Lithia Motors Inc. and Asbury Automotive Group Inc. shared early learnings from their recently launched omnichannel retailing solutions in first-quarter earnings last month, with both retailers reporting that higher-credit consumers transacted entirely online and made larger down payments on expensive vehicles.
However, the inventory shortage may be driving more customers to transact online and pay more for scarce inventory, Asbury CEO David Hult warned last month.
In March, Asbury completed the rollout of its Clicklane omnichannel platform — which refers to offering a seamless buying experience to consumers whether they shop online, in-store or both — across all of its 91 dealerships.
The Duluth, Ga., retailer launched Clicklane in December as part of its five-year plan to reach $20 billion in annualized revenue by 2025, up from its current $8 billion in annual revenue. Clicklane will account for $5 billion of that revenue.
Current market conditions may be impacting what the dealership group is seeing on the tool, Hult said. Higher down payments are likely a reflection of government stimulus and tax refunds, he said.
Current Clicklane customers have a higher credit score on average than those that come in the store, which Asbury finds encouraging.
Customers with lower credit scores are transacting through the tool, Hult told Automotive News, but may struggle without dealership intervention.
"If I have bad credit, I may need to talk to someone to work through it," he said. "If the whole thing is automated, I'm doing it on my own, I'm likely to get turned down."
Some details on those sales:
- Average down payment was more than double the in-store average.
- Finance-and-insurance per vehicle retailed profit was 17 percent higher than the dealership average.
- Nearly half of customers took delivery at home.
- Credit scores on average were higher than in dealerships.
- 9 out of 10 customers who applied for a loan through Clicklane were approved.
- Nearly half of transactions had a payoff with a vehicle trade.
- Trades taken through Clicklane sold for higher end-to-end profit compared with trades from the dealerships.
- Trades through Clicklane turned in less than 15 days.