The automotive industry is undergoing a significant transformation, and at the heart of this evolution are Digital Car Tools. According to the groundbreaking 2023 Cox Automotive Digitization of Car Buying Study, dealerships embracing these digital solutions are witnessing remarkable improvements, particularly in enhancing customer experience and boosting satisfaction. This study, drawing insights from car shoppers, buyers, and franchise dealers, emphasizes the pervasive nature of digital retailing and its positive impact on both the buying and selling journey.
Tracy Noonan Fred, SVP of Dealer Solutions at Cox Automotive, highlights the rapid adoption of these technologies, stating, “Digital Retailing has made significant progress in penetration among dealers – with nearly 4-in-10 dealers offering customers the ability to complete all of the steps of the deal online, up from 3-in-10 only a year ago.” This growth persists despite economic fluctuations, driven by the tangible benefits these digital car tools bring to both customers and dealership staff.
Jessica Stafford, SVP of Consumer Solutions at Cox Automotive, further emphasizes the shift in consumer behavior: “Now that buyers have a growing willingness to share their data with dealers online, knowing that it is driving a more personalized online experience, digital retailing is not just a tool for efficiency – it is a mainstream best practice that consumers expect from their shopping experience.” This indicates that digital car tools are no longer optional add-ons but essential components of a modern car buying process.
Cox Automotive’s ongoing research since 2017 has tracked the digitization of car buying and the surge of automotive eCommerce, accelerated by the COVID-19 pandemic. The 2023 study reveals an even greater impact compared to the previous year in critical areas such as customer relationships, deal-making efficiency, staff productivity, and Finance & Insurance (F&I) processes. However, the study also identifies challenges, notably repetitive processes that can erode customer trust and extend deal completion times.
Key Benefits of Digital Car Tools in Dealerships
The study reveals several key advantages of integrating digital car tools into dealership operations:
Strengthening Customer Connections and Streamlining Deals
A significant 76% of dealers report that digital car tools have fostered stronger customer relationships and simplified the deal completion process. Furthermore, 61% acknowledge improvements in the F&I process, traditionally a source of friction for car buyers. These findings underscore how digital car tools are not just about automation; they are about creating a more customer-centric and efficient experience.
Consumers are increasingly comfortable sharing data online to personalize their buying journey. The study shows that 74% of shoppers are willing to share personal information like income and credit scores, 52% their vehicle data, and even 29% their online and social media activity. This willingness highlights the potential for dealers to leverage digital car tools to create highly tailored and efficient interactions.
Enhancing Efficiency and Building Trust in Online Transactions
Digital car tools are designed to drive efficiency, but the study also points to areas for improvement in building shopper confidence. A staggering 97% of dealers report that customers who complete steps online often repeat them in-store. The most common areas of repetition include trade-in valuations, deal breakdowns, final price negotiation, add-on selections, and financing applications.
This repetition stems from a trust deficit, with only 8% of dealers expressing complete trust in the information provided by shoppers online. A significant 70% of dealers believe shoppers repeat steps to verify data accuracy. This highlights the need for digital car tools to be more transparent, reliable, and integrated to minimize redundancy and build customer trust in the online process.
The Power of a Hybrid Digital Approach
The research emphasizes the importance of a seamless online-to-in-store experience. Currently, only 25% of dealers believe their digital car tools offer a consistent experience across online and in-person interactions. This inconsistency can breed doubt and disrupt an otherwise positive purchase process. Tools that ensure accuracy and continuity of vehicle information and customer data, regardless of the channel, are crucial for mitigating this risk.
Importantly, 91% of shoppers desire digital interaction options at the dealership, and dealers are responding by adopting new technologies. 81% of dealers are currently using or are interested in equipping their salespeople with digital car tools to seamlessly continue the shopper’s journey in the physical dealership. This hybrid approach, leveraging digital car tools both online and in-store, is key to meeting evolving customer expectations.
Lori Wittman, President of Retail Solutions for Cox Automotive, summarizes the study’s implications: “This study sheds light on the positive impact digital retailing is having on dealers’ business. It’s no longer enough to put widgets on a website. Dealers who continue to invest in digital and AI-powered tools that provide a user-friendly, secure environment where shoppers can share personal data and complete deals with tools that work both online and in-store, will continue to reap financial benefits that come with higher shopper and staff satisfaction.” The future of automotive retail is undeniably intertwined with the strategic implementation of sophisticated digital car tools.
For a deeper dive into the findings, download The Digitization of Car Buying Study eBook.
Study Methodology
The Digitization of Car Buying Study is based on surveys conducted between July 5, 2023, and July 31, 2023, encompassing 1,650 shoppers, 2,963 buyers, and 393 franchise dealers.
About Cox Automotive
Cox Automotive stands as the world’s largest provider of automotive services and technology. Leveraging vast first-party data from 2.3 billion annual online interactions, Cox Automotive delivers tailored solutions for car shoppers, automakers, dealerships, retailers, lenders, and fleet operators. With over 25,000 employees across five continents, Cox Automotive’s family of trusted brands includes Autotrader®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital™, and vAuto®. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately held, Atlanta-based company generating $22 billion in annual revenue. For more information, visit www.coxautoinc.com.
