Software companies, startups bolster digital auto retailing tools

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LAcarGUY Family of Dealerships experimented with several vendors — Roadster, Modal, TagRail and Cox Automotive, among them — across its 12 stores in metro Los Angeles. In the early months of the pandemic when customers couldn’t go into stores, demand for digital retailing tools and remote delivery soared, and the group sold about 250 vehicles online.

“We really thought we were on to something, that we had cracked the code,” group owner Mike Sullivan said. “We hadn’t cracked it at all. COVID cracked the code.”

As soon as showrooms reopened, in-store sales returned to normal, and digital sales retreated to small numbers. Home deliveries fell off a cliff, said Brad Burlingham, vice president of marketing for the group. Still, the tools are trimming transaction time even for largely in-person sales. Even with less demand for online deals, LAcarGUY remains “all-in” on digital retailing, Burlingham said, and is working to determine which are the best tools and how to use them.

Certain car-buying steps are more important than others and should be part of digital retailing platforms, said Jon Sederstrom, managing director of strategic initiatives at J.D. Power. A purchase can’t happen without knowing the real price of a vehicle, for example. Digital retailing processes also should include trade-in valuations, loan or lease offers and online contracting, he said.

How these features get embedded in software depends a lot on the demands of dealership clients, several vendors said. Slow adoption of existing features reflects a marketplace that still relies heavily on in-person customer interactions at physical dealerships.

At RouteOne, dealership requests prompted the pull-ahead of a single signing ceremony step — a feature previously unnecessary in an environment where customers willingly entered the dealership to finish paperwork, said Amanda George, RouteOne’s senior vice president of product, customer solutions, integrations and marketing.

RouteOne and competitor Dealertrack both now offer the process. But “we didn’t think there was dealer demand this time last year,” George said.

Jenn Reid, vice president of strategic partnerships for Market Scan Information Systems, doesn’t have a uniform prescription for dealers seeking advice on the best software vendors or digital retailing platforms for their stores.

“The answer is always going to be, it depends,” Reid said. “What problem are you solving for?”

Some platforms offer more robust finance-and-insurance processes, while others excel at the customer interface, she said. Rapid developments in electronic signature technology and e-contracting last year shifted vendor skill sets during the crisis, as did an emphasis on messaging platforms for mobile-dependent consumers and videoconferencing features for remote F&I product presentations.

The changes benefited dealerships but didn’t fully address the vendor selection quandary. Most digital retailing platforms only thrive when there’s seamless integration with automaker systems or data providers, sources said. If the various pieces don’t work together, the dealer often must start the vetting process over.

At Beyer Auto, for instance, Altman said he discovered too late that one platform provider didn’t connect with the group’s F&I vendor. Such disconnects aren’t any less common even after the product acceleration prompted by the pandemic, Reid said.

“It’s important that you have the best solution. But you’ve got to balance that,” she said. “The odds that there’s going to be one dominant player like an Amazon in the near future is unlikely.”

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Saurabh Shukla

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