Daily Automotive eCommerce Success

Online Shopping Cart for Dealers

When I was the Director of eCommerce for the David Thomas Auto Group we added Ai-Dealers Shopping Cart to our website September of 2007. This is an interview of one of the people who purchased a car from us using the Shopping Cart and not only what she thought of the experience but why she chose to use it. Word got out to the media about this new way to buy a car online so they wanted to cover the story. Unfortunately, by the time they did the interview, I had left the David Thomas Auto Group.

Ai-Dealer's Shopping Cart

Vendor Profile ~ Ai-Dealer
by : Digital Dealer

Ai-Dealer Helps Solve the Internet Lead-to-Sales Conversion Rate Problem for Dealers

An innovative online shopping cart for vehicles walks consumers through the entire transaction experience, resulting in higher traffic, greater trust and more sales


Consumers are buying everything from computers to sports equipment over the Internet in record numbers. They’re even paying their bills and doing their banking online, two activities that demand the utmost in security. But most car buyers seem reluctant to buy a vehicle over the web.

The simple truth is while 80 percent of serious, in-market vehicle shoppers do their research online, only 2 percent of those shoppers actually buy a vehicle online. Put another way, 98 percent of online shoppers looking to make a vehicle purchase potentially could make that purchase online—but choose not to. Or perhaps they are unable to buy online because their preferred dealership doesn’t offer that capability.

A 2007 Cap Gemini study found that 20 percent of in-market shoppers would be willing to buy their vehicle online, if they knew how—or where—they could do so. That’s up from 2 percent in 2001, a tenfold increase in less than ten years.

If the Cap Gemini study is a compass of what lies ahead, car-shopping habits are already changing direction and automotive retail dealers are about to enter uncharted territory.

Ai-Dealer…changing the brick and mortar interface
Ai-Dealer, founded in Dayton, Ohio, in 2005 by Brian E. Hoecht, is the first vendor out of the blocks with a dealer web site solution for converting online browsers into online buyers. Its answer is to bring car dealers and consumers together to sell more cars through what the company calls “shopping cart e-commerce.” Put simply, Ai-Dealer set out to adapt the online shopping cart model, used so successfully by Michael Dell and others, to the automotive retail industry.

“Our goal has always been to bring the full showroom experience online for consumers,” said Hoecht, founder, president and CEO of Ai-Dealer. “We wanted to empower shoppers to buy a car from a dealer without having to go into a showroom to do it, a fully desked deal, while keeping the online-offline buying process seamless. The result is more closed deals for the dealership.”

When it comes to using software to help solve a dealership revenue problem, Hoecht, a former dealership general manager, has some serious chops. He was an in-dealership process expert for DealerKid, an early and successful web-based customer relationship management provider that was eventually acquired by The Reynolds and Reynolds Company. After that, he was one of the original founders of  NeoSynergy, a provider of web-based enterprise automotive retail management, advertising and e-commerce software and services, and served as its COO and CFO. He’s been an automotive conference speaker and is a published author.

More recently, in addition to his current role at Ai-Dealer, Hoecht is a founding partner of  Nickelsen Partners, a car dealership consultancy that focuses on improving dealership profitability through the employment of best practices.

Hoecht’s experience combined with an eye for what both dealers and consumers want, as well as an appreciation for the latest in software technology, led to the birth of Ai-Dealer.
“By introducing self-serve, shopping cart e-commerce, we plan to change the role of the ‘brick and mortar’ auto dealership forever. We believe a web-based shopping cart is the next generation tool for dealers,” said Hoecht.

Underlying its shopping cart is a smart sales methodology known as “Persuasion Architecture,” a process designed to convey and build trust and confidence in the deal and the dealership. It’s a form of persuasion based on providing relevance to the site visitor at every turn; in short, when you satisfy your visitors’ needs, your conversion rates go up. Even the old Greek master of communication himself, Aristotle, believed that for persuasion to work it must be audience-centric.

Ai-Sales: Where online shopping meets online buying
Ai-Dealer's system, known as Ai-Sales, lets online consumers do everything that they would do if they came into a dealer's showroom and worked step by step through the transaction with a sales agent or finance manager. At the end of the process, the buyer has an accurate and complete calculation of what would be due at the time of delivery—and all from the comfort of home.

