Welcome to another edition of the Car Dealership Guy Podcast Recap newsletter—the key lessons from top operators, founders, and execs shaping the future of auto retail.
Today’s guest is Jessica Stafford, SVP Consumer Solutions at Cox Automotive.
Together, we discuss how car buying behavior is evolving, what omnichannel really means, and reveals the data on what's actually driving dealership profitability.
The big shift—why omnichannel dealers are winning, and fragmented stores are falling behind
Data insights are becoming more valuable than data collection itself.
With massive amounts of consumer interaction data available across digital platforms, the challenge has shifted from gathering information to extracting actionable intelligence.
"There's all…this information coming at us. How many times a day do you hear the word data, right? We're all obsessed with the data. What do you do with the data? How do you derive insights and automation from the data? And so…, what I'm thinking about every day is how do we leverage that data to…transform the way our industry works?"
The automotive industry's focus is moving toward creating predictive insights that help dealers, manufacturers, and lenders improve customer experiences and build lasting relationships.
Digital retailing has evolved tremendously over the past decade.
Digital retail now encompasses digitizing the retailing experience no matter where that happens.
"It's not just a widget on a website anymore. We've digitized the end-to-end experience. So, what dealers should be thinking about is how that's transformed into a connected…omni-channel experience…Consumers want to be able to shop and buy from online to in-store to a combination of the two. And it's not linear either."
The way people buy vehicles has changed significantly—with 90% of consumers not even making contact with a dealer during their car shopping process, before they set foot in a dealership.
The growing number of digital retail tools empowers dealerships.
Previously, the mode of operation has been—when a customer comes into a dealership to test drive a car, do whatever you can to make the sale.
"Nowadays, we've got these tools where you can allow a consumer to go home. You can send them a link to finish their deal at home on their couch. You can send them a credit app."
Today, dealerships can engage consumers in several parts of the process before they step in the showroom.
An 'omnichannel' approach to the process is key in the shifting market.
The idea of doing the shop to buy experience or completely online is the outlier now.
"Car shopping and buying has always been multi-channel. Maybe I drove by the car dealership. Maybe I did research…looking at classifieds in a newspaper…There have always been these channels, and we worked hard to optimize them. Even the original digital retailing…was optimizing the digital part of this process."
Modern-day retailing connects all those experiences via an "omnichannel" approach that streamlines the car-buying process in an efficient and seamless way.
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Omnichannel dealers are achieving 67% higher gross profits and 80% better close rates.
Dealers that are leaning into the omnichannel approach are having huge success.
"They're seeing 67 % positive impact on gross profit. I mean, significant. Their close rates are nearly 80% higher than just normal leads that you're not working in that omnichannel way. And then one of the pieces that we really study…is employee experience…We've seen 79 % of our customers say that this positively impacts employee satisfaction…"
Dealerships connecting all of those tools together, you're seeing a dramatic impact on your bottom line.
Creating a true omnichannel approach to the business is a process.
Team training is the first step to creating a successful omnichannel buying experience.
"Make sure your dealership staff understands that when you get a consumer…in the physical door—if they've submitted a lead or they've given you any information ahead of time, open up your CRM, look at that information, and start there. Don't start with the, 'tell me about why you're here. What can I help you do?'"
A lot of dealers aren't doing that because they're not as coordinated between the different departments within their store or somebody who walks in the front door.
Technology integration requires systematic coordination across all departments.
Successfully implementing omnichannel experiences means connecting disparate systems and ensuring data flows seamlessly between online and offline interactions.
"Dealers are using a ton of different tools. We see they're using four, five, six different software tools within the store, let alone even just within the F &I area. And so the idea here is that we're creating this intelligence layer that connects it all."
The challenge isn't just having the right tools, but ensuring they work together to create a unified customer experience across all touchpoints.
Superior customer experiences are multiplying long-term business value.
The experience—from the very beginning of the process—plays a huge role in helping to establish consumer loyalty.
"…if a consumer had a good experience and they're satisfied with the experience in the buying side, they're four and a half times more likely to post about it on social media, to talk to their friends about it. They're three times more likely to recommend you to one of their friends. And they're three and a half times more likely to buy from you again."
The consumer loyalty gained from an effective omnichannel approach can prove hugely beneficial to a dealership's fixed ops.
Consumers are driving technology adoption faster than dealers.
Dealerships need to recognize that consumers often have higher expectations for technology integration than dealers realize.
"I read this stat…, I think it was 83% of consumers believe that AI is gonna make their car shopping and buying experience better…compared to 37% of dealers think that it's going to be critical to their success."
More consumers are coming to expect to be able to leverage new technologies to shop for cars and get transparent pricing—whereas dealers have been a little slower to adopt the technologies.
Improving ROI is driven by the right mix of tech and personal connection.
Leaning into consumer insights generated by AI and connecting the channel between online to in-store is key.
"Your biggest ROI is to create effectiveness in your process. A lot of dealers think that they want more leads, they want more at-bats,' right? And the reality is…, we want volume, we wanna drive volume to our customers, but we want the right at-bats.' We want qualified consumers that have done that process online, and they're gonna walk into the dealers, either virtual or physical showroom and they're gonna buy a car."
The insights are key.
