WardsAuto E-Dealer 100 List Reflects Power of Internet

The option of shopping for a vehicle online is not the novelty it once was. Just like power windows and air conditioning, it’s simply what one uses.  

The 18^th annual WardsAuto e-Dealer 100 reports 2017 Internet sales of 257,594 units – 148,562 new and 109,032 used. This represents incremental but steady growth from previous years and 2016, which saw 255,378 Internet sales consisting of 144,378 new and 111,000 used. (To see the complete list, click the "download" button at the bottom of the story.) 

This figure doesn’t come close to 2017’s record 17.1 million new vehicle sales and 39.2 million used car sales (according to Edmunds’ 2017 Used Vehicle Market Report), but it’s more than triple the 81,705 Internet sales reported on the WardsAuto e-Dealer 100 in 2002.

WardsAuto defines an Internet sale as one in which the initial customer contact is online and involves a dedicated Internet salesperson or call center.

Dealers are aided by a host of customer-directed websites, such as Autotrader, KBB, and Cars.com.

Automakers are involved, too. General Motors introduced Shop-Click-Drive in 2013, a web platform that lets prospects choose a specific vehicle, get estimated pricing, review incentives, apply for financing and get trade-in information.

“Dealers should not be afraid to go first,” says Mosley..

GM won’t divulge total sales attributed to Shop-Click-Drive, but said more than 3,100 of its approximately 4,000 dealers participate in the program.

Ford’s Ready.Shop.Go, which offers many of the same features as the GM plan, allows customers to lock in a deal for 48 hours and assigns customers a single point of contact at the dealership. Ford’s goal: less time for impatient customers to stew at the dealership. Ready.Shop.Go rolled out in the Midwest in March and Ford says it will be available nationwide by the end of 2018.

Hyundai new Shopper Assurance provides upfront pricing, online tools to complete paperwork and get pre-qualified, and schedule a test drive. Buyers can return their vehicles within three days for a full refund.

Online car shopping is not just a U.S. phenomenon.

In December, Ford and China’s Alibaba Group signed a letter of intent to “jointly explore areas of cooperation in connectivity, cloud computing, artificial intelligence, mobility services and digital marketing.” In March, Alibaba launched a Super Test-Drive Center in Guangzhou.

Users of Tmall, the company’s online shopping platform, can request a 3-day test drive from their smartphone or kiosks. Vehicles are dispensed from a multi-story “vending machine.”

Then there’s the 700-lb gorilla in the room. A flurry of news stories suggested Amazon was considering extending to the U.K. an arrangement similar to the one it has with Fiat in Italy that funnels prospects to dealerships.

Amazon is keeping tight-lipped about that possible extension. “We don’t sell cars on Amazon.com or Amazon.uk – and don’t comment on rumors or speculation,” Amazon spokeswoman Lori Torgerson tells WardsAuto.

A tour of the exhibit hall at the 2018 National Automobile Dealers Assn. convention in Las Vegas last month shows the breadth of companies featuring e-commerce tools, services and software.

“Shoppers have raised their expectations,” Schwartz says.

“Dealers should not be afraid to go first,” says Cory Mosley, company principal and chief strategist at consulting firm Mosley Automotive. “If you see a product or service or hear a strategy that could create a competitive advantage, don't be afraid of go for it.”

However, he warns, “after more than 20 years in this business, one thing I know for sure is that you just cannot apply technology for the sake of technology.”

At the NADA convention, Cox Automotive debuted Accelerate, a new digital retail platform that allows prospects to locate a car at a specific dealership, determine taxes and fees based upon their market, offer a price, apply incentives and specials, calculate a trade in value, consider F&I options and schedule a test drive, all online.

“The negotiation is the longest, most-frustrating part of a car purchase, and car shoppers have raised their expectations,” says Cox President Sandy Schwartz. “This year I believe we will see the very clear transition into the next phase of the Internet, where we will be buying a car, or at least negotiating for a car online – a fully connected retail experience that makes car buying better for both the consumer and the dealer. Our research shows people are ready for this. It’s the next phase.”

Despite the new technology, many dealers stay tuned to the basics.

“I don’t think there’s a magic wand,” says Tom Greene, general manager of Larry H. Miller Chrysler Dodge Jeep Ram in Boise, ID. “As we’ve learned at every digital seminar, you just try to do the little things right. Have a good response time and have good quality responses back. We always collaborate on new ideas to improve the Internet department. You have to have an Internet director who’s engaged, looks at the responses and coaches the team.”

The store ranks 49^th on this year’s WardsAuto e-Dealer 100 list with 1,065 new- and 542 used-vehicle Internet sales last year. Green says in some months 50% of sales originate from the web and his six-month average closing ratio is 16%. The store had 3,328 total unit sales in 2017.

Greene’s Internet director manages the dealership website, liaises with Larry H. Miller corporate staff, and helps with direct response and analytics. The sales manager coordinates the 9-person sales team as they work the deals.

No “magic wand,” says Greene of Larry H. Miller Chrysler Dodge Jeep Ram in Boise, ID.

“We get our salespeople from our competitors, people who want to be part of the Larry Miller group,” Greene says of the 64-store Utah-based dealership chain. “Our guys lobby to get on the Internet team because they see the level of success and they know there’s a good opportunity.”

Internet salespeople stay with their customers throughout the process. “We don’t want to turn them over to someone else,” Greene says. “People want to work with the guy they’ve been corresponding with. If we’ve done our job right, if they’ve established a good relationship by phone or by Internet correspondence, when the customer comes in and they meet that person, part of that wall is already taken down.”

Green says his dealership has had good luck with its third-party lead providers, Autotrader, Autobytel, TrueCar and Costco.

But a chain is only as strong as its weakest link. Green says, “Before there was a dedicated Internet team, sometimes calls slipped through the cracks and the salespeople didn’t have a chance to answer the incomings.

“If a guy has a customer on the lot, he’s not watching his time. Sometimes they just get busy. Now with a dedicated team they have one function – to get good quality responses and have that sense of urgency just as if you had a customer on the lot or walking into your showroom.”

But he warns against being too efficient. “We try to use five minutes as the benchmark for a response. Sometimes a response can be too quick because you’re just trying to get to it instead of thinking it through.”

(Click the "download" button below to see the WardsAuto e-Dealer 100 list.)