It goes without saying that today’s consumers have high expectations for the purchases they make. This includes enjoying a fast and convenient digital sales experience. Web and mobile channels have come to span all industries, becoming a critical component for any modern retailer. Each day, digital technology continues to transform traditional markets. The automotive industry is no exception.
When e-commerce was first introduced, there was an initial fear that the transition to an online marketplace might render the role of the brick-and-mortar retailer obsolete. When it comes to digital car buying and financing, however, we’ve learned that this assumption simply isn’t true.
While it’s impractical to think that a fully digitized online sales experience can replace the one-to-one interaction and service a dealer can provide, new Financial Technologies are fast becoming a complement to the existing in-store, car-buying process. Rather than replace the dealer-buyer relationship, FinTech tools helped strengthen it by easing major pain points for everyone involved.
Using FinTech solutions, dealers can engage with their customers anytime and anywhere via the consumers’ technology of choice. As a result, digital channels help consumers feel empowered, giving them a greater degree of control over the transaction.
By employing digital channels, the automotive industry has much to gain by directly addressing existing concerns with the in-store finance and insurance (F&I) process. For starters, dealers have voiced that they have customers who want to better understand the nuances of finance offers; and, dealers’ sales teams require better resources in which to explain them. Making it possible to engage in this process through convenient web and mobile channels reduces the likelihood of communication errors between both parties. It also offers greater transparency for the buyer — something that today’s consumers demand and expect as part of their transactions.
Dealers are recognizing that faster, more enjoyable transactions help them reach their bottom line by reducing the time commitment (and occasional friction) typically associated with purchasing a car. Companies that are digitizing the car-buying process make it quicker, easier, and more empowering than ever for consumers to drive off the lot with a newly leased or purchased vehicle.
Customers enjoy a more seamless buying experience.
Aside from the clear benefits to the transaction process, tapping into digital channels also offers dealers a direct pipeline to millennials. A growing demographic wielding immense spending worth $200 billion in 2017 alone, millennials are the first generation of digital natives. Their love for technology helps shape how they, and other generations, shop.
The millennial generation is used to instant access to price comparisons, product information and peer reviews. For luxury brands, most of which have customers who display significant brand loyalty, tapping into the younger generation is priceless. While their customers tend to be in their 50s, the average luxury brand customer through FinTech is in their early 30s.
Not only can dealers reach new demographics, they can also focus on more qualified leads. When people are shopping for cars online, a dealer can see the activity, but they aren’t able to judge what level of interest a customer might have in actually making a purchase — or, at what level they’re even qualified to engage in the transaction. By utilizing an online F&I platform, shoppers have already taken the first step in the buying or leasing process by completing the finance application before ever setting foot in the door.
Dealers are in a great place to both utilize and create a better customer experience through the advancements being made on F&I platforms. These platforms leverage the knowledge the dealer possesses and add an extra layer of information, transparency and flexibility that today’s shoppers crave.
Technology is ever-changing. And we’re seeing advancements being made every day. Dealers that stay current with the latest developments in online F&I platforms and embrace these emerging digital technologies will come out winners in the digital future of car buying.
Author: Andy Hinrichs
Andy Hinrichs is the Chief Executive Officer of AutoGravity and a member of its Board of Directors. An accomplished entrepreneur and seasoned executive, Hinrichs is the visionary behind AutoGravity, building a diverse team of innovators to reinvent car financing for millions of car buyers. Throughout his 20-year financial services career in the U.S., Europe and Asia, Hinrichs has started businesses and led digital initiatives on a global scale. Prior to founding AutoGravity, Hinrichs had profit and loss responsibilities for various Daimler Financial Services markets in Asia, where he tripled the volume of assets under management. Previously, Hinrichs served as Vice President of Marketing for Mercedes Benz Financial Services USA. Hinrichs holds a bachelor’s degree from Pforzheim University in Germany and an MBA from the University of Louisville.