Retail Anywhere Roundtable
Erica Lowman Hi, everyone. I'm Erica Lowman at Reynolds and Reynolds. Today, I'm excited to have a panel of top Reynolds executives to provide industry insight on the evolution, challenges, and future of automotive retailing and our response to these changes. Let's start with introductions. We have Kasi Edwards, senior vice president of marketing. Chris Walsh, executive vice president of sales and marketing. And Dave Bates, vice president of customer support. Thank you all for being here.
Kasi Edwards Thanks for having us, Erica.
Chris Walsh You're welcome.
EL Of course. You all have substantial industry experience and perspective, so I'm excited to sit down with you guys and really dig into the retailing environment, current and future. So first, let's set the stage. Let's talk about how automotive retailing has evolved, especially in a digital world. Can you start us off by walking through this evolution that led us to the times we're in?
DB So over time, automotive retailing and digital retailing have kind of taken on their own persona. And if you think about digital retailing, you start thinking about websites and inventory and lead submission. You might be doing payment calculation or even starting a credit app. And dealers have adjusted their processes to optimize that consumer experience in doing that. And if you think about the service side of the business, it's been mostly web scheduling for appointments and maybe some online payment.
CW And then you fast forward to today, right, where we're reading that two thirds of consumers want to buy a vehicle online. But what does that really mean? Do they want an entire process where they buy the car online? Are they looking to just do the paperwork online? Do they not want to do a test drive anymore? Do they not want to ask questions? So a lot of times consumers say they want something, but then we find that they act very differently than that.
EL I imagine that gets challenging.
KE It sure does, Erica. What’s really challenging is when you try to step back and map out like the entire automotive retailing journey, consumers want to complete a lot of those pieces from the comfort of their home. But they're still following a lot of those same processes and purchase journeys that they were maybe five years ago. So they start their research online. They go through all the steps, think they got a good deal, right? Specific to the vehicle selling process. But then they arrive at the dealership and oftentimes what happens is they have to kind of start the process over, right? We see things sort of unravel at that point and they have to start a lot of steps and repeat information and do all of that process again, because it wasn't communicated from online to the in-store stage of the buying experience.
CW And dealers have to look at automotive retailing and digital retailing as dealership operations, period. And dealership operations really is just communicating information to consumers no matter where they are and in the buying process and no matter where they are physically. And I think that successful retailers have found ways to collect and provide information back to consumers that is relevant to them that leads to a profitable transaction for the retailer. And a lot has changed over the past 10 or 15 years. But I think the consumer's openness to being communicated to in different ways and through different channels is one of the biggest changes.
EL] So what are dealers trying to do to get this fully online and online to in-store experience?
CW That's a great question. And honestly, it's kind of a hard one to answer because retailers are kind of defining and using digital retailing differently. To some dealers, it's selling a car. To others, it's sales and F&I. And they tend to be approaching it in chunks versus a holistic approach. And then you end up just focusing on one or two things when you need to focus on more of a big picture.
DB Yeah, Chris, I think sales and F&I is the big one now. And if you think about that process, you start online and you get to select the vehicle. Well, then as you get into the process of starting the deal, closing the deal, and then moving to the F&I office, I think dealers are experimenting on how they're going to get that done. And they're trying different tools and different processes. And quite frankly, what they're running into is there's a lot of duplication that they have to do and manual entry. And I think about when I go and do online retailing or online buying of anything, my credit card's typically saved. I don't have to put that 16 digit number in 72 times and I just click and get what I get. And if you think about it from a car dealer perspective, they're manually entering name, address, phone number, email address, 17 digit VIN number for a trade and doing that five and 10 times a day. And quite frankly, it's not seamless. It's not convenient. And it generates frustration for both the dealer and their employees as well as a consumer.
EL To Chris's point, dealers are taking digital retailing in chunks. Which leads to plugging in a whole bunch of different solutions and the end result isn't holistic, right. So what are some of the challenges dealers are experiencing with this approach?
KE Erica, I think some of the primary root challenges are that it's just simply disconnected, right. And the approaches are often very siloed. Dealers are being forced to look at it through every area or every process or every problem that they're trying to solve very independently. A simple example might be the ability to provide an accurate payment. You want to be able to desk a deal and have an accurate payment that also matches what's in your dealer management system, right? While, a very simple example, multiple solutions and fragmented systems that don't speak to one another. That's where we see those inefficiencies come in and where dealers end up having to really sacrifice what's most important to them.
EL Let's talk about that. What are dealers sacrificing?
CW Well, I don't know if it's a sacrifice, but I think what's at risk is profits, right? So if you think about it, we have salespeople and we have F&I people, and their job is to educate consumers on the value of the F&I packages that they offer and how that benefits the consumer. So oftentimes if you're buying a 30 or 40 thousand dollar car, a lot of people might have a problem paying an extra five thousand dollars for an F&I package, right. So, now if you turn that around and say you're giving them the ability to browse your offerings online, what's the risk there? I'll give you a perfect example. My wife bought a car about a year ago. I went with her the day she was buying the car and sat through the process and the F&I person that was talking to her asked a lot of good questions about her driving habits and those kinds of things, which led her into buying a tire and wheel and another F&I package. And I can tell you on the tire and wheel side, there is no better thing that we bought for that car than tire and wheels. So I think, how do dealers maintain control of the process and not completely turn the reigns over the customer. How do we address that?
