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What Franchise Dealers Can Learn from Carvana


It is safe to say that automotive has been thrown into some interesting changes since March of 2020. With so many unexpected situations and the roadblocks with selling the cars in the manner we were used to, the industry has been forced to evaluate not only the way it currently functioned, but also the way in which it will move forward with success.

One thing that became blatantly obvious is that selling cars, either partially or completely, online is no longer something that may or may not happen. It is here. And the dealerships who have adapted and adopted those methods are the ones who are in a stronger position for today, but also for 2021.

Carvana has generally been a litmus for online transactions. And while many thought this was not the way the general population wanted to purchase a vehicle, the numbers are telling a different story. According to an article published in Automotive News, their stocks rocked 30% in late September, and while they dipped slightly since then, they are outpacing some powerhouses in the industry such as GM. 

It is time to look at what the franchise dealership can do to not only compete with, but perfect the process that a portion of the American population is truly looking for: a more digital, online purchasing platform.

What the Data Shows


51% of June transactions attributed at least a portion of the sale to an online platform. 

11% were completely digital.

This is not new to many dealerships. Online selling and digital retailing have been a discussion point for many years now, but 2020 has made it apparent that to stay relevant with buyers, we need to adopt these new methods. 

When talking with dealers around the country, there are some who have championed this process and understand the importance of offering these options to interested buyers. In fact, ⅔ of Franchise Dealers state that they will continue to use and expand these digital options in future.

But there are some who still are on the fence. Some of the arguments against online options and digital retailing are as follows:

  • If the customer uses an online tool to figure out payments, they will talk themselves out of a vehicle I could have gotten them into
  • It causes friction when the customer does come on-lot
  • It takes away the control we have when the customer comes into the dealership

How many of these have you stated when reviewing some of the online options offered to your dealership?

What Digital Retailing and Online Options Provide 

The above school of thought is dangerous, mainly because it is not true. Customers are looking for more ways to complete either a portion or all of the transactions online. The Amazon culture has become the norm, to the point that Amazon now lists vehicles on their platform. It is time to evaluate why you do what you do and how you provide what the consumer wants.

That does not mean that dealerships will become irrelevant. 

The majority of customers still want to complete the process at your store. They want to have the salesperson show them the options and technology. But for the many who want online options, it is time to offer them, perfect them, and market them.

What Will Your Dealership Need?

With the increase in online traffic and transactions, you will need online processes in place to accommodate the consumer who is either still reluctant to come on-lot for extended periods of time, or the consumers who just want the ease of completing portions of the shopping process from their couch. Here are some elements that will get you on the right track.

Digital Retailing Tool

The majority of stores I work with have already adopted these tools, as they realize that if you don’t have them on your VDP, the customer who wants this option will go where they can find it. Whether that is another dealership or a third party site, they will find a site that allows them to put in their down payment, adjust the term, and review payments. You spend a lot of time and money on your website and on driving traffic there, so why would you want customers to leave your site? 

There are many tools in the market that provide what the customers want, and that will live directly on your site. If you do not have one, this would be the first thing to adopt.

Video Capabilities

The industry has been preaching the value of video for years, yet it is still something that has had a slower adoption than expected. Especially in times of social distancing, video can bridge the gap and help develop relationships between the customer and the dealership. And one thing that has not changed--people buy from people they have built a relationship with. 

Video can take many forms, but at its most basic, it is a communication tool. If a customer sends in a lead on a vehicle, are you texting or emailing a video to them introducing yourself and including a walkaround of the vehicle? Are your service technicians and advisors sending update videos and highlighting issues to address in the future as well as what needs to be done immediately? 

This relational communication is one step that you can take to help digitize your dealership and help you win over customers who are looking at multiple dealerships online.

Quick, Consistent, and Reliable Communication

With the increase in online traffic and leads and decrease in walk-up traffic, this needs to be mastered. Since March, there has been a marked increase in website traffic and lead submission, and a decrease in traffic on-lot. There has also been a decrease in staff at the dealership, which makes it difficult to address every lead that comes in--especially if you have online tools that encourage lead submission. 

If you are not up to full capacity with your staff, you need to find a partner who will respond to each and every lead quickly, with valuable information for the customer. Auto-responders will not suffice, which has been proven over and over again. There is a 15 minute window in which you can win or lose a customer, and with today’s expectations of fast communication, you want to make sure that you are not trailing behind your competition.

If your BDC/ Internet Team is full staffed, they need to focus on emails, calls, texts, and video now more than ever. If they are not fully staffed, we are here to help. Our Virtual BDC is one of the best for a reason--our live, US based agents are automotive specific and know the business. And they also get to know your dealership and culture as well so that they can reflect that to your customers.

Carvana has been in business for years, and many thought the model would not last. 

But it did and it has. 

What can we learn from it and what elements can we adopt to not only stay relevant, but to win over the competition?


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