“Is it any surprise that consumers are getting wise to the fact that merely submitting an Internet lead is not a path to a better car buying experience?” said Hoecht.

Ai-Sales is a tab-driven, content-rich system that is integrated into a dealer’s web site and easy for consumers to use. To make sure shoppers are looking at current stock, the company gets nightly updates of a dealer’s inventory, as well as any incentives information.
 
It can take as little as one day and as long as three weeks to properly set up the shopping cart software on a site. Most of the setup time is spent working with a dealer to establish online pricing procedures. The Ai-Sales system neither dictates a certain mandatory pricing philosophy nor a trade-in valuation policy. However, the company will make recommendations about what works, recognizing full well that such decisions ultimately belong with the dealer.

How much does the service cost? There is a set up fee (the shopping cart is simple to use, but reasonably complex to set up). However, there is no monthly support fee and the contracts are all pay as you go, with no fixed term. Other data processing fees apply only to the activity processed by the Ai-Sales system so after the system is set up, you only pay for what works. In other words, you pay when a customer uses the Ai-Sales system to buy a vehicle from you.

The real beauty is that the e-commerce shopping cart delivers a branded, consistent, complete and legal shopping experience 100 percent of the time.

Pushing the e-commerce shopping cart… step by step
To use the shopping cart, a shopper answers questions by making selections or filling in fields on a form. When ready, the shopper clicks the Next button to advance through the process. A “Take a Tour” option helps new users get comfortable with the software and the process.

Although there are six tabs in the progress bar, the tabs are divided into two action sequences. First, they select a vehicle from the Vehicle tab:

• Vehicle tab – This tab includes a comprehensive set of vehicle data, provided by vehicle content industry-leader Chrome Systems. Separate tabs exist for Sticker, Exterior, Interior, Mechanical, Safety, Specs and Prices.

After selecting and viewing a vehicle, the buyer must create an online account—effectively this creates their “shopping cart”—with the dealership before continuing. This is a simple effort that can be finished in seconds in a single screen and benefits both the dealer and the shopper.

The dealer captures the lead, of course. But the consumer has information about a preferred vehicle that will be automatically updated. Since an online shopper may make several return visits before buying or coming into the dealership, his or her “cart” is always kept up-to-date. There is no dealership involvement required during the shopping experience except to review and approve the completed deal.

Once the account is set up, the buyer walks through the remaining five stages, represented by tabs, of the purchase process. These steps follow the same actions a buyer would take when buying a vehicle, in person, at the dealership:

• Shopper tab – This tab is used to gather personal information about the buyer and includes sub-tabs for sales taxes (based on zip code), credit (enter a credit score or automatically retrieve one), and account (basic contact information, as well as a how’d-you-hear-about-us marketing question).

• Trade-in tab – This tab enables the buyer to offer a trade-in and retrieve an estimated value for it from Kelley Blue Book.

• Finance tab – The Finance tab is used to help define the financial parameters of the transaction and includes sub-tabs for Loan Interest and Rebates, Monthly Payments, and Due at Delivery amounts.

• Extras – The Extras tab is used to select extended service contracts, such as mechanical protection and other protections (e.g., chemical protection, dent zone protection, GAP protection). It is also used to select accessories for personalizing the vehicle and insurances. The financial impact on the vehicle’s price of any selected extras is automatically calculated and reflected in the loan or lease amount, then summarized for easy review.

• Finalize! – This tab is used to review the decisions made in the previous tabs. It also includes a recap of all taxes and fees, account info, credit permission, and credit info. When ready, the buyer clicks the Buy button.

When they click the Buy button they are submitting a non-binding offer to purchase and are not obligated to buy. Typically, after they submit their offer, they will receive e-mail confirmation with instructions on what to do next. Again, the follow-up sales process and final pricing are determined by each dealer.

The 17-minute vehicle transaction
Although it’s often difficult to find early adopters in the automotive retail market, Ai-Dealer has signed 15 dealer clients, and has already delivered impressive results for them.
For example, last April a customer of one of their dealer clients completed a vehicle transaction online in 17 minutes, from start to finish, on her own using the Ai-Sales e-commerce shopping cart that was on the dealership web site.

Another Ai-Dealer client claims to have sold vehicles they would not have sold without the shopping cart. And still another dealer client notes that it will only take selling three cars to recoup their set up fee for the shopping cart. Since there is no monthly or maintenance fee, once the set up fee cost has been covered, everything else is pretty much gravy.