KE Well, Chris, as a follow up to that, I think that there's another piece of this whole process that's really critical that we need to look at. And that is accuracy, right? Just plain accuracy. Dealers can't sacrifice accuracy and if anything, accurate information in today's world and the digital environment with consumer’s expectations is even more critical and more important today. So whatever you provide back, whether it be a monthly payment to a customer, the appraisal on their trade, the quote of a job for your repair order, that has to match up when it's all said and done.
DB I think experiences too. You think about starting the process online, that consumer's experience still has to be personalized. It's got to be convenient for both the associate in the dealership as well as the consumer. And I think one of the things that dealers lose sleep over at night is the whole compliance factor, right. If you're selling cars outside your four walls, how do you make sure you got a valid contract? How do you make sure that that person is who they say they are? And then making sure that what they get offered and shown outside is the same as what gets offered inside the dealership, is just a real big challenge. And having good reporting and tracking of those steps is critical. And it's a real balancing act for dealers to be able to do all that.
EL We're talking about how dealers have to balance meeting consumers online while also not sacrificing their own success. How do they do that?
CW Well, we think that dealers need to adopt what we call a Retail Anywhere process, which is really nothing more than a dealership-wide process that allows you to interact with customers, sales or service, no matter where they are. And you're still maintaining the control and the profitability of the transaction. And we think that's only available through a seamless process and a seamless system.
EL What makes Retail Anywhere different than anything on the market?
KE Well, Retail Anywhere is focused on the complete dealership, right? We certainly recognize and acknowledge that consumer demands and expectations and needs are going to continue to be really prevalent, that dealers have to figure out ways to meet all of those. But ultimately, we want, as an organization, our customers who are the dealers, to be as profitable as they can be. And that's where Retail Anywhere comes in. It allows the dealer to serve their customers, but here's the kicker, while not sacrificing anything.
EL Chris mentioned it a minute ago, he said only achievable through a seamless process and a single system, which is Reynolds philosophy behind the Retail Management System. Can we expand on that a little more?
DB Yeah, I like to do that. When we started rebuilding our system from the ground up, the foundation was ERA-IGNITE and we had three core tenants. One is to make it more efficient for the employee at the dealership. Two was to improve the consumer experience. And the third one, probably most important, was drive profitability for the dealer. And we believe that that helps us deliver a great product while still meeting and exceeding consumer expectations.
KE So, Dave, to that point, having that single system, that Retail Management System approach that runs the dealership and a single unique identifier for every consumer, right, for every customer that we're doing business with are really critical keys to success today. It allows the dealership to eliminate manual processes and disconnected departments and really have a much more cohesive business operation.
EL So let's talk about how Retail Anywhere fits into all of this.
CW Well, Retail Anywhere is powered by the Retail Management System, so the Retail Management System is the engine that kind of makes this all work. And it's based on the premise that customers can be anywhere, right? They could be in-store. They can be at home. They can be a hybrid of both. It doesn't really matter. But it's a single process of interacting with that customer. And that's really important to be consistent in that way. And it's only achievable through a single system like the Retail Management System, which is really nothing more than a seamless process to address all that. At the end, that's really what it is.
EL To wrap up, I want to get some final thoughts. So how do we feel about a rapid fire question round?
CW Sounds good.
EL All right. First up, Dave, what are you most excited for in the automotive industry moving forward?
DB I think the thing I'm most excited for is we work for a company that's dealer focused and dealer driven. And we've been working on this for a while. We've had kind of our eye on the future. And we've built a solution that is going to be able to help dealers move things forward in the right way for their consumers, for their employees, and for their profitability. And I think that's a pretty neat thing.
EL All right. Next question, Chris. What do you think dealers will enjoy most about the Retail Anywhere approach?
CW Well, I think in the three plus decades I've been in this business, I have seen so much change happen in automotive. But the great thing about this industry is that it's so open to innovate. And it's so open to adopt new technology and new processes. So I'm excited about the part we can play in helping dealers take this next step in innovation and using some of the tools and processes and people that we bring to bear to help them make that change.
EL Yes. All right, last question. If there’s one final thought you want dealers to leave with today, what do you hope that is, Kasi?
KE It’s a very exciting time in automotive retailing. I think anyone in this business would agree to that. And we’re at an inflection point in consumer behavior changes, and we’re not really sure what’s that all going to mean and how that’s going to roll out in the coming years and decades to come. But not matter what direction online retailing takes, we are uniquely positioned to help meet those demands and ensure that the dealer, first and foremost, they’re at the forefront of what we’re focused on, which is going to be their success and their profitability.
EL Awesome. That wraps up our discussion today on Retail Anywhere. I really enjoyed our conversation today, and I want to thank you all for lending your expertise.
CW Thanks, Erica.
KE Thank you so much.
DB Thanks, Erica.
EL Thanks for taking the time to learn about Retail Anywhere. We hope you had a few takeaways about this approach to online retailing. To learn more, visit reyrey.com/retailanywhere. Thanks for watching, and have a great day.