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O’Neil: “Data is empowering.”
CHICAGO — Many auto dealers worry about surviving in an autonomous-driving world, but first on their agenda should be selling cars online, a Cox Automotive executive said.
After online sales, dealers likely will begin using data from online research and shopping to streamline digital and in-store sales, said Cox Automotive COO Mark O’Neil.
Auto retailing still hasn’t fully embraced the Internet, O’Neil said this month here at the Access: Velocity conference, a gathering of dealership personnel using Cox Automotive products.
“I’d worry about that right now more than I’d worry about the autonomous car. But that comes, I believe, as a sequence,” O’Neil said in response to questions from dealers about their role in an autonomous-driving future.
‘Click to buy’
Dealers have to handle full transactions digitally “first and next,” O’Neil said, before worrying about the next industry shift. “Let’s get to the point where we can click to buy, where you can enable a consumer to buy a car just like they buy any other retail good.”
Some dealers have resisted online sales for many reasons, he said. They fear that financing can be complicated and trade-in values can be difficult to predict online, for example.
“What if, what if, what if,” O’Neil said. “The reality is these are really kind of simple things to solve. We’ve got to solve them. We’ve got to embrace it.”
If the industry embraces digital retailing, it will be better positioned for the next step, whether that’s autonomous vehicles or data usage or both.
In interviews and at industry events in recent months, Cox Automotive executives have said that digital sales won’t take over a dealership’s business, but will provide another option for the customer. Some customers will take advantage of online sales, and some will buy cars the traditional way, they predict.
For future transactions that happen in person but with digital components, Cox Automotive aims to craft a high-probability deal before the customer even steps into the showroom.
Once dealers and consumers master vehicle research, shopping and how to buy online, O’Neil said, Cox Automotive can work with data from its multiple brands to predict what a consumer wants upon entering the dealership, give that store a heads up and prepare an offer that the customer is likely to accept.
Cox Automotive interacts with more than three quarters of car shoppers through Kelley Blue Book, Autotrader and Dealer.com. In September, Cox had more than 80 million online consumer interactions through the three brands.
“Imagine now with 80 million data points in one month, hundreds and hundreds of millions over multiple months, we can take a consumer who has been doing something online, [and] when they walk in your store, we send you an alert,” O’Neil said.
That alert could tell dealers that a customer named Alex is about to walk into the showroom. Alex has been shopping online, looking at three vehicles. Two of the vehicles are competitive models and one is at the dealership. The alert would say how Alex has valued his trade-in. It would then tell the dealer that Alex knows what a reasonable price and payment for the car is and that Alex buys two finance and insurance products on average.
Cox would recommend a deal structure for Alex. For example, the recommendation might suggest what to offer for the trade-in, how to value the vehicle Alex wants to buy, which F&I products to focus on and how to get to the desired monthly payment.
20 to 30 deals
Cox will tell dealers that if they take the advice, they will have an extremely high probability — perhaps more than 90 percent — of closing that customer, O’Neil said.
“We have teams working on stuff like this because we think data is empowering,” he said. If this setup becomes a reality, dealerships could have one salesperson take on 20 or 30 transactions per month, instead of 10, he said.
“We’re hugely positioned to leverage data, but you need to embrace it,” he said. For example, if a customer comes in and Cox says there’s, say, a 91.3 percent buying probability if the dealer follows the recommendation, dealers shouldn’t try to reconfigure the payment and add more F&I products.
“Don’t play the odds that way,” O’Neil said. “The 7 [or] 8 percent chance you’re going to win that isn’t the way to run a winning business. It’s about Moneyball. It’s about data. It’s about leveraging it.”
Embrace online sales, Cox exec tells dealers
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