In an ultra-modern world where digital experiences are now normal, consumer expectations are evolving. Streamlined, personalized interactions are no longer simply nice to have.
Embracing automotive digital transformation is the key to meeting rising expectations and keeping your dealership competitive in a quickly evolving market landscape. Here we’ll cover everything you need to know about digital transformation in the automotive industry, including key benefits and challenges to consider when exploring your options.
Here we’ll dive into everything today’s dealership teams should know about navigating these exciting industry changes, including how embracing F&I digital retail can help.
What Is Digital Transformation and Why Is It Critical for My Dealership Now?
Digital transformation in the automotive industry leverages technology to improve business operations and customer interactions. It’s a critical part of meeting rising consumer expectations and maintaining a competitive edge.
Digital Transformation in the Automotive Industry: Key Market Drivers and Trends
As with all major digital retail trends, the current push toward sweeping digital transformation is being driven by shifts in the retail automotive sector.
Evolving consumer expectations
Customers are the heartbeat of any successful business, so keeping them happy is a key ongoing priority for modern dealerships. Today’s buyers expect new vehicles to be equipped with all the latest technology and want used vehicles to be as like-new as possible.
More importantly, they expect the process of shopping for a vehicle to be streamlined, seamless, and use modern digital retailing technology.
Exciting tech advancements
The tech available to today’s dealerships brings an incredible new range of possibilities to the table. Upgraded shopping and purchasing solutions help make your customers’ experiences easier and your business run more efficiently – from online retailing platforms to digital transactions, mobile apps, virtual test drives and online financing tools.
What will really set you apart from competitors is creating an online process that blends in-person and digital components.
Staying competitive and relevant
Digital transformation is changing how all dealerships do business, including your competitors. Embracing the change and implementing relevant tech options can help you maintain your competitive edge and appeal to modern consumers.
Examples like innovative Virtual F&I (finance and insurance) solutions and web-based training options make it easier to run an airtight, customer-centric business.
Key Areas of Digital Transformation
Below are the essential fields to keep your eye on as you develop a plan for upgrading various departments around your dealership.
Sales and customer service
The days when people turned to virtual shopping and customer service solutions only as an occasional alternative to in-person options are over. Even in cases where drivers plan on finalizing vehicle sales in person, most prefer to start the process online.
Around 23% of automotive shoppers will actually handle the process digitally from start to finish, completing purchases via their mobile devices.
Digital retailing lets modern shoppers like these virtually browse countless brands, makes, and models. They can easily see and consider all their available options before setting foot on a lot, including F&I products tailored to suit their individual needs.
Operational processes
Digital advancements on the operational side of things can help streamline the way a dealership functions on multiple levels. Many essential functions like scheduling, keeping customer profiles current and communications can be automated, reducing the likelihood of human error and speeding up processes.
Modern digital systems take the guesswork out of tasks like managing inventory and navigating supply chain logistics, as well. Perks like real-time visibility and dedicated data platforms ensure that if there’s an issue or an update, you know about it in the moment and can act accordingly.
Marketing and education
Ongoing digital transformation has revolutionized the way dealerships market themselves, as well. Brand managers are no longer simply giving their best guess when it comes to crafting marketing strategies. They’re making well-informed, data-driven decisions.
When these solutions are backed by hard data and efficient analytics that accurately unpack consumer behavior patterns, they are more successful. Leveraging technology to better understand customers also helps dealerships offer tailored services and sales options that accurately align with each buyer's needs.
Where Virtual F&I and Other Offerings Fit into Automotive Digital Transformation
Digital transformation is facilitating better, smoother operations for every process that goes into running a dealership. Options like Virtual F&I make the process of finalizing a sale simpler for both your dealership staff and your customers.
How does virtual F&I work?
Like many digital services, virtual F&I options help close any physical gaps between a dedicated F&I manager and the customer they’re serving. They accomplish this without losing that ever-important human touch that’s often missing from strictly self-service or automated experiences.
