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What Exactly Is “Digital Retailing” and What Should Dealers Consider When Engaging Vendors?



E-commerce has been the norm for many years with auto dealers moving towards full digital retailing. While adoption speed has varied from dealer to dealer, one thing is certain: implementation has increased exponentially due to the coronavirus pandemic. Since COVID-19 emerged, more than 22 states have imposed some form of restriction on in-person sales, 16 states allow online sales only, and six states allow showrooms to remain open by appointment only; while hundreds of additional local restrictions are impacting dealers’ ability to provide personal transportation to its customers.

As part of NADA’s Dealership Lifeline Webinar Series, NADA Senior Counsel of Digital Affairs Brad Miller and DealerTech Nerd Founder Stefan Drechsel provided an overview of online sales and the types of technical assistance dealers will likely need to implement or enhance a customer-focused online sales experience.

Their webinar, What Exactly Is “Digital Retailing” and What Should Dealers Consider When Engaging Vendors?, underscored the various digital retailing levels: ranging from level one, a paperless retail in-store experience; to level three, a hybrid digital online and in-store experience; to level five, a completely end-to-end online experience with physical contact only at vehicle delivery.

“This is an area of grays,” Miller said. “There are various levels of digital retailing and the goal is to have a framework to determine what a dealership needs to facilitate an online sales experience.”

Additionally, Miller and Drechsel provided vendor guidance to complement each phase of the digital dealership experience while ensuring compliant sales. Online trade evaluation, for example, can be difficult to determine in the current environment, and will involve important and difficult business decisions. The webinar also outlined that technology vendors may be able to ease the lift by gathering relevant photos, videos and data from the trade-in vehicle and integrate the information with used vehicle valuation software to provide a concrete trade value.

Miller also highlighted a variety of compliance-related issues that dealers must address when choosing the right technology vendor.

A recording of the webinar is now available to NADA members here.

Note: NADA’s webinar is offered to assist its dealer members in the operation of their dealerships and for general informational purposes only. Each dealer must seek their own legal counsel and make their own independent business decisions and work with their attorneys to ensure social media posts and advertising comply with state and federal consumer protection laws. Before attempting to sell vehicles online, dealers must consult with their attorney or state/metro dealer association or licensing authority to better understand the requirement in their state. The presentation of this information is not intended to constitute legal advice nor 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.

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