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Is Your Digital Retail Plan Sporting a Mullet?

sporting a mullet

Is Your Digital Retail Plan Sporting a Mullet?

Digital transformation has changed the way automotive dealerships conduct business. The product-centric model is obsolete- having been replaced by a customer-centric sales model.

From the service drive to the front office, digital transformation has improved efficiencies, scaled operations, and managed facilities.  

While many car dealers have adopted digital transformation at their stores, there’s still some reluctance to jump into digital retail – a subset of digital transformation. Some fear transparency; others just want to wait. 

But why wait?

Reasons For Reluctance

Why are some dealers still skeptical when it comes to automotive digital retail? Let’s examine each objection.

  1. It requires a culture shift. 

Yes, digital retailing at a franchise dealership requires a culture shift. However, these stores have already made a significant culture shift from a standard website and DMS to cloud-based CRMs and inventory management technologies. These dealers are already innovative. Digital retail is an extension of digital transformation. It moves the vehicle purchase process online, where today’s customers are already shopping.

2. Operational and process changes require training.

Yes, there are training and process improvements, all of which help dealership sales teams close digitally-savvy customers. Peterson Toyota of Sarasota explains the effectiveness of operational and process changes and how the training and support they received helped their store transition effectively.

3. A perceived decline in gross profits, especially F&I.

Data shows that gross profit – especially F&I, actually INCREASES in a digital retail solution. This is in direct contrast to what many dealers assume. Because automotive dealers can bundle F&I products on a digital retail platform, this provides a greater opportunity for profitability. As shoppers enter the online sales funnel, they seamlessly add F&I products. Digital retail, done right, makes it easier to select the dealer’s aftermarket products, not harder. 

4. Too much price transparency.

Some car dealers object to having price transparency on their websites. They argue that salespeople should want to work the deal when a customer visits the showroom. Those days are over. Auto sales teams can still work a deal, but it starts online. Potential customers can find competitor vehicle pricing from multiple sources online. Since margins are small on new cars, why not give customers what they want? Transparency.

Digital Personalization 

Both new and used car dealers know that superior customer service drives incremental sales and significantly increase a customer’s lifetime value. 

But what’s really happening at the customer experience level? 

Dealerships need to not only engage but sell to digitally-savvy consumers demanding both improved purchase and car-ownership experiences. Today’s customers expect high levels of customer service, unconsciously comparing automotive dealerships to what they experience with Amazon and Apple.

Amazon is a fierce competitor of brick and mortar stores. They are the market disruptor leading the way in digital transformation. When Amazon subsidizes its e-commerce marketplace from other profitable lines of business, competition is squashed. 

Digital personalization requires that auto dealerships provide tangible value, offer transparency, and improved car shopping efficiency. In addition to competition from Amazon, there are many business models – like Carvana & Vroom, that tap at the doors of traditional dealerships. 

Digital Competition

The customer-centric model is happening online. Competitors are already there. Car dealerships that don’t accommodate digital shoppers will lose customers today and tomorrow.

The opportunity cost of not adopting a digital retail plan is disastrous. How much is lost to Carvana, CarMax, and other websites that have digital retail?

The majority of vehicle research is done online. Knowing this, it’s imperative to consider how well a dealership’s website fares in search results. If it ranks high, that’s great. But what happens when the digital shopper can’t purchase a car on the site? Where will they go? They will buy a vehicle from another dealership!

Check out Google analytics (GA) to learn where people abandon specific web pages. Google analytics, typically provided by website vendors, measures engagement levels, bounce rates, and user flow. These insights can improve a dealership’s website. 

Combined with a digital retail system, they can track the funnel of online visitors throughout the purchase process.

Website analytics will vary, but let’s break them down hypothetically. If you attract five more digital shoppers every month, what would that mean to the bottom line? How about 20-30 more customers each month? 

Digital competition is fierce and will increase over time as new disrupters enter the marketplace.  

Clip the Mullet 

scissors, digital retail, mullet


It’s time to rip off the bandaid, cut last century’s mullet, and take another step in the transformation to digital retail.

The entire car shopping experience can be handled online, except for the physical transfer of the vehicle. Coming into the dealership to test drive a car will not disappear anytime soon. The new car smell is a highly desirable interaction in the customer journey.

Digital business ecosystems are vital for dealer operations. The evolving interaction needs to also include digital personalization. Automotive dealers are competing with Amazon-trained shoppers who want convenience, efficiency, and transparency. And thanks to companies like Apple, online research, reviews, and peer recommendations play a significant role in shoppers’ buying habits. 

In this digital era, dealers focus on turning insightful customer data into actionable plans. Aligning digital shoppers with online retail technology transforms the relationship a car dealership has with its customers. 

Giving customers what they want in the shopping experience adds value to their touchpoints. For instance, being able to calculate an ideal monthly payment, evaluate a trade-in, get financing, and add aftermarket products will optimize the lifetime value of a customer.

Dealerships have to bridge two worlds and embrace the entire landscape of today’s digital shoppers. 

Profitability opportunities have shifted online where dealers can evolve with digital retail and include value in a seamless path to purchase- making the buying experience memorable. 

Check out how AutoFi can help dealerships make the changes needed to compete for digital shoppers. Schedule a demo today.