Auto retailing is shifting online, but a major hurdle stands in the way: getting customers past the credit application.
Some online shoppers are reluctant to enter personal information — especially their Social Security number — on a dealership's website. That's hampering dealerships' efforts to move more digital buyers deeper into the sales funnel before they walk into a store.
Take Asbury Automotive Group. The nation's seventh-largest dealership group is working to add lenders to its digital retailing tools to boost vehicle sales. And shoppers are responding with "a tremendous amount of activity on the tool," CEO David Hult said on the company's third-quarter earnings call in October.
"But the exit point right now for most consumers that aren't converting [is] around the credit application piece, where they are putting their Social Security number online," Hult told analysts. "It's a difficult challenge to convince a consumer in this day and age to put their personal information out there."
Asbury's experience is indicative of the challenge — and the opportunity — franchised auto dealers have in winning over the trust of consumers who, for instance, might submit personal information without hesitation on Amazon's site but balk at the idea when buying a car.
There are caveats, of course. Amazon doesn't ask for a Social Security number. And when shoppers hand over credit card and address information to Amazon, they're anticipating multiple purchases in the future. Car shoppers, unless they're thinking about returning to the dealership for service work, view acquiring a vehicle as a one-off event.