People

Digital Motors wants to be the Shopify of cars

Buying cars online in the U.S. is broken. This startup wants to help dealers fix it.

Digital Motors wants to be the Shopify of cars

You can't tell from looking at it, but this is a Digital Motors experience.

Image: Digital Motors

If you're planning on buying a new car sometime soon, I'd like you to bring a stopwatch with you.

Even if you know exactly what model, packages and color you're after, even if you don't need to take a test-drive, you're likely going to be spending a few hours at the dealership. No one wants to waste time, but especially during a pandemic, standing around with strangers for several hours waiting for paperwork to be filed is something most people would probably like to avoid if possible.

As retail for almost every possible consumer product has moved online, cars have, for the most part, remained parked in the dealership. Consumers are increasingly comfortable with buying products online, and the lockdowns have only accelerated that transition. Small businesses are also turning to ecommerce like never before, and Digital Motors, a startup that launched its first online store at the end of March, wants to help make buying a car online as painless as buying something off Amazon.

The car-buying process has not really changed much in decades, and part of the reason is that, in the U.S. at least, most states have regulations that require cars to be bought through local dealerships. Dealers can operate showrooms for only one brand or automaker, or several, but at the end of the day, they want to get you into one of their cars. For the most part, dealership websites are primarily designed as vehicles (sorry) to get potential customers to come to the dealership, rather than buy a car online, Andy Hinrichs, Digital Motors' founder and CEO told Protocol. "99% of customers dislike it, and the dealers also dislike this process because it's inefficient for them," Hinrichs said.

"Whether you are on a dealer website, a carmaker's website, or anywhere in between, all you can do is look at vehicles, get vague price indications, and submit your name, email and phone," Hinrichs said. "The entire automotive industry is geared around lead capture."

And Hinrichs should know: He spent well over a decade in the financial services wing of Daimler and Mercedes-Benz. He wanted to take away the struggles associated with car buying, while still working within the system, instead of blowing it up like Tesla has (jumping through endless hoops), or working in the used-car market like Carvana.


How a Digital Motors shop looks across devices. Image: Digital Motors

Digital Motors is meant to appear nonexistent, sitting as an invisible layer between the branding of the car company or dealership's website, and the inventory and sales management software it uses. Customers visiting a dealer that uses Digital Motors would be able to see every car the dealer has available, and importantly, all the financing options they'd be eligible to use to buy the car. "For virtually every car buyer, there is no purchase transaction unless there's a leasing and financing commitment attached to it," Hinrichs said.

Beyond the logistical hurdles of linking an inventory management system to a one-size-fits-all ecommerce solution, building in the ability to tap into a network of financiers is something that no dealership or carmaker has really been able to achieve online at mass scale. "We're not just allowing the customer to find the car that they like within the context of the dealer's online store, but we're immediately presenting these vehicles as monthly lease or finance payments so that it becomes a lot more relevant to the car-buying decision," Hinrichs said. "The customer only cares about, 'What is the car of my desire, and does it fit into my monthly budget?'"

Hinrichs said that Digital Motors has reduced a process that can often take around four hours to less than an hour — and hopes to shorten that even further in the future. But the customers see none of this; they just see that the dealer they know from local TV ads and that giant American flag along the highway has finally found a way for them to buy a car from home, where everyone wants (or least has) to be right now. It's not too different a model from how Shopify has moved to dominate much of the small-business ecommerce landscape.

If you've bought something online from a small business in the last few years and the experience was pretty painless, you were probably buying from a site powered by Shopify. Over the last decade, the Canadian company has gone from offering simple websites and payment solutions for businesses to becoming the backbone of commerce for countless small businesses. It generated $1.6 billion in revenue last year, and that's before the pandemic sent everyone home. What Digital Motors brings is deep knowledge in the highly regulated and complex car-buying industry.

Digital Motors sells its services as a monthly fee to dealers, rather than taking some percentage of sales. "Every automaker is clamoring for this type of service," Hinrichs said, adding that the pandemic "exposed the vulnerability of the auto industry across the board by relying 100% on the physical presence." Last month, Jaguar Land Rover announced that it had made Digital Motors a "preferred online sales platform" for its U.S. dealers, and the company works with dealerships from most major automakers, including Honda, Chrysler and Volkswagen.

Longer-term, the goal for Digital Motors is to sell more holistically, whether that's an entire automaker's national inventory, or even as a marketplace for all the cars across all the dealerships it supports. It's a similar strategy Shopify has started to take with its new Shop app, but that took years of building out the company and gaining the trust of local businesses. For Digital Motors, the goal right now is to keep supporting the individual dealerships, because that's how the overwhelming majority of people still buy their new cars, and that's not going to change anytime soon.

