In the early era of digital auto retailing, circa late 1990s, dealers tried to get shoppers offline and on the phone, ASAP, to book in-store appointments with salespeople.

The internet was merely a warm-up act for the main event at the showroom.

That was then.

“Those days are done,” says Jade Terreberry, senior director-strategic planning and business development for Cox Automotive, a provider of digital services to the auto industry and its consumers.

The essence of using the internet to sell cars has changed dramatically because of modern technological tools and habits developed in early 2020 when the COVID-19 pandemic had made its way to the U.S.

Now, most car buyers rely on the internet to varying degrees to shop and research inventory, get prices, arrange financing and even do most of the F&I paperwork. Afterward, they head to the dealership to take possession of their new cars.

Some car buyers conduct their entire buying experience online, but not many.*

Modern technology allows dealers to track where consumers are in the buying process. The technology also allows shoppers to interact with dealership staffers – online or off – throughout their purchase journeys.

Whatever the online-in-store combinations, digital auto retailing is big and getting bigger.

All-Time High Customer Satisfaction

“We’ve seen it in all our research,” Terreberry tells WardsAuto. “It’s huge. It’s grown so much over the years. We believe that’s because a good, connected experience enhances customer satisfaction. For dealers today, that’s at an all-time high of 81%.”

Jack Fitzgerald, founder of the 12-store Fitzgerald Auto Mall dealer group that represents 20 brands in Maryland, Pennsylvania and Florida, says demographic shifts are on the side of the growth of online car buying.  

“Young people grew up with the internet; older people, like me, didn’t,” says Fitzgerald, who founded the Bethesda, MD-based group in 1966. As internet nativists proliferate, “we’ll probably reach a point where just about everyone uses the internet to buy cars.”

But he’s doubtful A-to-Z online car purchases will become mainstream. “Most people want to see, touch and test drive a vehicle before buying it,” Fitzgerald says.     

A strong draw to online car shopping is that it makes the user feel in charge of the process, even if they aren’t, say dealers. At least not fully.

The retailer shouldn’t bow out completely by giving all control to the consumer. It doesn’t work that way. Anywhere. Sellers, not consumers, price products.

Still, “When you give the consumer control, they feel like they are buying rather than being sold to,” Terreberry says.

And when an online user asks the dealership questions and gets satisfactory answers, it builds trust pre-dealership visit, studies indicate.

The growth of auto retailing stems largely from advancing technology that offers tools with greater functionality. That contrasts with the early days of dealer websites that resembled static sales brochures.

According to Cox Automotive’s Car Buyer Journey study, 43% of recent car buyers used an omnichannel approach. About 70% of polled consumers said they are likely to use that method to buy a car in the future.

That means more than 7 out of 10 shoppers will use multiple channels – online, in-store or a combination thereof.  

With the system tracking consumers’ online activities, salespeople know what a customer has done online – and pick it up from there when the shopper ultimately arrives at the dealership.

That’s one reason Cox Automotive presented Retail360. The data-driven software targeting can identify serious buyers and personalize their shopping experience. It lets dealerships know which shoppers will likely close and when.

Best Practices

“More information is at consumers’ fingertips,” Terreberry says. “The steps are getting the right consumer to the right car with the right message at the right time.”

She offers best practices for dealerships to fully leverage the power of digital and turn shoppers into buyers.

Those include offering inventory at competitive prices and responding to online customer communications quickly. “Make sure customer-facing staffers are using tools to know where the shopper is in the process,” Terreberry says.

Despite advancements in digital auto retailing, the in-store “dealership experience” is sticking around. Why?

“Because consumers want it,” she says.

Terreberry contends dealer interest (and investments) in digital auto retailing continue to grow because they find it increases profits.

Today’s technology has made the dealership’s job easier, with the online customer educating themselves more fully.