fun. People should enjoy going to the store. You need to make it more seamless, easy and enjoyable, and take the gamesmanship out of it. Most retailers I meet want to do this. [They] just need tools and best practices to support it.