The National Automotive Dealers Association held NADA Show 2019 at San Francisco’s Moscone Center in late January. Attendees found no shortage of new technology and trends to explore. If you missed the convention this year — or didn’t have time to get to every booth — here are a few highlights and insights from exhibitors.
Exhibitors agreed dealers attending NADA were more interested than ever in learning how technology and online platforms are changing they interact with car buyers.
“To me, it’s really about dealers searching for their brand,” said Rich Kurtz, senior vice president of distribution at Protective Asset Protection. “It’s predicated on servicing and supporting customers in their markets.”
Dealers are asking what they can do to differentiate themselves from their competitors, Kurtz added. “What is unique about them? How can they better serve their customer base?”
Jennifer Reid, vice president of strategy and marketing leader for Equifax, noted that her company is focused “powering the automotive journey” by finding new ways to reduce friction early in the sales and financing process. That puts a heavy emphasis on digital retailing and moving more of the transaction online.
As online shopping has exploded, customers are demanding more and more that their retail experiences are as tailored and personalized as their online experience — and car shopping is no exception. Autotrader (div. Cox Automotive) used NADA to introduce solutions designed to improve the customer experience.
“That’s our whole objective,” said Jessica Stafford, the company’s senior vice president and general manager. “We have unique personalization with a more customized experience. We get the right person to the right car at the right time.” The solution now makes a match the first time at a 71% rate, and those customers are twice as likely to submit a lead if they are on the dealer’s website, she added. “That’s what we’re all about: driving exposure and influence.”
Exposure is a concern that Reputation.com takes seriously. The company returned to NADA for the first time in several years. They found dealers today are successful at the things they do well, such as managing their walk-ins or online leads, said Ali Fawaz, senior director of automotive worldwide, but they are feeling less confident in the third-party space.
“Google My Business, Facebook, CarGurus — anywhere customers can see reviews and interact socially. This year we tied that all together. We quantify it with a Reputation Score,” Fawaz said, noting his company also seeks ways to help dealers do things such as improve their reach for greater visibility, manage social media platforms, and optimize the entire online conversation.
Drive Motors CEO Aaron Krane said his company is adding new features to take digital retailing “beyond the transaction,” protecting the business office in the process.
“Drive is able to show that F&I profit dramatically increases with a seamless online buying experience,” Krane noted. “The profit margin concern is allayed by large publicly traded customers claiming they make hundreds more dollars per vehicle. It is making customers happier and creating opportunities to be upsold, and it won’t erode your profits.”
automotiveMastermind launched Market EyeQ at NADA, a sales platform designed to allow dealers to better identify and communicate with buyers in their local markets.
“Our teams worked hard combining many of the data assets we have,” said Johannes Gnauck, co-founder and co-CEO. “It allows us to understand the garage composition and buying patterns of each and every consumer in the United States.” In a flattening market, Gnauck noted, this gives dealers a more consistent strategy for retaining current customers and finding new ones.
Find New Efficiencies in the Dealership
Many dealer attendees were focused on driving bigger profits. Dealertrack F&I Solutions “continued to deliver on the promise of giving dealers profit-building efficiencies across the entire F&I workflow so consumers have less waiting while buying a car,” said Mazen Letayf, associate vice president of product management.
Letayf noted the average dealership currently uses six different tools or systems to complete a deal, even while margins are being constantly compressed. Dealer need to find ways to make the process more efficient, and Dealertrack took the opportunity to demonstrate solutions designed to do just that. “Deal structuring on the new Dealertrack platform is up to 35% faster,” Letayf said.
Dealertrack brought solutions designed to improve the registration and titling process as well. “These solutions help to drive efficiency in the dealer’s back office and help ensure a positive impression with their customers,” said Kaitlin Gavin, vice president and general manager of Dealertrack Registration and Title Solutions. The company had a range of products at NADA, including solutions designed to reduce title turn time and expedite out-of-state transactions.
CDK Global also brought technology designed to improve the function of daily dealership operations, using NADA to introduce dealers to its Drive Flex DMS. According to President Dan Flynn, CDK’s new solution “offers features like a modern user interface and easy-to-use workflows that increase efficiency and productivity.”
The solution is cloud-based, allowing dealerships to operate more flexibly and efficiently, Flynn said. “They can access their dealership system from any device, anywhere, at any time. Their businesses are now at their fingertips.” The company also demoed the Fortellis Developer Network at the show, and launched Customer Success, an expanded service delivery model.
DealerSocket brought more than 20 innovations across four product categories to the show, according to CEO Sejal Pietrzak. “It’s just been phenomenal in terms of excitement and the investments we’ve made. It’s really paying off in product and technology, as well as investments in a more customer-focused approach.”
A big part of that is better integrating the CRM into the dealer’s website, allowing customers to easily be approved for credit before ever setting foot on the lot — and setting more realistic expectations when they do arrive in the F&I office — which makes for a more seamless and painless buying experience, Pietrzak added.
