The burst of interest in digital retailing prompted by the pandemic has spurred the development of online platforms to sell cars — and not just by traditional software vendors.
Automakers are getting into the business. So are third-party marketplaces, which historically generated leads for dealerships by listing their inventory online and are now working to become more transactional. Some dealership groups, too, have created digital tools.
The nation's large public retailers generally have developed their own branded online sales tools. The current wave of dealership consolidation, including the flurry of buy-sell megadeals announced by the public groups this fall, offers an opportunity to watch how that development evolves.
It in large part is a function of scale. Public groups such as Asbury Automotive Group Inc., Lithia Motors Inc. and Group 1 Automotive Inc. already had the resources to develop digital retailing platforms — and had them up and running — before they announced buy-sell deals under contract that would give them dozens more stores. So the planned acquisitions widen the reach of their platforms and give them the chance to present even more selection in one place — a potentially key advantage at a time when inventory is difficult to come by.
If you're a large regional player, or close to a national one, and customers can find the vehicle they're looking for online within your group — even if it's not available at their local dealership — it can keep them from switching to a competitor. For the groups being acquired, one appeal is joining forces with a larger company that has a more robust online platform, as Steve Starks, CEO of Larry H. Miller Group of Cos., said this month about the pending sale of Larry H. Miller Dealerships to Asbury.
The public groups clearly see an upside to digital sales as they expand. It will be interesting to watch where they take the next iteration of their platforms — and how the rest of the industry responds.