Digital retail will be key even beyond crisis

If dealerships haven't adopted a digital retailing process today, they will be at a disadvantage, some dealers say — and not just during a potential second coronavirus wave.

The benefits of accelerated digital retailing during the pandemic extend beyond insulating dealerships from the potential of renewed state restrictions on in-person vehicle sales to slow the spread of COVID-19, panelists said last week during Automotive News' Retail Forum: Dealer Discussions video series.

Online and virtual processes also can increase efficiency at the dealership, boost productivity — especially for stores running with fewer employees — and improve the experience for customers who want the convenience and ease of shopping from home.

Not all consumers will want to complete a transaction online from end to end, said Mike Darrow, CEO of vehicle listings company TrueCar. But bringing more pieces of the sale online will allow dealerships to cultivate a deeper connection with customers "wherever they are in the buying process."

"Pricing transparency's always going to be important, but we think as you add value in other pieces of the experience, dealers will see better results at retail from that," Darrow added.

Many dealership leaders say virtual transactions and remote deliveries have yielded positive results during the pandemic, including more sales per employee.

"We're actually closing the stores earlier than we were before. So we're selling more cars with fewer people in less time, and everybody's winning," said John Malishenko, COO of Germain Automotive Group, with dealerships in Ohio, Michigan and Florida. The group created an umbrella brand, Germain to You, to house the company's virtual offerings.

Customers "love the process. It's faster and easier than it's ever been, and the house is winning, too," said Malishenko, noting that the dealership group had its best-ever month in June.

As digital options increase, panelists said, it may be time for dealers to have conversations with their automaker partners about how retail will need to evolve, from the size of physical showrooms to the software products that enable online retailing.

Dealerships often use multiple tools and getting them to interact is not always seamless, panelists said.

"We need systems that work together," said Adam Arens, CEO of Patriot Auto Group in Saco, Maine. "I don't need the best system in the world. I need one that makes my people more efficient, or keeps them from being inefficient, from reentering data, from going back and forth."

Mahesh Shah, chief product and technology officer for CDK Global Inc., said the dealership technology vendor is focused on back-end upgrades to enable smoother integrations that cater to dealerships' individual processes.

"Technology is one of the things we have to improve," Shah said. "We've got to make sure that [tools] talk to each other more effectively across the online experience, as well as the store experience."

Beyond technology, dealers that still have reservations must overcome them, said Kevin Frye, e-commerce director for Jeff Wyler Automotive Family, with dealerships in Ohio, Kentucky and Indiana.

"Many dealers feel threatened by digital retailing: 'Will I still have a place in the future with this? Will I be giving away my gross?' " Frye said. "What happened this spring was more people were put into a situation that even if they didn't support it, they had to embrace it."