Vendors fast-track digital tools for dealers

The coronavirus-induced digital transformation of auto retailers has been helped along by some behind-the-scenes work from vendors.

The pandemic is spurring companies that build the software that powers dealerships' online business to accelerate their own capabilities. Some retail tech vendors shuffled product plans to prioritize new tools based on what dealerships said they needed for business. Others added features to existing products and offered them at reduced or no cost at the onset of the health emergency this spring.

The concepts go beyond digital retailing platforms, which many retailers hurried to deploy this year. Some offer solutions in other areas of sales and service, from virtual showrooms to contactless contracting.

Russ Lemmer, president and chief product officer of Dealerware, which helps dealerships manage their loaner-vehicle fleets, said the pandemic has forced his customers to adopt new ways of conducting business.

"In the last 10 weeks, they've been accelerated 10 years in terms of what they need," he said. "So now they are thirsting for all the right digital tools that can enable that."

Dealerware launched Contactless Contracting last month, allowing consumers to sign loaner contracts on their personal devices. The idea for the tool didn't exist until March, Lemmer said.

"We've actually put much more weight behind that because there's been bigger demand to respond to what I call the post-COVID marketplace," he said, adding, "We're never going back to what we all thought was normal."

Jon Yetter, service manager at Audi Mechanicsburg in Pennsylvania, is integrating Contactless Contracting into the dealership's routine. Yetter said customers who use the feature in the store spend more time reading contracts on their own mobile devices than they did on a store iPad.

"This is something that I would have used two years ago," Yetter said, adding that its benefits will last long after the pandemic is over. "It provides a layer of convenience for the consumer, as well as the dealership."

Tech providers should consider how a new tool fits into their core product strategies, said Marco Schnabl, CEO and co-founder of automotiveMastermind, which uses data to help dealerships with sales and marketing.

AutomotiveMastermind operated a virtual business development center for six weeks starting in April while dealership showrooms were closed under state orders to slow the spread of the coronavirus. The vendor's employees temporarily responded to leads on behalf of about 250 dealerships that had gone virtual or reduced their own staffs.

The virtual center placed about 21,000 prospecting phone calls and scheduled close to 1,900 sales appointments for participating retailers, according to automotiveMastermind.

The program wound down when stores recalled employees, Schnabl said. It fulfilled its role to support dealerships, but it won't be a long-term offering.

"We are a technology provider," he said. "We think that investing in that [tech] part of the business is probably the better long-term investment for us."

Schnabl said his company is working on updating its algorithm to target customers with pre-owned vehicle offers. It also is adding more digital communication channels, such as text messaging, to complement email and direct mail.

Prodigy, a digital retailing provider that aims to offer an omnichannel buying experience, launched a virtual showroom in May in response to coronavirus-related shutdowns, Prodigy CEO and co-founder Michia Rohrssen said this spring, before the product launched. A customer can connect one-on-one with a sales associate via live chat or video to explore vehicles, model payments and receive quotes.

A sales rep, using an iPad, "can really be the eyes and ears of the customer," Rohrssen said. "The whole goal is to allow the customer to feel like they're getting the exact same experience that they would in a dealership."

Initially, the virtual showroom concept was something Rohrssen said his team envisioned bringing to market next year. But the product is now installed at five rooftops, with five more in training, out of the company's more than 100 dealership customers, said Elliot Kolt, Prodigy's marketing director. More customers should be using it by the end of the third quarter.

The virtual showroom will be a core future product, Rohrssen said, in part because dealerships were caught off guard in the early days of the pandemic and will need digital tools on hand.

"Customers are going to be trained to know that this is available," he added. "You're setting consumer expectations that I don't think you can quickly walk backward from."