Perhaps the biggest way in which the shopping cart delivers value is in earning consumer trust, at least that’s the opinion of one dealership client. The client found that shoppers who start out with the self-serve shopping cart turn into very strong leads. The non-serious buyers basically weed themselves out through the self-serve process by what they put in their cart, leaving the sales team to work with only the most serious car buyers.

“Even with our system the number of non-buyers still greatly exceeds the buyers, but overall conversion of shopper to hot lead goes up tremendously. So does the responsiveness of consumers to a dealer’s follow up effort, since they are already engaged,” agreed Hoecht.

The big question remains: Will consumers really buy a vehicle online? Stay tuned. But don’t wait too long: eBay Motors sells a car online once every 60 seconds.

Did you want avatars with that?
To guide buyers through the self-serve process and to help dealers reach out to a younger demographic, Ai-Dealer offers one of the more unusual feature options ever posted on a dealer’s web site: avatars.

An avatar is a photo-realistic digital character. If you’ve ever played or watched a video game, you’ve probably seen an avatar, where they often represent a player physically. In the retail industry, for example, a popular avatar is Ikea’s Anna, an animated character designed to guide a site visitor through the Ikea web site.

Ai-Dealer emphasizes that the use of an avatar on a site is optional; their shopping cart works fine without it. Plus, the customer is in total control over the experience and may elect to engage or disengage the life-like animated sales assistant at any time.
    
The Ai-Sales system comes pre-loaded with several avatars, a mix of females and males with distinctive looks and voices. The digital character can be controlled to educate the consumer about any screen object or allow the dealer to push reinforcing or educational thoughts toward the consumer.

In addition to their standard avatars, Ai-Dealer will work with their artificial intelligence technology vendor to create custom avatars, a solution that is probably more useful to large dealer groups than to smaller individual dealers.

Dealers and consumers both win
In the late ‘90s brash new software companies thought they could sell vehicles directly to consumers via the web and, as they very publicly stated, put a lot of dealers out of business. Most of those brash companies soon found themselves out of business, courtesy of the dot com bust, but dealers survived the downturn.

Today, dealers can do more than just promote their inventory and services online. They can also sell their vehicles directly to the consumer using Ai-Dealer’s self-serve e-commerce shopping cart, taking consumers and dealers beyond mere phone calls and e-mails.
 
“No one else is doing this,” summarized Hoecht, in discussing their Ai-Sales solution. “Other vendors just automate the price response to the consumer, but no one else has a true online shopping cart process that is inclusive of everything that occurs in the showroom, from vehicle selection to financing to insuring. We’re the marriage of e-commerce and brick and mortar stores.”

For Hoecht and Ai-Dealer, it’s all about how improving the buying experience for consumers can result in more sales for dealers. Dealers, already working with low margins, will no longer have to rely solely on promoting price. They can now promote a user-friendly, web-based, self-serve way for shoppers to buy a vehicle.

Shopping carts standing by
In discussing the importance of marketing channels, the late Marshall McLuhan, known as the patron saint of Wired Magazine and once referred to as the “Oracle of the Electronic Age,” summarized the importance of modern media channels with this simple declaration: “The medium is the message.”

Ai-Dealer has added its own twist to that now-famous quote. For Ai-Dealer, their clients and their clients’ customers, the online shopping cart is the medium and the message is to “buy online.”

To find out how you can place the Ai-Dealer e-commerce shopping cart on your site, contact Brian Hoecht at 937-643-1189 or e-mail him at bhoecht@ai-dealer.com.


About Ai-Dealer

Ai-Dealer is a privately owned software company, based in Dayton, OH. It has the only shopping cart e-commerce application for new vehicle dealers to provide to their consumers and thereby differentiate themselves as “click and mortar” retailers. Ai-Dealer’s software adds on to a dealership’s existing web site and allows a consumer to self-serve all showroom activities. By guiding the consumer through a complete online shopping experience, the program gets consumers to identify themselves far beyond what typical web sites with lead request forms do. Once inside the shopping cart, it proceeds to generate trust by explaining the car-buying process. Typical dealership results are doubling and tripling a web site’s conversion rate (number of leads), 60 to 70 percent consumer response rates and a 20 to 30 percent shopping cart consumer versus vehicle sold rate among dealers with solid Internet sales follow up processes.

