Online Selling Overview and Vendor Guidance: What Exactly Are Online Sales and What Should
Dealers Consider When Engaging Vendors?
Brad MillerDirector, Legal and Regulatory Affairs and Senior Counsel, Digital [email protected]
Stefan DrechselFounderDealerTech [email protected]
These presentation materials are provided as guidance only and are not intended as legal advice. Dealers should consult their lawyers and professional advisors for details about state or local laws and their specific situation, and must make their own independent business decisions. The presentation of this information is not intended to encourage concerted action among competitors or any other action on the part of dealers that would in any manner fix or stabilize the price or any element of the price of any good or service.
Topics Covered in Today’s Presentation
• What Exactly Is An Online Sale?
• What Should I Consider When Hiring A Vendor to Assist?
• What Vendors Do I Need to Hire To Assist Me?
• Questions
NOTE: Legal and Regulatory Issues with Online Sales
https://www.nada.org/Legal-and-Regulatory-Implications-Online-Sales-Form/
Why Now?• Currently more than 22 states with some form of restriction
on in-person sales• About 16 states with “online” sales only• About 6 with showrooms open by appointment only• Hundreds of additional local restrictions• Check with your state and metro association• Work with attorney and local law enforcement/health
officials to ensure your practices are permitted
What Exactly Are “Online Sales?”
• Terminology and Practice Vary– “Digital Retailing” - includes much more– “Remote Sales”
• Bottom Line – performing “virtually” what you currently perform in person in your dealership
• “Pure” online sale – all steps in sales process completed online with only physical interaction being delivery, which is completed away from the dealership location.
Extended Digital Dealer Experience
DigitalRetailing
DigitalShowroom(SRP/VDP)
Digital Advertising
DigitalMerchandising
Digital Retail Levels
Digital = paperlessretail in-store experience
Hybrid digital online andin-store experience
End-to-end onlinecontracting/delivery
Lead Super Lead PO/DeliveryQualifying Closing
Guided Self-Service
20-25% 5-10%-50% F&I Penetration
Lead Form
DealJacket
Sale
s Pr
oces
sCu
stom
er
Expe
rienc
eO
nlin
e De
liver
able
Dealership Retail Experience (Pre-COVID)
Contract-ing
F&I &Compliance
DealBuilding
VehicleSearch DeliveryShow
room
Sales Associate Sales Manager F&I Manager
F&I Menu /Compliance
Digital / e Contracting Reg/Titling
…
CRM Desking
Contract-ing
F&I &Compliance
DealBuilding
VehicleSearch DeliveryShow
room
Sales Associate Sales Manager F&I Manager …
VehicleSearchOnline Deal
Building
Internet BDC Manager
Dealership Retail Experience (Pre-COVID)
SRP/VDP
F&I Menu /Compliance
Digital / e Contracting Reg/TitlingCRM Desking
Contract-ing
F&I &Compliance
DealBuilding
VehicleSearch Delivery
Sales Associate Sales Manager F&I Manager …
VehicleSearchOnline
Dealership Retail Experience (COVID)
Digital RetailingSRP/VDP
Contr-act-ing
F&I &Compliance
DealBuilding
?Internet BDC Manager
Showroom
F&I Menu /Compliance
Digital / e Contracting Reg/TitlingCRM Desking
Dealership Retail Experience (Future)
Contract-ing
F&I &Compliance
DealBuilding
VehicleSearch
HomeDeliveryOnline
Contract-ing
F&I &Compliance
DealBuilding
VehicleSearch DeliveryShow
room
Omni-Channel Retailing
Exploring Digital Retailing
OnlineMarketplace
NeedsAssessment
VehicleConfiguration
VirtualWalk-Around
OnlineQuote (MSRP)
OnlineDesking
Online DealData
Trade-inOffer
Online Credit& Lender
ID Verification& Compliance
OnlineAftermarket
OnlineCheckout (DC)
Econtracting Digital DealDelivery
(Assisted)Remote Sign
Local FileUpload
Test Drive VehicleDelivery
Registration & Titling
First ServiceAppointment
Veh Search
Deal Building
Contracting
Delivery
F&I & Compliance
Online Desking Vendor• Software that includes all relevant variables to provide payment and
deal terms– Incentives, taxes, fees– Integration w/CRM, DMS, etc.
• Could include many different features/products, e.g.– Online Payoff Quotes– Online Menu Presentation – PPP Presentation
• Crucial part of online retailing – critical to get this right– Compliance and customer trust
Online Trade Evaluation Platform
• Trade in evaluation is very difficult dealer issue with remote sales – especially in current environment
• Will involve important and difficult business decisions
• Technology vendors may be able to help– gather most relevant pictures, videos and other data from
trade, integrate with used vehicle valuation software, and provide a concrete trade value
• Equity is a key variable that must be considered
Online Credit Application/Decisioning
• Secure method for obtaining and running credit online– FCRA considerations are important here
• Offers shopper the ability to submit a credit application and potentially receive a credit decision or preapproval online– Understand difference between “pre-qualification” and an actual
credit check
• Follow same rules for running credit in person– Need a “permissible purpose”
Online ID Verification Tools
• ID theft threats are heightened with online sales
• Can be more difficult to verify identity of a credit applicant or vehicle purchaser
• Consider technology tools
• Coordinate with finance sources– Recourse risk!
E-Contracting Vendor
• Vendor to take the fully negotiated terms from the desking tool and put it in a compliant contract– Many compliance issues– Must be acceptable to your finance sources
• Signing and approving documents online to replace traditional paper financing documents.
