As technology continues to advance at a rapid rate, so too do the number of digital deal-building tools available to consumers looking to buy a vehicle, writes Alex Wright.
They now have the capability to combine everything from vehicle price and part exchange to finance, insurance and add-on products.
But do these platforms actually simplify the buying journey, potentially impact Consumer Duty compliance or merely transfer complexity onto the customer?
How digital deal builders work
James Tew, CEO, iVendi, said that deal builders have both pros and cons, fitting into some motor retail models, but not others. Where the process is highly structured and tends to take place in a single setting, such as a customer walking into the dealership and buying a car, he said that they can work well, but they do tend to lack flexibility.
“A vehicle sale usually breaks down into four key parts – car choice, finance, part exchange and add-ons,” said Tew. “Consumers today will usually follow a journey that means each element is often dealt with individually or over both a number of online sessions and showroom visits. Deal builders can easily be too rigid to work dynamically in these highly individualised scenarios.”
Another issue, said Tew, is that the use of deal builders moves from being a consumer enabler to a revenue driver. Instead of removing points of friction from the sale and allowing the buyer to happily drive away as soon as possible, he said that they may include several steps designed to take the customer, for example, through a variety of value-added products (VAPs).
This, he said, isn’t the best use of the technology, nor an effective way to sell VAPs.
Tew added that should also be no difference in the level of compliance offered by deal builders compared to any other dealer platform used in the showroom or online. An effective dealer sales platform, he said, should provide processes and record data that meets Consumer Duty requirements.
If there’s any question mark over the supplier’s ability to deliver this, he said that dealers should move on.
Consumer Duty and connected retail
Adam James, head of product at Codeweavers, said that connected retail solutions can bring a host of benefits to dealers, from increased conversion rates and reduced operating costs to better visibility of customer journeys and built-in compliance.
However, what stands out, he said, is that these are experiences consumers not only want, but increasingly expect from today’s retail environment.
“Our research found that, when asked what would be most valuable during the research and buying process, UK consumers consistently prioritised connected retail experiences,” said James.
“More than half (50.8%) wanted to see which vehicles they could afford based on a monthly budget, while 44.8% wanted consistent offers and pricing across both online and in-person channels. This highlights that UK consumers expect digital research, finance exploration and dealership interactions to function as part of one connected buying experience.
“By bringing all these elements into a single, user-friendly journey, consumers gain increased confidence that they understand the deal and are able to advance through the buying journey in an easy, frictionless manner.”
On the flipside, James said that the main challenge with connected retail solutions arises when the different tools and systems aren’t properly integrated. When this happens, he said that it can create friction, slow the sales process and negatively impact the customer experience.
“This is particularly important because buyers increasingly expect a seamless journey between online research and dealership interactions,” said James. “Our research found that 39.1% of consumers consider a smooth transition between online and in-person interactions important during the buying process, while 44.1% want to be able to move between online and in-store channels without having to repeat information.”
All of these tools also play a significant role in compliance, said James. For instance, he said that using integrated digital finance calculators and multi-lender platforms ensures clear commission disclosures and predictable costs.
Added to that, he said software platforms log structure data across every stage of the customer experience, ensuring regulators receive the required outcome-based evidence and consumers stay informed at every step of the journey.
Simplifying the online buying journey
Karolina Edwards-Smajda, chief product officer at Autotrader, agreed that digital deal-building tools can play a vital role in simplifying what has traditionally been one of the most complex parts of the car-buying journey.
For buyers, she said that the benefit is being able to understand more of the deal earlier in the process, with a more joined-up digital journey helping them build a clearer picture of what’s affordable, what’s available and what the next step might look like.
“That doesn’t remove the role of the retailer,” said Edwards-Smajda. “In many ways, it strengthens it. By the time a buyer makes contact, the retailer can have a much richer view of what that customer is trying to achieve, which can make the conversation more relevant, more efficient and better informed from the outset.