 For more information, please visit its web site at http://www.ai-dealer.com.



Brian E. Hoecht
President / CEO
Brian E. Hoecht is the founder, president and CEO of Ai-Dealer. He is a CPA in the US, a chartered accountant in Canada and has a Business degree from one of Canada’s top universities. He articled with Deloitte & Touche in Toronto and prior to getting into software development, worked many years as a car dealership CFO, as well as general manager. In software, he has been director of operations in the OEM group at Reynolds & Reynolds, and prior to Ai-Dealer, co-founded both Nickelsen Partners and NeoSynergy as an entrepreneur.

Link to article: http://www.digitaldealer-magazine.com/index.asp?article=2171

Follow up on the Shopping Cart

This is an article about someone who used the Shopping Cart when I was at the Subaru stores.  Very interesting input from the customer.

Download DallasMorningNewsShoppingCart.pdf

Online Shopping Cart for Dealers

December 2007 Dealer Marketing Magazine: Download DecDealerMarketingMagazine.pdf

AutoNation: Can cars sell online?

 

Did you read the article in Automotive news about AutoNations "AutoNation Direct"?  Here is the opening line:  "AutoNation Inc., the nation's largest dealership group, is testing start-to-finish online car sales in Atlanta". 

There's a buzz right now about Shopping Carts and for good reason.  In fact, when I first heard about using a Shopping Cart for selling cars, I told more than one lead provider, watch and see how fast this grows.  The timing is now and consumers want it.  The big question is, how many dealers and how fast will they get it and run with it?

It reminds of the following saying.

There are three kinds of people:
     1) Those who MAKE things happen
     2) Those who WATCH things happen
     3) Those who WONDER what happened

Haggling Starts to Go the Way of the Tail Fin

Did you see this article in BusinessWeek? CLICK HERE

The timing is now for the Automotive Shopping Cart.  Do you have yours?

I enjoyed reading the comments as well so I pasted them below:

Return to Story

Nickname: Al

Review: Finally. I'm 67 years old and have had 10 new cars and several used ones. The only time I didn't feel cheated was on three different VWs and three different Saturns, and they had fixed pricing. Now if you could do the same thing for financing it would be a perfect world.

Date reviewed: 

Oct 23, 2007

12:19 AM

Nickname: Ted

Review: Good luck Sid. It will not work. Ask Gordon Chevrolet

Date reviewed: 

Oct 22, 2007

7:51 PM

Nickname: Tony

Review: Selling Scion on a "pure price" concept is much different than trying to do so at a

Toyota

store where that is not the norm. The reason being is that ALL Scion dealers are required to sell this way so a Scion dealer does not have to worry about his competition cutting his throat. Customers say they don't want to "haggle" but everytime I give someone my "best" price they still feel compelled to negotiate or shop my deal and typically don't think twice about cutting a deal elsewhere to save $50, regardless of customer service. It is a shame that people don't put more value in service.

Date reviewed: 

Oct 22, 2007

7:51 PM

Nickname: JoeW

Review: When I see a dealer advertising a $900 discount on a "fixed price" car that includes all rebates in the fine print disclosure at the bottom of the ad, but I know the car has a $2,000 rebate, no amount of spin can convince me to pay essentially is $1,100 over MSRP. Nice try; there are way too many dealers for me to fall for this crap. If I have to take a $150 plane flight to pick up a car in another city that saved my $1-3,000, I'll do it. Some times these dealers shock me with their arrogance.

Date reviewed: 

Oct 22, 2007

5:36 PM

Nickname: Boofors

Review: Gee, how could such a "foundation" story for this sales strategy have left out the biggest player in the "No dicker sticker" field -Saturn!

Date reviewed: 

Oct 22, 2007

5:00 PM

Nickname: billd

Review: Auto sales is sorely needing a new business model. Most people would prefer to endure a root canal to car shop. Most new car dealers no longer even put the new cars in a showroom. That forces you to find a car "sales consultant" who gets a copy of your driver's license before you can even see if the car is a fit. He then starts pestering you with follow up calls until you tell him you bought a competitor's car. Do that at 20 dealerships and the annoyance becomes intolerable. Why does a car purchase have to be such an annoying ritual? Why not sell cars at Wal-Mart?

