Online tool just in time for Honda, Acura

Like other automakers, American Honda was developing online sales tools to link its brands' national websites to local dealer inventory well before the coronavirus chased most buyers from physical showrooms. With the global pandemic, however, getting those tools up and running became even more urgent.

Ten Honda and Acura stores were already piloting a product developed by the automaker and digital provider Modal. So the manufacturer pulled the timeline forward and quickly captured interest from about half of its 1,350 retailers across the country, who were eager for a no-touch or limited-touch buying process.

"It just happened that the planets aligned," said Vicki Poponi, vice president of customer experience at American Honda. "We were going to open up our sign-ups on April 15, and because of COVID-19, there was a request that we pull it ahead two weeks."

As it turns out, Shop Simple with Honda and Acura Precision Purchase have proved popular with the dealer body in a short time. About a third of the group is actively pursuing the online tools, which currently come with introductory pricing. Another 15 percent of dealers are up and running or deep in the process of getting on board, Honda said.

It's not a click-and-buy process as for an iPhone or a Tesla, but it's not meant to be. That's because the dealer is selling the vehicles — not American Honda. The process was developed, starting about two years ago, in close consultation with the dealer advisory council to make sure it was something retailers could embrace.

"This is really the dealers' tool," Poponi told Automotive News. "All we've done is linked up the Tier 1 [automaker] website to bring customers to the dealers."

That's important, she added, because retailers have their own custom, tried-and-true processes. But about 90 percent of buyers "begin their journey" on the national websites, she said.

From the Honda and Acura websites, the tool takes prospective buyers to local dealer inventory and from there to pricing, trade-ins, financing, customized F&I products and even home delivery. The retailer can determine what personal information is needed to begin, usually name, email and perhaps a phone number.

The online process, however, does not allow for negotiation. The dealer sets the price, and haggling is done via email, phone or store visit. "This tool is really for the customer who doesn't want to negotiate," Poponi said, which is a popular stance with younger buyers. "On average, it's about as good as the deal you're going to get in the [sales] office."

One upside of the online process is that a customer can take the individual steps over time by saving their progress. That could help sell F&I products since buyers can research their value and consider them thoughtfully. "There's no pressure on the customer," Poponi said. "It's very transparent."

It also reduces time in the dealership, which was important to customers even before COVID-19. One dealer in the pilot program told Poponi that his first online customer spent just 45 minutes at the dealership for delivery. Compared with four to five hours of store time normally, that made for a happy conclusion rather than a stressful one.

Chris Zamora, owner of Honda of Superstition Springs in Mesa, Ariz., is an early adopter, having joined the pilot program in October because he was looking for an online tool — and Honda let him try it for free. Rather than a click-and-buy process, it's been more of a lead generator over the past several months, he said.

"What it's been for us so far is more of a tool that puts people lower in the funnel of buying and capturing a lead or customer that might have bounced off your site before," he said. Buyers who click on the online process have to provide only minimal personal information to continue, and that more easily turns them into leads.

Since starting the pilot program, Zamora's dealership has averaged about eight sales a month that started on the Shop Simple tool, including 12 in November, eight in March and five in the first half of April. Additional customers have started on the tool but then shifted to a more traditional buying experience: test drive, negotiation, paperwork, etc.

"Overall, it's a way to sell a few cars right now, and it's a way to generate more lead traffic," said Zamora, who normally sells 200 to 250 new vehicles a month. The online deals being made aren't particularly lucrative for the dealership, but they do inspire trust, making buyers "more apt to purchase a vehicle service contract, a GAP protection plan, maybe a paint-protection policy because the hard part [of pricing and financing] didn't take so long," he said.

Zamora, whose family's auto group has 18 dealerships and two under construction, said he plans to pay for the service once the pilot program runs out and bring it to a smaller Honda store in the group. "I'm happy with Modal, but I really hope the level of service continues to be like it has been" as more dealers sign up, he said.