Roadster CEO Andy Moss and COO Rudi Thun don’t believe their Express Storefront product is right for every car dealer. In fact, the pair don’t even try to pitch their online sales tool as a solution to dealers who keep conversations about vehicle pricing and F&I product offerings behind closed doors.
That’s because Express Storefront is meant to put the entire car-buying experience online, as well as in the hands of a salesperson with an iPad. Car shoppers can use the tool at home to value a trade-in, calculate a monthly payment, and select F&I products — even schedule a vehicle delivery or pickup. Salespeople can use the platform to desk a deal in the showroom on a tablet or desktop computer. If a customer opts to stop shopping online and come into the store, dealers can pick up an Express Storefront transaction right where the customer left off.
“You have to have bought into a certain level of transparency for what we do to make any sense,” says Moss, who founded internet clothing retailer ShopStyle in 2006, before making the leap into the automotive space. “... Is the whole industry there yet? No. But I think it will get there in the next few years because it has to.”
Roadster launched the digital platform in June 2016 after opting to shed the auto broker-esque elements of its business and become a dealer partner. Now its full-service “ecommerce” tool is helping 25 dealerships close deals — and maintain similar F&I profit for both instore and online customers — with technology Moss has already used to change the retail industry.
“[The automotive industry] reminded us of where fashion was in 2006,” Moss explains. “The difference was it was almost stuck in a time warp from a technology point of view; nothing had really changed. So we saw a big opportunity to finally get to the point where you really could buy a car online.”
With its “We make buying a new car as easy as buying an iPhone” motto emblazoned on the Express Storefront website, it’s no surprise that many of the dealers currently on the platform subscribe to a no-haggle sales model. San Rafael, Calif.-based Toyota Marin is one such operation. It was the first dealership to embrace Express Storefront in July 2016, and General Manager Mike Christian has never looked back.
“We wanted to do online retailing from A to Z,” Christian says. “Customers are buying shoes at Zappos; everything is online. We know that they want to transact online. But one of the pain points for us was simplifying the whole process.”
Christian and his team tested a number of digital retailing tools before settling on Roadster’s offering. It was the robustness of the Express Storefront platform that captured his attention.
“The other [companies we looked at] had built a canned solution, and they were going to serve it up to you in their box, and it’s a take-it-or-leave-it-type situation,” he explains. “... We wanted to be able to control certain aspects and see certain data, and there was zero flexibility [with the other solutions].”
Toyota Marin recorded its first sale via Express Storefront within 48 hours of launch. The customer purchased four F&I products. Since then, the store is selling an average of 40 units per month using the online version of the tool; although Christian believes it actually touches closer to 100 of the 425 units the dealership sells each month.
“[Express Storefront] is driving tens of thousands of page visits and an increase in the time spent on our site,” he says. “So that’s driving some customers back in the door and helping us sell some extra cars.”
Similarly, Jeff Miller, general manager of Mark Miller Subaru in Salt Lake City, has seen increased customer engagement since implementing the solution at the beginning of the year at two rooftops: Mark Miller Subaru Midtown and Mark Miller Subaru South Towne.
“We’ve tried a few digital processes before, as far as trying to get payments on our website, and we’ve never found anything that works with our system as well as this,” Miller says. “And customers love it.”
No Haggle or Bust
While Express Storefront isn’t designed exclusively for one-price stores, the platform works especially well when used in conjunction with a no-haggle sales model. And that’s not surprising, given Moss’ extensive retail background and Thun’s expertise in consumer-centric online car-shopping technology. The latter was formerly head of vehicles for eBay Motors and COO of CarWoo!, an early competitor to TrueCar in the third-party lead-generation category.
“What we found was that by providing a sort of self-service — like an Apple Store sort of experience — to a consumer, you could take that same technology and put that on an iPad,” Moss says. “And if you give that to your salesperson, he or she is actually in a much better situation to talk to the consumer, relay incentives, and price the deal.”
The success of one-price stores and salespeople armed with iPads both remain largely unproven. Penske Automotive Group, the nation’s second largest dealer group, has been gambling on the no-haggle model since 2014, but it abruptly ended its pilot program at Toyota of Surprise (Ariz.) in late 2016. Reportedly, the program didn’t see the increase in sales volume or the cost savings from having one salesperson handle the entire transaction that the dealer group expected.
However, both Miller and Christian are sold on the one-price experience and the way Roadster’s offerings works with it. Mark Miller Subaru made the switch to the one-price model two years ago and has steadily increased sales volume while maintaining average gross.
“The customers are paying literally the same amount they were paying before, but we’ve been able to increase volume because people like it,” Miller explains. “People really enjoy the process; it’s not a fight anymore. You’re a true advocate for the customer, versus an us-vs.-them mentality that most dealerships have.”
