Why dealers should embrace 'the age of transparency'

When shoppers pull into the dealership lot and immediately whip out their phones as they browse, Charlie Daniel takes that as a clear sign they don't want salespeople hanging over their shoulders.

"The consumer is not interested in that face-to-face. They just want information," says Daniel, corporate operations director for Stevenson Automotive Group, which has 15 stores in eastern North Carolina. "It used to be that the handshake and meet-and-greet was the most important part of the sale."

But Daniel and other auto retailers are finding that the new style of shopping need not be threatening. They say that dealers who embrace the accessibility of real-time information end up with satisfied, well-informed customers and lose fewer shoppers to competitors.

More than half of Americans have smartphones in their pockets or purses, and mobile devices have taken on a major role in the car-buying process, especially in the critical later stages. The ubiquity of mobile devices means shoppers can find out easily if a store across town offers a better deal.

But experts say there is plenty of upside for dealers.

Mobile technology can help attract customers even when a dealership is closed. And no longer do many customers need to "go home and think about it" because they can do more research without leaving the showroom.

"It's becoming more acceptable to say, 'I'm going to check this on my phone, if you don't mind,'" says Andy O'Dower, director of mobile product management at Cars.com.

"For a dealer, an educated consumer is one that is much more apt to close. The best dealers realized very quickly that it's the age of transparency."

A recent study by Nielsen for Cars.com found that 83 percent of new-vehicle shoppers own a smartphone, and 43 percent of those consumers -- more than a third of all car-shoppers -- consult their device on the dealership lot.

Phones with Internet connections aren't new, but only recently have they become fast, powerful and popular enough to generate a large proportion of the traffic to dealership Web sites and research portals such as Cars.com and Edmunds.com.

Many dealerships discovered quickly that visitors they receive from mobile devices are several times more likely to turn into customers than those using desktop computers.

Mobile Web visitors typically don't stay long, because often they are merely seeking a phone number or location, and some undoubtedly are driving at the time. But they tend to be close to making a purchase or service appointment.

Having a separate Web site optimized for the smaller screens of mobile devices has become critically important, yet at least a quarter of dealerships lack one, says Stuart Lloyd, vice president of the interactive group at Dealertrack Technologies, a company in Lake Success, N.Y., that provides software and Web services to dealers.

Some of Dealertrack's large clients generate more leads from their mobile sites than from the traditional ones they established years ago. Increasingly, dealers are even creating their own apps that smartphone users can download, offering coupons and other benefits to loyal customers.

A mobile Web site that's clunky, loads too slowly or forces visitors to dig for the information they seek is a surefire way to lose shoppers, Lloyd says. Worst is no mobile site at all; some automaker-mandated sites lack a mobile component.

"Consumers are going to give them about 10 seconds," Lloyd says. "In 10 seconds, they're going to make a lot of decisions about that dealership. If it's not superfast, the consumer will get frustrated and abandon the page."

The best mobile Web sites offer up-to-date inventory details and other features that help shoppers find what they want, but their most commonly used function is simply a way to contact the dealership. Lloyd says every dealership should have buttons on its mobile home page that let visitors call various departments with a single click.

Because people can't order a car online the way they can buy books, TVs or clothing, mobile phones haven't cut into dealerships' sales in the same way they have affected other brick-and-mortar retailers. (The process of shopping for items in person then getting them online for less is known as "showrooming," and smartphones have made it more common by giving shoppers an immediate way to compare prices.)

But more consumers want to use a similar approach with car shopping, and many dealerships that make it easier to do so have had positive results. By posting scannable quick response -- or QR -- codes next to traditional window labels, stores can guide shoppers and try to capture their business even on evenings or Sundays when no sales staff is present.

At Lebanon Ford near Cincinnati, every vehicle has its own QR code, and 85 percent of the time those codes are scanned when the dealership is closed.

"I knew there were a lot of people who drove the lot, because you could sit there on Sunday and just see all the traffic," says Jeff Cryder Jr., the store's marketing and communications director. "But it's been quite surprising."

Scanning the QR code with a phone brings up a Lebanon Ford-branded page of details about that vehicle, along with ways to schedule a test drive, calculate financing payments and, for used cars, locate similar vehicles on the lot. In July 2012, for instance, shoppers scanned vehicles on the lot 268 times, and 13 vehicles sold within 48 hours of being scanned.

Lebanon Ford uses a provider called Scan & Drive, an Indianapolis unit of Gannett Co., which owns USA Today and other media properties.

Scan & Drive, one of a growing number of companies offering such a function, has been around for nearly two years and leads to a sale for about 10 percent of shoppers who scan one of its codes with a mobile device, says Chad Rader, its national manager. Rader would not say what the system costs.

"Consumers would prefer to shop on their own terms and talk to a sales rep when they're ready to buy," Rader says. "They want no-hassle shopping. Consumers want to shop and feel like they're in control. They want to be anonymous until they're ready to buy."

At the Stevenson dealerships in North Carolina, shoppers will find that they are not the only ones with a smartphone at the ready. Staff members now conduct nearly all business on iPads and iPhones. The only computers in the stores are on sales managers' desks.

In the past six to eight months, traffic coming to the group's Web sites from mobile devices has more than doubled, to about a third of total visitors. Daniel, the operations director, says his dealerships' mobile Web sites, developed by Dealertrack subsidiary ClickMotive, are essential to creating a good impression as shoppers decide which stores to visit, particularly in small markets where each sale is proportionally more important.

"We don't have the luxury of having 100 people coming to our door every day. We need to maximize every opportunity that we have," he says. "Those are the customers who are not kicking tires anymore. They're trying to figure out how to get to us or how to contact us."