HomeDigital RetailingDigital Retailing — Missing Ingredient In Your Marketing Mix

Digital Retailing — Missing Ingredient In Your Marketing Mix

As per the NADA statistics from 2018, total dealership advertising expenditures stand at $4.51 billion . Advertising expense as a percentage of the total gross stands at around 8% or $642 per new vehicle retailed. Now if we go with John’s logic, we may have to find some accountability on $2.25 billion. We will leave that as a topic for another blog, but in this one we will focus on the bigger picture of marketing, of which advertising is a specific step.

Have you ever thought of how optimal is your dealership marketing mix ?

There is some debate in the industry whether digital retailing is a marketing expense or not. We made our thoughts on the topic clear here — https://www.autosuccessonline.com/refocus-your-dealership-marketing-with-digital-retailing/

As part of explaining the rationale behind our position, let us do a bit of Marketing 101 and see how digital retailing contributes to the marketing mix at your dealership.

4 P’s of marketing in simple and familiar terms:


A PRODUCT is a service or good offered to meet and generate consumer interest or demand. Car dealerships provide their customers with both tangible and intangible products ranging from new/used vehicles to warranties to vehicle service. A service of high quality is usually self-marketed, and this is what makes “customer experience” desirable in the marketing mix.

Digital retailing provides a “self-service” experience option for the customer who wants to start the buying journey online. If the “self-service” customer need to graduate to a “full-service” customer at the dealership, the hand off is pretty seamless with the right DR platform.


PRICE is the cost people pay for a product. Customers are smart and majority of them do a price investigation before making a high ticket purchase. The goal of a business is to match the product or service to a customer who is willing to pay for it.A smart business operator will always allow a customer to take a peek into his/her best offer on the product as long as it is not a losing proposition.

Digital retailing moves the needle from MSRP advertising to MAP advertising through a verifiable PII process.Here is a quick reference to the do’s and don’t of Dealership advertising. https://www.paa.org/Files/NADAAdGuide.pdf

When creating a typical marketing campaign or advertisement, the onus is on the dealership and the marketing staff/agency to make sure all the legal guidelines are met. As a dealer, you don’t have to look too much beyond the twenty groups to find instances of fines levied due to incorrect advertising.

Digital retailing works in real time with the accurate incentives, rates, monthly payment, warranty payments, that are retrieved at a VIN level and the chances of manual errors are pretty low.


Place refers to distribution or the methods and location that is used for delivering products or services to the target customers. Traditionally the dealership show room is where the distribution or delivery happened. With a state of the art digital retailing tool, the customers have an option to specify a delivery address (which could be out of state) and this makes remote delivery possible. All the taxes are calculated on the garaged location and the delivery charges are shown to the customer upfront.

Digital retailing changes the dynamics of distribution in the marketing mix. The dealership can meet the customer at their desired location to do the business. With E-Contracting, the entire deal can be easily created and finalized on a tablet with e-signatures.


PROMOTION is all about exposing the product/inventory through public relations efforts via advertising as well as word of mouth, direct mail, email marketing and social media.

“Promotion is a communication tool that encapsulates the first 3 P’s by putting the right product in the right place, at the right price, at the right time, with the goal of it being irresistible to customers.For example, In the digital age, the “place” and “promotion” factors are as much online as offline. Specifically, where a vehicle promotion appears on a dealership web page or facebook/instagram feed as well as which types of search functions trigger corresponding, re-targeted ads for the vehicle.”

Digital retailing helps the dealership to capture the customer journey on their website and then create targeted and personalized outreach/promotions.

As dealers, when you venture into the land of digital retailing, we urge you to consider the lay of the land on ;

“How much disruption it will cause to your existing sales process?

“How do you measure the ROI, should it be based on leads or conversion?

and more importantly

“How well does it fit into your marketing mix? Can your marketing team use this as well as your sales team?”

As a Digital retailing vendor, it is sometimes easy to be myopic and get sucked into increasing the profit margin by pitching sales transformation and continuous process training as part of selling our product. But we believe in the bigger picture of digital retailing and the role it plays in enabling marketing and sales teams of the dealership to function effectively. This enables the dealership to increase their online and showroom conversion ratio.

Better Results yields Better Traction and Better Retention

No one discounts the fact that a superior sales process enables better experience and increases the customer trust and transparency. We have been pioneers in the process transformation efforts for the LexusPlus program. If a dealer needs to transform the business model then the DR tool need to be part of the process change. To preach that process change is a prerequisite for digital retailing is totally incorrect and we don’t subscribe to that idea. There is no need for a digital retailing Czar at the dealership, it should be driven by the current employees who made your dealership successful in the first place.

We need to consider the fact that digital retailing should not be disruptive for the dealership, it just needs to be an incremental change in how sales opportunities are created, engaged and finally closed. On our part, we are looking towards a generalized digital retailing playbook that can cover a wider spectrum of the dealer community.

Drop a note if you would like to share your thoughts? We are all ears !!

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