Mark Miller Subaru and Toyota Marin use Roadster on iPads on the showroom floor as well as on their websites. At Toyota Marin, Christian took things a step further and created a dedicated Express Storefront team — 13 salespeople for new-car inquiries and five for used. The group’s promise to customers is completed deals in 30 minutes or less, something Roadster claims its solution enables regardless of whether a customer chooses home delivery or instore pickup.
“It’s not about lead generation. This is online sales. So we have to get the car gassed up, cleaned up, and get the paperwork processed, and be ready for that customer so that the whole process is done and completed within 30 minutes time,” Christian explains.
No F&I Left Behind
Neither organization was setting records in terms of F&I production prior to jumping on the Roadster platform, but maintaining their per-copy averages and penetration rates was still important. It’s still early, but production has remained in line with their expectations.
Like every part of the Express Storefront platform, the way F&I products are displayed is customizable. Some dealers, like Toyota Marin, choose to display pricing for individual products as well as discounted bundles; others may opt to include no pricing at all. F&I information can also be displayed as part of the checkout process once a vehicle is selected, instead of during the shopping period. It’s all up to the dealer.
“Basically, if they have a traditional F&I office, they’ll give the customer an iPad,” Moss says. Of course, an iPad is not usually part of a traditional F&I process at all — but that doesn’t faze Moss.
“[The customer] can look at brochures and videos of the plans,” he says.
Express Storefront has another way for F&I managers to sell product: robust communication features in the web version of the tool. “The [F&I] margins have held pretty much steady with what an instore customer would buy versus what they do at home, largely because of the communication platform that we built allows the dealership to communicate with the customer as they are checking out,” Thun explains. “They can still be selling and have every opportunity to show the merits of the backend products.”
Average F&I profit per retail unit at Mark Miller Subaru sits at $900 per copy, but that’s consistent with the dealership’s no-haggle strategy, Miller says. F&I product penetrations are largely consistent across online transactions and instore sales, with the dealership’s service contracts penetrating at a 40% rate when purchased online through Express Storefront. The instore rate sits at 45%.
“We’re not the kind of dealership that’s going to make four or five thousand dollar deals on used cars; it’s just not what we do,” Miller adds. “We try and make a fair gross profit on every vehicle and move on.”
Similarly, Toyota Marin has maintained closely matched F&I profit and penetration rates in store and online. The dealership averages about $1,050 on used and $1,100 on new across the board, and has embraced a process where one salesperson walks a customer through the entire deal.
“We went more to a one-person model and away from traditional F&I now that we have the iPad solution to present the F&I products,” Christian says. “And we just train the salesperson on how to present the products.”
Launching a dealership-branded Express Storefront is a two- to three-week process, and Roadster offers several days of training for salespeople who are going to use the solution in the store. The dealer gets a branded online storefront with custom assets, integrations with inventory management and product pricing solutions, and more — all housed under the dealership’s web domain.
Christian says that visitors to Toyota Marin’s website were spending, on average, two and a half minutes on a page. That’s ballooned to nine and half minutes since adding Express Storefront. “The customers are totally engaged,” he says. “They’re sitting there, and they’re spending time customizing their deal and finding their car.”
Roadster works directly with a dealership’s website provider to make Express Storefront work just like any other part of the dealer’s existing site. And that translates into search engine optimization benefits like improved Google search rankings.
“That’s another big differentiator,” Christian adds. “If I use a product from, say, Kelley Blue Book, I’m taking the customer to another site. And all the time they spend on that site, the page visits, nothing gets registered with Google. Everything that happens with Express Storefront through Roadster is registered under Toyota Marin.”
But Roadster’s dealer customers aren’t just selling cars on the internet. Mark Miller’s four-person marketing team is taking Express Storefront on the road to Park City, Utah, where they’ll be selling cars on iPads at a trade show.
“Our marketing people at events can say, ‘Okay, here’s your payment, here’s a worksheet, I’m going to email it to you’ and then they refer a product specialist to follow up with them,” Miller says. “We think we’re going to be able to sell a lot of cars up there using this.” The dealer group is even bringing a six-foot-tall touchscreen that integrates with the Roadster product.
If selling cars in a booth using iPads and a jumbo screen seems farfetched, a recent survey conducted by Roadster shows that one-third of customers would use their cell phone to buy a car — or even a house. And that might not be far off, at least if Moss and Thun have anything to do with it.
“[Express Storefront] has taken the ecommerce transaction and the technology we got from that, and is putting it in the hands of the dealers to be able to work with their customers and look at things in the same sort of way,” Moss explains. “If you are trying to do this the traditional way, then we are not a good solution.”
Brittany-Marie Swanson is the former senior editor for F&I and Showroom and Auto Dealer Today magazines. Email her at [email protected]