WebBuy Blog

How Digital Retail Drives Higher Profitability for Car Dealerships

Written by Steve Zabawa | Oct 28, 2024 5:24:57 PM

One reason we are so passionate about creating a way for dealerships to compete in online car sales, is that digital retailing is not only a way to get more leads, but it is also better for your business and your bottom line.

As the automotive industry evolves, dealerships that embrace digital retailing solutions are not only meeting modern buyer expectations but also achieving higher profitability. Recent J.D. Power U.S. Sales Satisfaction Index (SSI) studies and Power Information Network (PIN) insights confirm that digital retail customers bring in more profit per transaction than traditional retail customers. With competition heating up, dealers who delay their digital transition risk being left behind.

Why Digital Retail Customers are More Profitable

Digital retailing creates efficiencies and enhances the customer experience, resulting in better outcomes for both dealers and buyers. Here's why dealership profitability increases with digital retail customers:

Enhanced Customer Experience and Trust

  • Digital platforms offer transparency and control by allowing buyers to explore inventory, trade-in values, and financing options online.
  • Customers feel more empowered and report higher satisfaction, reducing negotiation friction and making them more likely to finalize deals.
  • High satisfaction levels translate into more repeat customers and better lifetime value, according to the J.D. Power SSI study.

Operational Efficiency and Streamlined Processes

  • Digital tools automate many aspects of the buying process, including penny-perfect pricing, credit checks, and online trade-in evaluations.
  • AI-powered systems identify high-intent buyers early, ensuring the sales team focuses on the most promising leads.
  • This automation reduces overhead and improves sales conversion rates, leading to increased revenue and lower operational costs.

Boosted F&I Performance

  • With online pre-qualification, customers arrive pre-approved, giving sales teams more opportunities to upsell financing and insurance products.
  • Digital customers are more likely to engage with add-ons like service contracts and extended warranties, further driving profits.
  • A dealer-centric DR tool allows teams to maintain control over the financing process and maximize F&I gross according to their market and strategies, even in a time where vehicle prices are declining.

The Cost of Delay: Why Dealers Must Act Now

46% of buyers are willing to switch dealers for a more seamless experience. High interest rates and greater price sensitivity make online shoppers more discerning, and dealerships that don’t offer seamless digital options risk losing both leads and deals.

Delaying digital transformation means:

  • Missed opportunities to engage motivated buyers.
  • Lost revenue from higher-margin digital deals.
  • Increased customer acquisition costs as buyers gravitate toward tech-savvy competitors.

 

How WebBuy Can Help Your Dealership Capture Digital Profitability

Car deals made through WebBuy produce up to $600 more on both front-end gross and aftermarket F&I gross compared to non-WebBuy deals. Plus, the cost per sale on those deals is 1/3 the cost of deals made through other digital retailing tools.

WebBuy is designed to make the digital transition seamless for dealerships, offering a seamless, omnichannel experience for buyers and team members alike.

  • Penny-perfect pricing tools to build trust with customers.
  • Trade-in evaluations with CarValuator for accurate, transparent appraisals.
  • Instant pre-qualification powered by 700Credit to streamline and optimize financing.
  • 24/7 Chat and side-by-side deal making with NetDesker, allowing you to close deals in real time whether the customer is in the showroom or in their living room.
  • Dealer-Centric Controls allow you to customize the first pencil and deal structures to the way YOU do business.

By adopting WebBuy's digital retailing solution, dealerships can meet evolving customer expectations while boosting profitability through more efficient operations and better customer experiences.