"If you look at the U.S. market, it's a strong franchise system well protected by laws and regulations, so the franchise dealer is not going to go away," Hinrichs said. "So the solution is to augment the brick-and-mortar world with a conducive digital storefront that provides a Tesla or Carvana-like experience, but still allows the dealer to control the transaction."

Climate

The minerals we need to save the planet are getting way too expensive

Supply chain problems and rising demand have sent prices spiraling upward for the minerals and metals essential for the clean energy transition.

Critical mineral prices have exploded over the past year.

Photo: Andrey Rudakov/Bloomberg via Getty Images

The newest source of the alarm bells echoing throughout the renewables industry? Spiking critical mineral and metal prices.

According to a new report from the International Energy Agency, a maelstrom of rising demand and tattered supply chains have caused prices for the materials needed for clean energy technologies to soar in the last year. And this increase has only accelerated since 2022 began.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

Sponsored Content

Why the digital transformation of industries is creating a more sustainable future

Qualcomm’s chief sustainability officer Angela Baker on how companies can view going “digital” as a way not only toward growth, as laid out in a recent report, but also toward establishing and meeting environmental, social and governance goals.

Three letters dominate business practice at present: ESG, or environmental, social and governance goals. The number of mentions of the environment in financial earnings has doubled in the last five years, according to GlobalData: 600,000 companies mentioned the term in their annual or quarterly results last year.

But meeting those ESG goals can be a challenge — one that businesses can’t and shouldn’t take lightly. Ahead of an exclusive fireside chat at Davos, Angela Baker, chief sustainability officer at Qualcomm, sat down with Protocol to speak about how best to achieve those targets and how Qualcomm thinks about its own sustainability strategy, net zero commitment, other ESG targets and more.

Keep Reading Show less
Chris Stokel-Walker

Chris Stokel-Walker is a freelance technology and culture journalist and author of "YouTubers: How YouTube Shook Up TV and Created a New Generation of Stars." His work has been published in The New York Times, The Guardian and Wired.

Enterprise

The 911 system is outdated. Updating it to the cloud is risky.

Unlike tech companies, emergency services departments can’t afford to make mistakes when migrating to the cloud. Integrating new software in an industry where there’s no margin for error is risky, and sometimes deadly.

In an industry where seconds can mean the difference between life and death, many public safety departments are hesitant to take risks on new cloud-based technologies.

Illustration: Christopher T. Fong/Protocol

Dialing 911 could be the most important phone call you will ever make. But what happens when the software that’s supposed to deliver that call fails you? It may seem simple, but the technology behind a call for help is complicated, and when it fails, deadly.

The infrastructure supporting emergency contact centers is one of the most critical assets for any city, town or local government. But just as the pandemic exposed the creaky tech infrastructure that runs local governments, in many cases the technology in those call centers is outdated and hasn’t been touched for decades.

Keep Reading Show less
Aisha Counts

Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She's based in Los Angeles and can be reached at acounts@protocol.com.

Entertainment

'The Wilds' is a must-watch guilty pleasure and more weekend recs

Don’t know what to do this weekend? We’ve got you covered.

Our favorite things this week.

Illustration: Protocol

The East Coast is getting a little preview of summer this weekend. If you want to stay indoors and beat the heat, we have a few suggestions this week to keep you entertained, like a new season of Amazon Prime’s guilty-pleasure show, “The Wilds,” a new game from Horizon Worlds that’s fun for everyone and a sneak peek from Adam Mosseri into what Instagram is thinking about Web3.

Keep Reading Show less
Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

Workplace

Work expands to fill the time – but only if you let it

The former Todoist productivity expert drops time-blocking tips, lofi beats playlists for concentrating and other knowledge bombs.

“I do hope the productivity space as a whole is more intentional about pushing narratives that are about life versus just work.”

Photo: Courtesy of Fadeke Adegbuyi

Fadeke Adegbuyi knows how to dole out productivity advice. When she was a marketing manager at Doist, she taught users via blogs and newsletters about how to better organize their lives. Doist, the company behind to-do-list app Todoist and messaging app Twist, has pushed remote and asynchronous work for years. Adegbuyi’s job was to translate these ideas to the masses.

“We were thinking about asynchronous communication from a work point of view, of like: What is most effective for doing ambitious and awesome work, and also, what is most advantageous for living a life that feels balanced?” Adegbuyi said.

Keep Reading Show less
Lizzy Lawrence

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at llawrence@protocol.com.

Latest Stories
Bulletins