Date reviewed: 

Oct 22, 2007

1:57 AM

Nickname: AskPatty - Automotive Advice

Review: Dealerships can benefit from improving their approach and communication skills to women for sure. I hear stories from women every day about how disappointed they are with the experiences they are having at car dealers. AskPatty.com trains and certifies automotive retailers to become female friendly certified. Go to http://www.askpatty.com to learn more. Jody DeVere President AskPatty.com

Date reviewed: 

Oct 20, 2007

11:54 AM

Nickname: wv399

Review: I'm STUNNED that in an article about no haggle pricing there wasn't a single mention of Saturn, the brand that introduced the concept to Americans in the first place!

Date reviewed: 

Oct 19, 2007

4:06 PM

Nickname: a

Review: I'm all for saving time, but how do I know I'm getting the best price?

Date reviewed: 

Oct 19, 2007

12:50 PM

Recent purchase from the Shopping Cart

Recently we had a very interesting purchase from the shopping cart that I would like to share with you.

June/07 - This past June, we had a woman send in a lead via our Dallas website.  She followed up by not responding to the salesperson's email or phone calls.  Below you will find the details of how the sale progressed.  As you can see, she became more and more involved in the process.

9/14 - Entered our Shopping Cart and looked at one car

10/1 - Logged back into the Shopping Cart and looked at three cars

10/1 - She finally answers the phone and is willing to chat with the salesperson

10/2 - Looked at three more cars

10/3 - Looked at one car

10/4 - Looked at seven cars

10/4 - Set appointment to come in on 10/6

10/5 - Looked at four cars more cars

10/6 - Came in for appointment, drove two cars and purchased a car. 

$944 front-end gross, $566 back-end, plus holdback.

Its interesting to see how she wouldn't answer the salesperson's emails or phone calls but after logging in for the second time to look at cars she is now seems to be ready.  Comfortable, I think because we let her shop at home/work where she was more comfortable.  We let her look at discounted pricing, financing and payments without asking anything of her (except her email) and there was a certain comfort level and trust that was built up.

We give everyone a questionnaire that uses the Shopping Cart.  Below are some of the questions and her comments:

How was your over-all experience using the Shopping Cart and then coming into the dealership?  "Overall, the experience was a good one.  I liked having the ability to see all the Dallas and Plano inventory in one place.  I loved being able to input "ideal" price and see what selling price would come up.  Also, a lot more info on individual vehicles than the Dallas and Plano websites - liked seeing all features listed there and pictures of inside and outside of vehicle".

Did you like the ability to login and look at selling prices of all of our inventory?"  Yes I did - was very helpful in narrowing down the options so I could focus on a few cars at purchase time".

Do you think all dealers should have this feature?  "Definitely!" 

Buy a Car Using a Shopping Cart?

I found myself myself sitting at home tired after a day of cleaning out the garage.  It was in the upper 90’s so I was hot, tired and hungry.  I told my wife I’m ordering out.  Of course I didn’t look in the phone book mainly because I don’t even know if we have one so I started surfing the web.  You can never go wrong with pizza so pizza it is.  I created an account with Pizza Hut and looked through their specials.  I found some good specials and next thing you know I had ordered a pizza online.  I didn't talk to a soul, I just clicked away.  About 20 minutes went by when the doorbell rang.  Is that the pizza?  Sure enough, the pizza had arrived.

Have you ever called in and asked them what the specials were and then talk back and forth between the restaurant and the rest of the people in the house and then tell the restaurant, I'll call you back in a few minutes?

Thank goodness, no more of that!  Now I simply login to my account, look through the specials, discuss it with everyone and place my order.  In fact, as I'm typing this, my wife just placed an order for some wings. Tommy want wingy.

Which brings me to my current question:  If a person could create an account and login so that they had full access to inventory that showed them not just the MSRP but also the discounted selling prices, cost of warranties, accessories and even gave them interest rates and payments, all from the comfort of work or home - would they do it?  If you let them sneak in the the back door, so they could do just about everything they would do in a dealership, would they do it?  Would they become more engaged, more interested and dig deeper into the process without feeling any pressure whatsoever, would they prefer it over going into a dealership?  Not only would they do it but many would prefer it.

Welcome to new (well as far as the car biz is concerned), wonderful World of the Shopping Cart because it's here!