“Importantly, digital journeys also create opportunities to keep buyers moving when they are still researching and not yet ready to enquire, helping more of them progress towards a meaningful conversation with the retailer.
“Crucially, the value is not only in helping buyers complete more of the journey online, but in the insight those digital interactions can create. When a buyer takes practical steps such as exploring finance, valuing a part-exchange or signalling reservation intent, it gives retailers a clearer picture of their needs, preferences and readiness to act.
She said that through tools such as Buying Signals, that context can help retailers understand each opportunity more fully, prioritise the most engaged buyers and tailor the follow-up conversation more effectively.
“It also means buyers can continue progressing their purchase outside traditional trading hours, allowing retailers to start the day with a clearer view of the opportunities waiting for them.
“The best digital retailing tools aren’t about replacing the human relationship at the centre of the sale; they’re about removing friction, giving buyers greater confidence and helping retailers focus their time on the conversations most likely to convert.”
Why dealer system integration matters
Adrian Nash, chief product officer at Keyloop, said given that Keyloop data shows the average dealer uses eight to 10 disconnected systems to close a single deal, it’s clear effective integration of technologies and tools for deal-building and other key processes can make a huge difference.
In that vein, he said Keyloop has worked with retailers across the UK to define pain points through the sales process, with common themes including fragmented systems, limited customer visibility and time-consuming lead management.
“We have started to pilot our new Sales Hub solution to address these challenges,” said Nash. “It is a true end-to-end sales management system, with AI built in from the outset to future-proof key processes and maximise conversions while customer expectations continue to evolve.”
Unified management platforms, said Nash, are also invaluable for ensuring consumer compliance.
In December last year, he said the Financial Conduct Authority (FCA) published a statement clarifying how collaborative retail products and services must apply existing Consumer Duty rules, meaning that, in the event of an audit, such as the FCA’s ongoing motor finance redress, these tools ensure dealers can provide customers with standardised disclosure.
Lucy Risebrow, finance and operations manager, Chief Mechanic Limited, said that the key benefit of using these tools for the customer is it enables them to progress much further through the car buying journey online, when they want to and at their own pace.
By bringing the whole transaction together, she said that the customer can see how each part may affect the overall deal rather than traditionally having to manage each element separately.
For the dealer, Risebrow said that there are clear practical benefits too. With customers progressing the deal mostly themselves, she said that this reduces administration, freeing up dealers to focus on customers who want or need the personal support.
However, Risebrow added that there’s a potential risk if the customer is presented with all the car-buying journey elements at once this could make it more complicated for them. Therefore, she said that the tool’s design is key.
“Customers don’t necessarily want to make every decision at the same time or be bombarded with finance questions when they just wanted to look at car and potential add-ons, they should be able to progress through each stage at their own pace, with the dealer on-hand to provide assistance when needed,” said Risebrow.
“Having a deal builder means that the customer can pick and choose what and when they answer but they don’t have to provide information repeatedly or start the process from scratch if they want to make a tweak, and with a fully integrated live chat tool dealers can be available to provide support whenever it’s needed.”
Digital deal-building, said Risebrow, can also help dealers comply with Consumer Duty, but having the tech doesn’t guarantee compliance. A well-designed online journey, she said, can make it easier for customers to understand what they are buying, what it costs and which products they are choosing, while allowing customers to progress at their own pace.
“Support is still important,” said Risebrow. “Customers should be able to get help when they need it, for example through live chat, and their data must be handled appropriately.
This issue will be explored further during AM’s free webinar, Identifying the innovations that count, at 2pm on Thursday, 24 September.
Our expert panel will examine how dealership leaders can distinguish technology that produces a meaningful return from tools that merely add another layer to an already crowded technology stack.
Reserve your place for the AM Innovation Week webinar now and follow AM throughout Innovation Week as we examine innovation in marketing, sales, aftersales and dealership culture.
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