Dealing with Digital Disruption: How to Make Digital Retail Work for your Dealership

Over the last few years, a combination of advancing technology and changing consumer behavior driven by the pandemic have pushed digital retail to the front of the pack of potential disruptors in the auto industry. OEMs from Tesla to Ford are embracing digital retail, but many dealers are struggling with the new landscape. 

To get some perspectives that might help, I recently spoke with Lindsay Ciavattone, CarGurus’ Director of Dealer Relations for digital retail. With a background working at dealerships and an eye on the next generation of digital retail tools for dealers, she’s uniquely positioned to share insights on where digital retail is now, how dealers can choose the right solution, and what you need to do to get the most out of it.

Jeremy Sacco: We’ve all been hearing about digital retail for years, and adoption has been slow to catch on. What makes this the time for digital retail to disrupt the old shopping models?

Lindsay Ciavattone: Digital retail is disrupting the industry today because the customer is demanding a new experience. Until now, dealers determined the process, and customers had to go along with it. Now, with the increasing level of choice and availability online, and nationwide competition, dealers need to find a way to meet these new customer needs and provide the experience they want. Dealers need to disrupt themselves to serve the customer – before they get disrupted by somebody else.

JS: We know that change isn't easy for some dealers, and incorporating digital retail is a significant change. What adjustments do dealers have to make to make sure they're getting the most out of digital retail?

LC: Dealers need to understand first that a digital retail tool is just that: one tool in the toolbelt. It’s only as effective as the customer input and how the dealer personnel respond. Some think it’s a magic tool, that it’ll do everything for them, and essentially sell the cars in some new way – and of course that’s not true. 

It’s also important to put a consistent lead flow and communications process in place – one that’s simple and holds people accountable. Whether you have one store or 100, process is critical, so your customers and your employees have a similar experience across the board. A great process means you can:

• Consistently move deals forward – you're not going back to ask questions you already have answers to in your CRM.
• Focus on removing obstacles that prevent sellers from doing their jobs.
• Act quickly – customers today expect fast responses, especially for sensitive information like credit applications.
• Provide a holistic approach to customer communications – phone, video, texting, however the customer wants to engage. 

JS: We know that 'one size fits all' never works for dealers - or for shoppers, for that matter. But sometimes it seems like digital retail is implemented in ways that force both dealers and consumers down a narrow path. How can dealers make sure they have choices when implementing digital retail? And that they're providing options to their consumers? 

LC: The first step of your due diligence when evaluating a new tool is to make sure the vendor can align with your values, your goals, your corporate structure or individual style – that they can work with you to meet your individual needs. Dealers should choose a vendor who can be their partner and work closely with them, and who can be flexible on implementation – including the ability to add or remove certain features to match your goals, as well as flexibility around integration with other systems.

If it’s your first venture into digital retail, it’s important to take baby steps. A staggered rollout, for example: if you have several rooftops, get your digital retail footing in one, then roll it out to more stores. That approach helps if you have employees who may not be excited about new tools – when they see other stores have had success, they’ll be more eager to get on board.

JS: If you were a dealer shopping for a digital retail solution today, what would you look for? 

LC: A seamless integration with the lowest level of effort. It’s easy to say that, but not easy to find in practice – I'd look for a company that would work with me in a transparent way, that was quick to troubleshoot if necessary, and that provided all the support I needed to get up and running. 

The tool itself should be as frictionless as possible, allowing customers to choose which steps of the buying process they do or don’t want to do online. Some customers are comfortable going all the way to putting in a deposit or a credit app, while others are less comfortable and just want to get through finding the right car and booking an appointment, so look for that flexibility. 

Finally, as I mentioned above, you want flexibility on your side as well – in which features you implement and how you integrate with your existing systems so you’re able to create that seamless process from start to finish.

JS: You’ve touched on that integration piece a couple of times. Can you give a little more detail on how a digital retail tool should connect with existing systems? 

LC: If you walk into any dealership and take a look at the F&I manager or any salesperson’s computer, you’ll see 27 tabs open: OEM tools, CRM tools, inventory management, accessories, parts, financing, all kinds of things. A digital retail tool that simply drops customer information into existing dealer systems is ideal – that’s one less thing to open, to learn, to get running. I’ve talked to many, many dealers who are unwilling to work with a partner that requires dealers to use a new system, and I can completely understand that from my past experience working in dealerships. Ultimately, success will come from integrating a digital retail tool that fits into the flow of what you’re already using and allows you to maintain control of the sale.