DealerPolicy brought the industry’s first “complete” auto insurance platform for car dealers to NADA, according to Chief Product Officer Mike Burgiss.
“We’re not talking about F&I products. We’re talking about auto insurance,” Burgiss said. “We’ve partnered with 30 insurance carriers. So we can provide up to a dozen quotes in seconds and show them where they can save. The exciting part is that nearly 70% of our customers save an average of $60 per month. If you’re in a dealership and can save that on the insurance, what are you going to do? Spend more.”
Bank of the West announced the launch of its new Premier Partner Program, which offers coverage for indirect auto dealers, initially to dealers in California. The goal is to help dealers better manage sales and cashflow while providing end-to-end customer service.
“We’ve basically been operating as an indirect auto lender for a number of years,” said Michael Pereira, executive vice president and head of personal finance. “Our focus was always on certain segments — superprime and prime — with little nonprime in recent years. When we looked at that business and reviewed our strategic positioning, we concluded that we needed to create a more holistic approach for a stronger dealer relationship.”
“All dealers are running a race they don’t want to win — the race to the bottom,” said David Adcock, executive vice president of Binary Automotive Solutions. He noted that too many dealers are still trying to win customers based on price alone, when they should be stressing value. “We’re showing dealers what they can do to differentiate themselves from their competition.”
That could include improving the penetration rate for service contracts and offering products that cover the entire lifetime of the customer, Adcock added. “We want to set [dealers] apart and help them increase profits from vehicle sale through the finance department.”
Another way to maximize the efficiency of dealership operations is with AutoMap’s service to monitor car battery services, said vice president of logistics and business development, Mark Sargeant. “Right now, we’re monitoring marshaling yards and getting [customers] loaded,” he said. “We monitor the health of cars. Last year, our customers spent $60,000 in battery replacements. No dead batteries in the yard is a win-win.”
Think Outside the Box
Assurant is among the companies embracing the brave new world of connected-vehicle technology. Executives traveled to NADA in part to demo Pocket Drive, a new platform that touches the service end of the business, according to Chad Ammons, vice president of global strategy.
“We took a different approach, keeping to services first,” Ammons said. “It is a smarter, simpler, and safer way for consumers to connect with their vehicles. And dealers can use focused elements of Pocket Drive to make the shopping experience better by simplifying things. If you want to see a specific vehicle, the dealer can go right to it, showing exactly where it’s parked, whether it’s double-parked, and if so, what other keys they need to bring, and check the battery health. We answered the call from dealers to make it more streamlined and simplify how consumers interact with it.”
HyreCar is another company that brought solutions outside of the traditional services and platforms to NADA. The company focuses on financing rideshare drivers and helping dealerships set up rental plans with a path to ownership, opening up the door to a wider range of nontraditional buyers.
“We are so far ahead in this space, on the cutting edge of what’s happening,” said CEO Joe Furnari. “The dealers I’m talking to are coming to us and asking for help. We have systems and partnerships in place. We’re here to help.”
Hunter Gorham, founder and CEO of Joydrive, is also banking on a new model of buying and selling cars. His vision, which he was sharing at NADA, is unique in the automotive space.
“Instead of owning inventory, let’s unite a coalition of elite dealers — the ones committed to a new experience — on one platform, one marketplace,” Gorham said. “We felt there was an opportunity for the holy grail, where all sides are winning. Customers get unlimited selection and don’t have to go to the dealership. Then, critically, on the other side, dealers badly need an ‘Amazon’ solution: Joydrive.”
Every vehicle on the platform, he noted, has one, haggle-free price, with a dashboard for consumers to apply for financing. They can look at vehicle service contracts, F&I products and more, and ultimately close the deal and schedule delivery for their home or business. “Customers are now in control, and with that empowerment, they’re a lot more comfortable,” Gorham stressed.
Augmented or virtual reality is another outside-the-box category that is still on the cusp of becoming more mainstream. Gina Callari, COO of EVOX Images/RelayCars is betting it will take off sooner rather than later. Her company is investing now in the imagery dealerships will need to create seamless and engaging experiences on these platforms.
“XR is taking off, and we’re hoping dealers will do the same,” she said. “We launched RelayCars and have had 1.2 million downloads. We needed a way to show our content to dealers, so we created an app and placed our assets there. Right now it is the top non-gaming automotive app on Samsung GearVR — it has done extremely well.”
With Apple set to release augmented reality glasses in 2020, Callari added, the automotive space needs to start making sure it is ready for XR — including augmented, virtual and mixed reality platforms — sooner rather than later.
Finally, Toby Graham of KPA raised one topic many dealers remain reluctant to talk about: workplace harassment. She says too many dealers have yet to take a systematic approach to onboarding new hires, contributing to high turnover by failing to establish policies and expectations on Day One.
“Dealers have a lot of the risk factors for harassment embedded in their culture, and have for years,” she said. “They are having a hard time figuring out how to preserve corporate culture and protect people.”
Toni McQuilken is a freelance writer and editor based in the Tampa, Fla., area. Email her at [email protected]