NADA is always a whirlwind for everyone involved — meetings, networking, workshops, parties, and more. So what should we make of it all? When someone asks, how was NADA, what will we all say?
Now that I am back home and no longer experiencing the Las Vegas haze, I have had time to reflect. #NADA2020 was definitely a different NADA than years past. Sure, it was over a holiday weekend, and it was on different days than usual, but there was something else in the convention center air this past weekend (and I am not talking about the waffle cone smell permeating from Ben & Jerry’s).
If I could sum it up into one word, it would be “progress.”
Everyone Mixing The Kool-Aid
We have entered a pivotal stage in automotive retail, where the focus on offering a modern customer experience is at the center of it all. From 2019 to 2020, we went from strong recognition that “this is the way of the future, but we just aren’t sure when” to “we are doing it this year and want to understand how.” Talk of shiny new objects was replaced by deeper conversations about the evolving business model.
Before the exhibit hall even opened, I had lunch with my dear friend Brent Wees.
Not only did Brent give me a heads up that he sent the Russian Dealer Association our way, but we talked at length about the industry at large and what we thought we would see both at the show, and throughout the coming year.
After eating some ridiculously large salads at the Renaissance across the street we came to the conclusion that there are not very many new innovations this year — that after years of new technology companies hitting the scene and challenging the status quo, the vast majority of dealerships are now playing catch up.
Much like when dealer websites or social media first hit the scene and most dealerships weren’t sure they really needed them. It took a little while for people to come to terms with the sea change staring them in the face. Of course, now we can look back and laugh a little. Can anyone imagine running their dealership without a website or social media presence these days?
In proper Brent Wees fashion, he found a way to bring pop culture into the conversation, comparing where we are to the Beastie Boys’ 2nd album– Paul’s Boutique. In 1989 when the album was first released, it was not embraced by the public as enthusiastically as their previous album. Many music executives designated this “off-brand” experience a failure. However, fast forward to today and Paul’s Boutique is now seen as a landmark album in hip hop history. It took time before everyone could see it for what it was.
This is where we are as an automotive industry today. The progressive dealerships are already swimming while the rest of the industry is wrestling with the evolution in front of them and preparing to jump in the pool.
Customer Experience Ruled the Show
This mindset shift cuts across all areas of the dealership and all types of technology companies as demand continues to shift from new cars to used cars and front end profit continues to shrink. As such, the focus is shifting toward used car acquisition, F&I penetration, cost-cutting, and innovative ways to leverage omnichannel retailing solutions on both the variable and fixed ops sides of the house.
On Saturday, I had breakfast with one of our forward-thinking dealer partners, Chip Alvey, eCommerce Director at Oxmoor Automotive Group. We talked about the need to deepen engagement with customers online. Not just to create a better customer experience, but to streamline the work that his BDC team does to interact with them. By offering his customers the option to start the buying process online, he has been able to shift the role of his BDC from administrative lead handling and appointment setting to more of a concierge service that walks customers through their options, including F&I, before they come into the store. Not only is he seeing a significant increase in online engagement, but the customers who start online are translating into a 122% improvement in backend gross.
Chip is hyper-focused on creating the most efficient BDC possible. He knows that the only way to increase engagement without adding staff is to make his team more productive. He is on a mission to automate administrative tasks, so that his team can spend more time with customers moving things forward.
Shifting From Online Car Sales To Efficiency
We heard it throughout Central Hall, as well as at the J.D. Power Auto Summit. The definition of digital retailing is shifting. Dealers who once thought they would plug something into their website and discover a significant new channel of sales, are starting to realize that the real power of digital retailing is its ability to expedite the showroom process.
I started seeing this shift a few months back during interviews with many of our dealer partners. They signed up for Roadster looking to increase online engagement, but soon after launching realized there is even more value in how it empowers the salespeople to do more. Between the customer doing a portion online and the salesperson empowered to pencil deals in-store, huge time savings can be realized, including time savings for the sales manager, who can now be freed up to walk the sales floor.
Fast forward to last weekend and we heard the same message at NADA. Digital Retailing is omnichannel, and omnichannel is more efficient. This hyper-focus on efficiency enables dealers to reduce costs. Dealerships we spoke to were definitely talking about process and the impact on cost structure and profitability.