• Customers can review and sign documents on their computer– Ensure that any tool is compliant in all formats (mobile, size, etc.)
E-Contracting Vendor
• An area where a vendor will likely be indispensable
• If none yet – exercise caution in choosing – trust but verify• ESIGN and Reg Z compliance (discussed below)• System must address any state/local issues• GLB Service Provider / safeguarding provisions• Mobile applications? Meet disclosure/other requirements?
• Coordination / approval from finance sources
NOTE: Some Documents Still Need Wet Signatures
• Nearly all states still require wet (original ink) signatures for title transfers and vehicle registrations. E.g., – New York requires that signatures on the Certificate of Sale (the MV-50)
must be written in ink or indelible pencil.
– California requires wet signatures on certain DMV forms such as Reg 262 and Reports of Sale.
• Notary, Power of Attorney, other possible wet signatures required
• Federal Odometer Disclosure statement – up to the states
Remote Signing Portal
• ESIGN compliant way to obtain signatures from the customer (for all forms that can be ESIGNed)
• May be part of E-Contracting platform, but must be secure– Digital signatures (encrypted keys)– Similar to some state E-Notary concepts
• Should conform to industry standard protocols
Secure Document Vendor
• Software to securely send, receive, and store sensitive customer documents and information – Including for obtaining stips, verifying ID documents, etc.
• DO NOT SEND SENSITIVE INFORMATION VIA EMAIL– Generally not secure
• Several well-recognized tools (OAuth, etc.)
• Where are documents stored? How can you/customer access?
• Who is responsible for security and in event of breach?
Vendor Considerations• Compliance - TRUST BUT VERIFY!!• No specific requirement to outsource
– But practical realities may dictate
• If you choose to engage:– Likely access to sensitive data– Privacy Rule and Safeguards Rule implications
• Must agree not to share/use data• Must agree to protect data
• Must get vendor to agree to certain contract provisions– See www.nada.org/dealerdata for service provider template
Vendor Considerations (cont.)• Ensure Vendor Complies with Regulatory Requirements
– ESIGN– TILA/Reg Z– Fair Credit Reporting Act (FCRA)– Safeguards Rule– Telemarketing Rules
• Other issues– Remote employee access– Consumer access (mobile/otherwise)– Audit rights– Integration issues
Digital Retailing Offerings
DR ExtensionsJourney Orchestrator OEM Solutions Consumer Marketplaces
• OEM-specific ecommerce platform
• See Journey Orchestrators
• Existing bolt-on (e.g. desk, web, chat, F&I)
• Extension to current DealerTech offering
• Deep functionality of in-store & digital module
• Partnership integrations
• Consumer-facing ecommerce platform
• Digital-first retail experience (in-store?)
• Shared customer relationship between dealer and marketplace
• DME competition• Modular approach?• Handover w/in-store
DealerTech (DMS,…)?
• Competing OEM offerings for groups?
• End-to-end approach?• Flexibility of UX and
workflow?
• Dealer control over journey (pricing, F&I penetration, trade,…)?
• Dealer-branded ecommerce platform
• Focus on UX: workflow & omni-channel
• Flexible digital & in-store retail experience
• Conversion-approach: lead => PO/delivery
Digital Retail Vendor QuestionsModular versusend-to-end approach
Digital Retail Customization
Increase conversionand throughput
Omni-ChannelExperience
• What stages are covered: vehicle search w/test drive, deal build w/trade-in, F&I/Compliance, econtracting, delivery?
• Do we buy the e2e process or solution modules?
• Can we create an electronic deal jacket w/esign?
• What 3rd parties or can use our partners (e.g. F&I)?
• What integrations w/our dealership system stack (DMS, CRM, Desking, F&I, Dig. Contracting,…)?
• Can we adapt to our dealership processes (e.g. when present F&I/access., capture lead, run credit)?
• What DR elements to customize (e.g. MSRP vs. MAP vs. Dealer price; what deposits to put down,…)?
• Can we build deal based on our existing inventory (SRP/VDP) or on OEM config.?
• How to evaluate trade: VIN, pics, qualifiers, 3rd parties?
• How calculate trade-equity?• How to onboard/train DR?
• How to increase conversion (e.g. educational elements in F&I/trade-in section)?
• How is handover from OEM website to our VDP/DR?
• Do you send alerts if users bounce in the process?
• Do you offer remote interaction/intervention (chat, cobrowsing, video,…)?
• When to run credit?• Request benchmarks for e2e
journey (lead capturing, credit app, F&I penetration, Accessory sales,…).
• Where is the CX: dealer web, subdomain, DR app/lp?
• Desktop vs. mobile?• How do users save search
history/results, deals,…?• How to guarantee “omni-
channel” UX (in-store/web)?• What are in-store sales
capabilities (e.g. iPad tool)?• How to push & process
consumer data (data safeguards, meta data, duplicate leads,…)?
• How do we measure/control remote selling/road to sale?
Digital Retailing Bottom-Up Approach
Price/Service: modernize the dealership experience
Strategy: build a mobility strategy around the consumer
Promotion: branding, data, photo, video, CTA
People: coach personal & digital engagers
Vision: dealership experience & value propositions
Processes: simplify in-store & online process
End-to-end digital purchase with Home Delivery
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Online Selling Overview and Vendor Guidance: What Exactly Are Online Sales and What Should
Dealers Consider When Engaging Vendors?
Brad MillerDirector, Legal and Regulatory Affairs and Senior Counsel, Digital [email protected]
Stefan DrechselFounderDealerTech [email protected]
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