• James Grace

Digital Retailing’s Fatal Flaw

Updated: Jun 29, 2020

I just returned from the 2019 NADA show in San Francisco. For the first time, I wasn’t “working the booth” for a large corporation so I had a chance to take in much more of the show. By my estimation, this is the 5th year in a row where “Digital Retailing” (tools that enable portions of the car buying process to occur online) has been a huge focus of the show.

I could certainly point to certain solutions and evolutions of solutions that are better or more innovative than others. However, in aggregate, nothing much has changed in those 5 years. The marketing buzz and talk track hasn’t changed much. The capabilities of the tools hasn’t changed much. The approach to the problem hasn’t changed much. Consumer adoption is still pretty much non-existent.

After 5 years, I think it’s time for us to all do a bit of self examination and ask ourselves what the heck is going on.

I have a theory that can be summed up as follows…

“CMO != COO”

…which is code-geek-speak for “Your Chief Marketing Officer is not the same as your Chief Operating Officer.”

I recently attended a 20 group meeting where the group had decided to bring their Marketing Directors along in addition to the normal attendees (typically Dealer Principal and COO.) One of the Marketing Directors of a fairly large group was explaining how she had been spending nearly all of her time evaluating Digital Retailing solutions for her group. Her COO sat quietly by her side, supportive and appreciative, but ultimately waiting for her to solve the problem and make a recommendation. This was my “Aha!” moment.

Digital Retailing isn’t working for us as an industry because we’re focused almost completely on the “Digital” and not nearly enough on the “Retailing.”

I’ve met and worked with a lot of brilliant marketing directors in the automotive industry, and while many of them are perfectly capable of evaluating Digital Retailing solutions, and even understanding the operational impacts and requirements of those tools, none of them is the Chief Operating Officer, and therefore they are all handicapped in their ability to effect the level of operational and organizational change required to make digital retailing REALLY work.

We can throw technology solutions at the problem of the online to in-store transition all day long, but until consumers can fully expect to be able to walk into a store and say “Hi, my name is James, and I just followed your online car buying process” and be met with something other than a blank stare or an eye-roll, Digital Retailing is not going to work.

Until you can sell a car online, and make sure that there are operational processes in place that keep that same car from being taken out on a test drive and sold to someone else 5 minutes later, Digital Retailing is not going to work.

Until all that information you entered online actually makes it into all the other systems and you don’t actually have to sit in the store and fill it all out again, Digital Retailing is not going to work.

A few years ago, I was in a meeting where someone was reviewing design sketches for the “Dealership of the Future.” Meetings of this type were usually throw-away opportunities for me to check my e-mail and drink coffee, but this one caught my attention because it was the right combination of realistic and enticing.

There was a gleaming showroom with well designed signage all over it. One sign indicated who had appointments that day so customers knew they were expected. There were kiosks to check in like at an airport. There were other signs showing where people were in the process, and how long it was until their next step. There was no discernible difference between the sales department and the service department. It was “Apple Store” meets “Disney” meets “Build-a-Bear” in a way that was tasteful and thoughtful and made good sense.

Five more years of NADA shows isn’t going to “solve for” Digital Retailing.

Instead, CMOs and COOs need to start working much more closely together to imagine a better future for consumers and do the hard work to implement the necessary change across their organizations. Technology companies need to think bigger and more creatively about solving for the in-store pieces of the puzzle. Existing players need to become less interested in developing the single winning “turn key” Digital Retailing solution and more interested in integrating their products with other products in meaningful ways.

And maybe, just maybe, Dealer Principals need to start seriously considering their Marketing Director as the next candidate for COO.

James Grace is the former head of Analytics Products for Cox Automotive, and currently the Founder and CEO of “Wizely” which helps clients navigate the complexities of the Automotive Industry. www.wizely.us

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