Consumers now expect the convenience and time savings that come with transacting digitally.
Similarly, said Nick Gorton, chief innovation officer at Edmunds, dealers expect that their technology vendors will partner with them to provide an online and in-store experience that satisfies customers' expectations.
Some of those vendors — vehicle listings companies — are adding digital retailing features to help shoppers buy a vehicle via the Internet, sending dealerships more robust leads from shoppers browsing stores' online inventory listings. Executives of the major vehicle listings companies and analysts who cover the space told me for a story in this week's issue that it's a natural evolution at a time when auto retail more broadly is adopting e-commerce capabilities.
I spoke with Gorton in early 2020, before the pandemic made digital retailing a necessity for dealerships. Even then, he said that consumer expectations about vehicle-shopping online were shifting from research to transactions.
Expectations have only increased since then, and in April, Edmunds was acquired by CarMax, the nation's largest used-vehicle retailer, in a deal valued at $404 million. The companies have jointly developed a tool that can provide instant appraisals and cash offers for trade-ins.
On Edmunds' platform, shoppers can filter listings for dealerships that offer home delivery, for instance, Gorton told me this month.
Being a CarMax independent subsidiary might unlock more capability down the road, he said. Gorton would not provide details about future strategy but said it's possible to imagine that CarMax's and Edmunds' combined strengths could lead to offers of home delivery over longer distances or to a deeper integration with CarMax's new omnichannel retailing tool. Omnichannel refers to a seamless buying experience for consumers whether they shop online, in-store or both.
"You can see that there's strengths that they have that we didn't have," he said. "And certainly their history as a physical company and our deep history as a technology company — our ability to help them in their digital transformation we think is really strong."