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For dealers, the digital retail space is filled with more hype than ever. Digital retail companies promise a future with increased conversion rates, higher gross margins, and better customer experience to boot.
And the truth is…it works! Digital retail can do all of those things and more. But there’s another truth most vendors won’t tell you. What really matters is not IF the conversion rate increases for customers that use digital retail, but how many customers per month actually use your digital retail platform.
Can you really say digital retail is delivering and moving the needle at your dealership if less than 5% of your customers even use your digital retail platform? Put another way, is digital retail really making a difference if you only sell one car per month through it?
I’d argue it’s not.
The sad reality is that most vendors today are so focused on proving their platform, they ignore the impact it ultimately has for the dealer.
If digital retail is going to make a difference, then it should make every sale at your dealership more efficient. Not just 5% or even 10% of sales.
This is why engagement is the single most important metric you can track for digital retail. Engagement not only tells you if your platform is working but highlights if enough customers are working with your platform to move the bottom line.
It’s easy to calculate too!
Number of cars sold that touched a digital retail platform (online or in store) divided by the total number of cars sold = Engagement Rate
Example: 30 customers worked their deal through digital retail out of 150 total cars sold = 20% engagement
It's a simple formula with simple criteria for success: The more customers that engage with your digital retail platform, the better.
So next time you’re evaluating your digital retail platform, make sure you look at the engagement! If you really want to understand your success, it cannot be ignored.
In my next blog, I'll talk about what factors affect digital retail engagement and outline clear steps for how you can improve your digital retail success without switching platforms or vendors.
Of course, if you are interested in switching to a new digital retail platform, we can always have that talk too J