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Toyota Motor North America is approaching critical mass in dealer adoption of its Toyota SmartPath and Lexus Monogram digital retailing tools, and retailers are starting to see improvements in profits as the tools expand to cover service and finance and insurance functions.
More than 20 percent of Toyota’s and Lexus’ 1,500 U.S. dealers are actively using the in-house designed tools, which the Japanese automaker began to roll out in 2019, about six months before the start of the COVID-19 pandemic. What began with a handful of pilot dealerships has now expanded to hundreds of dealers, “and we’re launching four or five new dealers per week,” said Tim Bliss, general manager for retail transformation at Toyota Motor North America.
Bliss said about 100 dealers are waiting in line to have SmartPath or Monogram installed. Recent metrics may provide a clue as to why dealers have embraced the technology so enthusiastically.
“We’re starting to see, with availability so tight, guests going online to find that one vehicle that they want because of SmartPath’s real-time inventory. It assures the guest that what the dealer is showing online is what they have,” Bliss said, adding that the system also allows dealers to display vehicles that have been allocated but not yet delivered. “The dealers using this are seeing their turn rates improving by about 1.5 percentage points, and that’s pretty good since we’re already at a turn rate of 91 percent across the country right now” because of ongoing inventory shortages.
The digital retailing tools were expanded this year into the service lane at four pilot dealerships, and that effort is already showing an average increase of $160 per repair order.
The service expansion also includes an online scheduling tool for appointments, which is seeing 80 percent utilization — meaning four out of five service customers of those dealerships made their own appointment electronically through SmartPath or Monogram, Bliss said.
“Service is really starting to take off,” he said. The automaker plans to add another handful of service pilot dealerships over the next few months, and it will have about 20 dealership service operations on the system by year end. “The early results have been great and encouraging,” he added.
In their original form, SmartPath and Monogram are sales-oriented software suites that enable dealerships to promote their new-vehicle inventory in real time with accurate dealer-set pricing inclusive of incentives as well as local taxes and fees — across their website as well as inventory on toyota.com and regional shopping portal buyatoyota.com. They also allow customers to get accurate payments and trade-in estimates online, and they deliver all of the work done at home to the dealership, where a salesperson can pull it up by name on a tablet.
Since their rollout three years ago, SmartPath and Monogram have been expanded to include used inventory and fixed operations. Now, Bliss says, San Francisco Toyota is the first of a handful of dealerships to pilot the software suite’s new F&I functionality, which will allow a fully digital transaction.
“We’re starting that in a very small, controlled beta environment, but that’s happening” now, Bliss said.
“We’re going to be expanding that to a couple other stores this fall, and as that continues to ramp up, we’ll be taking that full scale to the market.”