Prospective buyers can communicate face-to-face with F&I professionals via video calls, preserving so much of what works about traditional in-person interactions. Finance professionals can interview individual customers to determine their needs before introducing them to various options. They can then offer practical guidance and recommend products best suited to that consumer.
Modernizing your dealership’s F&I function in this way offers your customers the convenience and versatility they want and expect without compromising efficiency or profitability for your establishment.
F&I solutions from providers such as JM&A Group help dealerships like yours meet changing industry standards by:
- Offering dealerships seamless access to on-demand or centralized virtual F&I services
- Supporting dealerships in steadily growing their F&I revenue
- Improving operational efficiency by speeding up the process and cutting back on the need for physical paperwork
- Facilitating wider market reach without causing staffing problems
- Enabling better, more thorough compliance and quality assurance
- Promote easy gathering of valuable customer data and insights
What Are the Benefits of Embracing Automotive Digital Transformation?
The sooner you implement changes and tech shifts that support digital transformation for your dealership, the quicker you can step into the future and embrace the benefits. Here are a few examples of the possibilities.
Improved customer satisfaction
Modern consumers aren’t just using digital resources to research purchase decisions. They are following through on completing the purchase entirely online, even with major investments like vehicles.
The right digital retailing tools and educational resources can go well beyond making it easier to buy a car. They can enable customers to personalize potential purchases with ease, boosting revenue opportunities and increasing customer satisfaction. Those customers, in turn, are more likely to come back to you in the future, as well as enthusiastically recommend your dealership to others.
Reduced operational costs
Going digital or virtual whenever possible is one of the simpler ways to reduce overall operational costs for your dealership across the board. You can easily scale the functionality of specific departments or services without the need to bring on more staff or expand your physical facility.
Improved technology may require upfront costs, but the benefits ultimately prove worthwhile in all areas of your business. Automating various tasks and functions where it makes sense can further save you money by reducing the likelihood of errors, speeding up processes, and streamlining communications.
Increased competitive advantages
The better your dealership is at meeting rising customer standards and offering satisfying user experiences, the more successful it will ultimately be. Embracing important technological trends like virtual F&I and digital education resources for customers helps you meet those expectations.
Transitioning processes sooner rather than later can give you a competitive edge over other dealerships, as well. Eager consumers have a new reason to choose your store over competitors who may not have made the transition yet, allowing you to position yourself as a service provider who puts customers first.
Automotive Digital Transformation Challenges and Considerations
A few growing pains come with the territory when an industry transitions from one mode of doing things to another. As you explore the potential benefits of digital transformation in automotive for yourself, review the following factors.
Resistance to change
Although new technology is exciting, it can often also be intimidating. Resistance to change is very much a real thing for that reason. Team members and associates may be reluctant to learn new software or systems. Some people might resist digital transformation out of fear that it may change their experience in ways they don’t like.
Required upskilling
Adapting to keep up with digital transformation trends in the automotive industry requires upskilling your team. For that reason, it’s important to have a plan for training your staff and collecting feedback when it comes to new tools and methodologies.
Employees learn more efficiently with the help of supportive resources and active training. Having a partner who is dedicated to effectively managing change, training your team, and ensuring the long-term success of your business can help this process run smoothly and ensure buy-in from your team.
Potential startup costs
At the outset, automotive digital transformation might sound cost-prohibitive to embrace with any consistency. However, this isn’t necessarily the case. For example, we tailor every virtual F&I solution at JM&A Group to suit individual dealerships, goal sets, and budgets, so you can rest assured that you’re getting the most possible value for your investment.
Ultimately, bringing your dealership up to speed with the right digital transformation solutions will help advance your business goals and processes. Not only do your customers receive more of the convenience they want and need, but you'll benefit via a healthier bottom line and sleekly streamlined operations.
Ready to bring your business into the future and experience the benefits of digital transformation firsthand? Discover our comprehensive guide to modern F&I solutions and see how Virtual F&I is helping top dealerships stay ahead of the curve.
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