Digital Retailing in the Automotive Industry – Are We There Yet?

Feb 01, 2024

We are living in a time when car buying has changed dramatically. The pandemic brought unforeseen supply chain issues and microchip shortages that reduced vehicle inventory. Consumers went online, and many major automakers enabled custom online vehicle ordering.

As a result, there is a whole new group of online car buyers who have brought the customer experience to the next level.

According to a study from 2022, online car buyers reported a higher level of customer satisfaction in the overall process compared to in-person buyers at dealerships. Cost and time savings are significant reasons to search for a car online, and of all these buyers, only 3% said they were unlikely to purchase a vehicle online again.

So as customers embrace online car purchases, what about the dealerships?

Times are Changing

Buying a car once meant heading to the dealership, talking to a salesperson, test-driving cars, negotiating a final price, etc. This process is time-consuming and does not correspond with today’s customer needs and expectations. And the car dealerships know this very well.


Dealerships have worked hard and expanded their online sales efforts in the last 2-3 years.

With the higher level of satisfaction of online car buyers finding satisfaction, it seems likely that more consumers will look to the web when it’s time to buy their next vehicle. It’s becoming more and more crucial for any dealership to build a strong online presence and options for a contactless buying process for current and future customers.

Technology is Evolving

Digital retailing, or the ability to complete the entire car-buying process online, from browsing inventory to financing and delivery, is becoming the logical next step in dealership software solutions’ evolution. Cloud-based dealership management systems (DMS) quickly caught up, and today they offer greater flexibility, scalability, and cost-effectiveness to help dealerships deploy the digital retailing process in the whole ecosystem.

The evolution of cloud-based Dealership Management Systems (DMS) reflects the broader technological trends and the entire automotive industry’s transition to cloud computing.

Here are some key components and innovative features of digital retailing in the automotive industry:

· Online Inventory: Customers can browse the dealership’s inventory of new and used vehicles through the website or other dedicated online platforms. They get real-time inventory information to help make quick decisions.

· Virtual Showroom: Digital retailing often includes virtual showrooms or 360-degree views of vehicles, allowing customers to explore the interior and exterior of the cars online.

· Price Transparency: Dealerships keep transparent pricing information online, including the vehicle’s price, taxes, fees, and financing options. This helps customers make informed decisions without the need for negotiations.

· Online Financing: Digital retailing allows customers to apply for financing online, receive pre-approval, and explore various financing options, including monthly payments and interest rates.

· Trade-in Valuation: Customers can receive an estimate for their trade-in vehicles by providing all the relevant information and details online.

· Chat and Communication Tools: Live chat features or messaging systems enable customers to communicate with dealership representatives in real-time, addressing any queries or concerns during the online shopping process.

· Digital Signature and Paperwork: Once a deal is reached, customers can complete necessary paperwork and sign contracts digitally, reducing the need for in-person visits and streamlining the final steps of the purchase.

· Home Delivery: Some dealerships offer home delivery services, allowing customers to have their purchased vehicles delivered to their doorstep. The process is enabled and reflected entirely in the DMS.

· Integration with CRM Systems: Digital retailing platforms may integrate with Customer Relationship Management (CRM) systems to streamline customer data, ensuring a seamless transition from in-person to online interactions.

The goal of digital retailing is to provide customers with a convenient and efficient online car-buying experience, ultimately saving time and making the process more

transparent. It also allows dealerships to reach a broader audience and adapt to changing consumer preferences in the digital age.

Based on these trends, our Automotive Dealer Management Systems, DealerBox, have already enabled various features to help dealerships in their digital retailing transformation journey.

Our specialists are doing constant research on the newest trends in retail to develop the DealerBox roadmap. Exciting features and functionalities are coming in the next couple of months. If you want to be the first to know, get in touch with our DealerBox team to learn more.

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About the author
Yanitsa Mihova