The pandemic may be recognized for ushering in record-setting returns for auto retailers, but its most lasting impact may be jumpstarting the digital transformation of the industry. Between customers’ growing preference for digital tools to research and purchase vehicles and dealers’ interest in technology that enhances operational efficiency, the adoption of digital solutions has accelerated. Enabling cash to move through the business with greater speed, security and efficiency is now a foundational goal for dealers — one that directly contributes to business value. A Deloitte study found that 68% of respondents ranked digital transformation as the single most important investment to drive enterprise value.1 It’s no surprise that dealership owners are seeking ways to leverage technology for growth. WHY PAYMENTS ARE ESPECIALLY IMPORTANT FOR DEALERS There’s good reason for dealers to focus on improving their payments processes. As Jason Smith notes, “Dealerships are cash- and capital-intensive businesses. Look at the variety of payment types: debits and credits with consumers and suppliers, vehicle sales and service transactions and used vehicle purchases — the size and volume of transactions can be staggering.” “Dealers want to know how to collect money faster and pay it out more efficiently, all the time recognizing that their cash intensity makes them a target for fraud,” adds Smith. “The typical structure of dealer bank accounts and relationships adds complexity to financial operations,” says Andy Rankin. “Most retail auto businesses have a minimum of two accounts — operating and payroll — for each location, not including accounts at the management company level for commercial real estate holding companies.” USING PAYMENTS TO GIVE CUSTOMERS WHAT THEY WANT Payments are integral to creating the optimal customer experience. Research by Cox Automotive shows that 89% of customers intend to complete some part of the automobile buying process online,2 and more than 60% are comfortable completing the entire purchase digitally.3 “Dealerships have a vital interest in enhancing the customer buying experience,” says Chris Ward. “As more elements become digital, the focus shifts to maximizing transaction speed and reducing friction. It’s about balancing efficiency and cost while delivering an exceptional customer experience.” That kind of experience, Ward explains, hinges on simple, speedy and safe payments. “Dealers are focusing first on simplicity for an intuitive buying process that customers can understand and execute with ease. Speed matters — no customer wants to spend all day in the dealership once they’ve decided to buy. Customers demand safety supported by proper controls throughout the entire payments process.” Safeguarding payments is essential to maintaining the trust that dealers work hard to build. “Whether it’s making a service repair payment or accepting a down payment, everyone wants a safe, sound and secure process — free of surprises,” Ward says. “When you think about payments, don’t forget service,” Smith adds. “There are far more transactions in the back end of the dealership than the front. Every customer wants the service process to be quick and painless.” “One way to improve the service experience is to have mobile payment devices that allow customers to pay by phone when picking up their vehicle — rather than walking to a cashier’s desk,” Smith suggests. GETTING THE MOST FROM DIGITAL PAYMENTS “While the case for digital payments is strong, you’ve got to take a strategic mindset toward payment advancement,” says Lyubena Smith. “Examine all payment flows — money in, money out — and financial processes. A full analysis allows you to rebuild a more How Payments Are Powering Digital Transformation in Auto Retail By TRUIST DEALER SERVICES 16 Virginia Auto Dealer
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