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Auto Dealer Sees Digital Transformation Take Hold

Dealers have long used the digital channel as a virtual brochure. More and more, it’s becoming the tool to close deals.

Jon Gray’s Orange Coast Auto Group in Costa Mesa is a good example.

The owner and general manager of the Chrysler, Dodge, Jeep and Ram dealership, reported to be among the top 5% of Fiat Chrysler Automobile dealerships nationally, has seen digital selling’s importance grow since the March rollout of an online selling platform.

The platform is supported by Irvine-based Digital Motors Corp.; the dealership is among the first in the country to use the startup’s technology.

The tech company’s platform helps dealers not only push vehicle information out, but also transact; the firm says it offers a highly customizable “holistic, end-to-end buying experience” that allows consumers to browse cars, structure monthly payments, and go as deep into the car-buying process as they wish online.

The platform’s working, according to Gray.

About 22% of Orange Coast Auto Group’s sales in May came from the digital platform, and that percentage has remained about steady as the months have passed.

“In Q4 of ’19 we had made the decision that in 2020, we were going to increase the options of and increase the efficiency and lessen the time it takes to purchase a vehicle,” Gray said.

That meant “removing some of the traditional friction points,” Gray said. “Digital retailing, although it wasn’t a new theory, it was still not totally adopted by the industry or the consumer. But it was something that we started poking around with.”

Investor, Adviser

A year ago, Gray announced he was working with Digital Motors, an auto-focused fintech led by Chief Executive Andy Hinrichs, the co-founder and former chief executive of fellow Irvine automotive startup AutoGravity Corp.

Hinrichs earned a Business Journal Excellence in Entrepreneurship award in 2018, while with AutoGravity. He left the company shortly after that, and started Digital Motors with a pair of other former AutoGravity execs.

Gray said at the time the 2019 deal was struck that he personally invested in Digital Motors and had come onboard as a chief strategist and adviser.

The platform for the dealership along Harbor Blvd. launched earlier than expected out of need after the shelter-in-place order took effect.

“The capabilities for the consumer, it’s really a scenario where they’re able to control how deep into this type of purchasing funnel option that they choose,” Gray said. “In our case, if you click on the ‘buy from home’ call to action button on our website, you can go A to Z through the process if that is your cup of tea and we can do all the paperwork and deliver the car to you if that’s what you want to do.”

Consumer Control

Buyers also have the option of going partially through the process online and then completing the deal in-person.

“Ultimately, I think it provides freedom and flexibility that hasn’t been an option for the consumer,” Gray added.

Most buyers, about 80%, are still completing the transaction at the dealership, but are doing six or seven of the car-buying steps online before closing the deal on-site, according to Gray.

People ultimately want control over the variables of a transaction and want it on their timetable, while also appreciating what Gray pointed out can only be had in person. “Ultimately, everybody likes the new car smell and everybody might [not] understand how Apple Play works.”

Sales Up

Gray credits the online selling platform and the dealership’s sales associates for the slight year-over-year boost seen in unit sales when measuring the June through October period. He’s not counting the March through May timeframe when much of the country was under strict stay-at-home orders and struggling just to find toilet paper and water on store shelves.

For the six-month period ended October of this year, the dealership sold 1,238 vehicles, up from 1,185 sold a year ago.

Dodge Ram trucks and Jeep continue to be the brands driving overall sales at the dealership.

Gray said his dealership will continue its focus on creating efficiencies in the selling process, pointing out it’s a never-ending job.

“The days of spending hours and hours in a transaction isn’t good for the consumer or for us, so we’re looking at all the touchpoints of a transaction and figuring out what is necessary, how can we do better and how can we give the customer more control.”

“About the time you solve that puzzle, there’s another puzzle to solve. It never seems to stop.”

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