Cox Automotive study cites progress on digital retail tools

Digital retailing tools are increasingly common at dealerships as they embrace time saved and the more personalized customer service that technology creates, according to a new Cox Automotive study.

At the same time, customers continue completing steps online only to repeat them in store, largely because dealerships don't trust the information shoppers share with them online, the Cox "2023 Digitization of Car Buying Study" found.

Findings suggest users are happy with digital technology tools as they become more ubiquitous.

Roughly 76 percent of dealers found digital retailing tools improved their customer relationships and made deals easier to finish, the study said. In turn, 74 percent of shoppers said they were willing to share income and credit score to enable an ideal buying experience. More than 50 percent said they'd share their vehicle data, and almost 30 percent their online and social media data.

Also, nearly 4 in 10 dealerships now offer customers the ability to complete every step of a vehicle purchase online, up from 3 in 10 a year ago, Tracy Noonan Fred, senior vice president of Dealer Solutions at Cox Automotive, said in a statement.

Noonan said dealerships remain "highly satisfied with these digital investments" because they have positively impacted both customers and staff — even with recent economic volatility.

Still, there are obstacles to overcome. According to the study, a whopping 97 percent of dealerships reported customers are completing steps online and repeating them in store. These repeated steps include trade-in offers, deal breakouts, finalizing the purchase price, selecting add-ons and loan applications.

A trust gap drove this trend, Cox Automotive said, with just 8 percent of dealerships saying they trusted the information shoppers shared with them online. In turn, 70 percent of shoppers reported they went through repeat steps to verify their data.

Study results suggest a hybrid digital approach in store could help reduce these duplicative steps confronting shoppers online, Cox Automotive said.

Underscoring this, 91 percent of shoppers said they want an option to interact digitally at the dealership. In turn, 81 percent of dealers said they either use or are interested in their salespeople using digital tools that help connect with shoppers, enabling them to continue their process at the dealership.

Dealers who continue investing in digital and artificial intelligence-backed technology that works online and in-store and gives shoppers a secure environment in which to share personal data and complete deals will maximize their financial gains, Lori Wittman, president of retail for Cox Automotive, said in a statement.

Study findings stem from a survey of 1,650 shoppers, 2,963 buyers and 393 franchised dealerships conducted July 5-31. The goal was to measure how digitization impacts dealers, shoppers and buyers in the car buying and selling process, Cox Automotive said.