With all that said, efficiency as a term needs a benchmark. It fascinates me that for all of the studies that point to time as the biggest pain point, very few dealers track the actual transaction time for their store. It is something as an industry we need to get better at if efficiency is the name of the game. We just added a few questions to our post-purchase survey about how much time customers spent in the dealership. Now our dealer partners will know where they stand as they look for ways to improve their sales process.
It isn’t just sales efficiency either. When it comes to being more efficient, dealers need to look at every department — sales, managers, F&I, used cars, service managers, parts departments, etc. Having tools geared to certain departments will be critical. And dealers are ready. We were overwhelmed with the response we got to our new “Deal View” feature that gives sales managers real-time visibility into deals being worked on the showroom floor, freeing them up to manage the desk remotely from anywhere they choose.
Bringing These Digital Practices to Fixed Ops
Like I said above, this focus on efficiency extends across the entire dealership, and Fixed Ops is an area ripe for this type of application.
Chip at Oxmoor talked about how much more productive the Fixed Ops team could be if he could deploy similar digital retailing techniques to the service & parts departments. Companies like GoMoto were present in the exhibit hall, and with the Reynolds Acquisition announcement, I am sure they got a lot of dealer visits at the show.
I know the last time I took my car in for service, I could not get ahold of my service manager to get an update on my car, let alone did they have digital tools for me to stay up to speed on what was happening. It would have been great to be made digitally aware of the services I need, as well as any cool new accessories I may want to consider now that I have had the car for a while.
There is so much potential on this side of the house. On Thursday prior to the show opening, Brian Benstock received the Lighthouse Award at Brian Pasch’s AWA ceremony for his efforts to rethink the service experience. Brian has made it his mission to entirely rework the modern consumer experience, most recently doing so by developing an app that allows consumers to request to have their vehicle picked up, serviced, and returned to their home within 24 hours—no dealership visit required, using just their voices.
Everyone Wants to Talk Carvana
Whether you love them or hate them — Carvana was definitely on people’s minds. I know it was on mine every night as I drifted away to my favorite shows on Hulu, exposing myself to a minimum of three Carvana commercials per episode.
Carvana has made its mark, and whether a dealership competes with them at the market level or not, they are changing consumer expectations. Many of the solutions at NADA were being evaluated with a bit of a Carvana halo. You would hear things like “It looks like Carvana,” “It helps us deliver cars like Carvana,” “Carvana still brings paperwork to sign,” “Carvana has a call center too,” etc.
My takeaway from the Carvana obsession is that the industry at large recognizes the need to step up their game and that while they are threatened by the likes of external entrants pushing on the traditional franchise model, they also look to them for inspiration as they move forward in modernizing the experience they offer their customers.
Integration as the Holy Grail
Last, but certainly not new or least — integration continues to be a hot topic on the show floor. On Monday, we got a chance to meet vendor to vendor, and there is definitely a crack in what was once a very closed off system to do right by the dealership partners we share. With all of the focus on customer experience and creating efficiencies in-store, it is paramount. We have to work together to make the data flow seamlessly behind the scenes. Those that choose to be close-minded about partnering will lose in the end. Frenemies or not — the systems that dealerships use need to support their shared clients in fighting for the efficiency cause.
The reality is — there are so many vendors! When I walked the show floor, I was reminded of my first NADA over a decade ago. It is a HUGE industry, and as a vendor, we don’t always think about the hundreds of other vendors who are calling on our clients. NADA is a very humbling and empathy filling experience. When a dealer responds immediately to a text or phone call, you should feel so fortunate to have a real partnership in play.
So, while we did not see a ton of new innovations at NADA this year — we saw a ton of progress in the making. As a forever student of behavior and evolution, it is such an exciting time to be part of the automotive industry!
Let me know if I missed anything interesting that you saw at the show. Look forward to your comments.
Have a great 2020 everyone and see you at the next NADA!
Michelle Denogean is the Chief Marketing Officer of Roadster, the leading Commerce Platform for the automotive industry, where she oversees Marketing, Insights & Analytics.
To find out how Roadster’s Express Storefront can help you digitize your sales process, go to roadster.com.