There’s no holding back anymore. For auto retailers, the choice is between digitization or being left behind, according to Alex Vetter, the longtime CEO of Cars.com, the 25-year-old third-party marketplace company.
“If you’re not trying to digitize your operation and make everything begin online, you’re out of touch with what the consumer is expecting,” Vetter told Automotive News at last month’s NADA Show in Dallas.
Digitization must be a top priority for dealers everywhere in today’s market, said Vetter, a founding executive of Cars.com, which has branched out to retail technology products and services.
Vetter, 52, spoke with Staff Reporter Mark Hollmer and Retail Director Amy Wilson about market evolution, consumer expectations, the journey forward for digitization and more. Here are edited excerpts.
On addressing current consumer expectations for digitizing auto shopping experiences:
Over the next several years, as dealerships wrestle with not having the same profitability levels they once enjoyed over the last three years, they’re going to have to find a way to run their business or technology much more efficiently than what they historically have.
On what successful tech-savvy dealers look like:
The good ones know what’s flying ahead, and they know that they’ve got to use this time to figure out how to run their business more efficiently. We’re talking to them about a lot of ways that we can accelerate the way that they do business [to help] get consumers further along faster, so that the time in-store takes minutes, not hours.
On why increasing the use of tech for trade-ins is a key digitization target:
Appraising vehicles in minutes is a far better consumer experience than making somebody wait 45 minutes because the guy who does appraisals is busy with a customer.
That expectation has changed dramatically, and consumers don’t have the patience anymore [and] expect what they’re expecting in other retail categories, which is for everything to be instantaneous and very tech forward.
On websites’ claims about avoiding dealerships during the sales process:
A lot of other websites will position themselves as the way to get around the dealer. It’s kind of a gimmick. We promote the dealerships in the experience but tell the consumer: “Here’s who gets you into the store in the fastest time. Here’s who has the highest service and user satisfaction ratings.” We harvest over 10 million user reviews every month, and so consumers are able to use Cars.com to not only find out what to buy, but where to buy it and increasingly what they should be expected to pay.
On some dealers’ resistance to tech modernization:
The retail system has evolved so much in technology over the last years. But has it evolved everywhere? No. There are still many dealerships that would love to [simply] say they will figure it out. But if you look at the younger generations, they’re using technology at four to five times the rate of what the average owner-operator is using.
On how much further less tech-savvy dealers need to go:
Dealers who are winning the game are those who are embracing a digital-first, fully transparent online [model]. Prices in the store are the same ones you see online. You can contact our people directly from our website, and you can begin the journey online, and we can do everything you want. These are the dealers who are moving the industry forward and are the ones taking market share.