Here is a fact: things have dramatically changed this past year. There is no arguing that. There is, however, a discussion to be had about which direction to take from here. You see, 2020 was an unexpected 12 months. Things didn’t go as planned. As a result, automotive retail had to pivot in new directions in order to meet customer expectations and safety needs. Traditional retail already had a number of successful outlets for managing these shifts. On the other hand, dealerships found themselves in the lurch. For an industry that is over 120 years old, change doesn’t come easy. Many are entrenched in their ways. Salespeople battle stereotypes and the traditional dealer is still viewed in an unsavory light. So where do we go from here? It’s time to reinvigorate automotive retail with these five tips.
5. Examine your online reach
Start by asking yourself, “Are consumers purchasing cars online?” The answer might shock you. It is correct to assert that customers are in fact shopping online. But the path to purchase is a lot less traveled than expected. Your online presence needs to be a powerful agitator to drive overall sales. The truth is that people are accustomed to shopping retailers from their couch, but purchasing a car is a different beast. As it stands, car buying is one of the most time consuming and expensive endeavors that a consumer will engage with. Because of that, your online presence needs to augment your traditional approach. Examine what you are doing and create a strategy to better engage with your customers where they are. Supply them with options to intermesh with your brand. Every touchpoint needs to be elevated and the process of moving from research to trade-in/appraisal to haggling to F&I to finally driving off with a new vehicle needs to be simple. Online sales and shopping will continue to grow. We can only guess as to where the needle will stop, but current trends suggest that you need to focus on merchandising your inventory for a digital audience.
4. Offer a frictionless experience
Because fostering a digital audience should be your focus in the new year, you need to consider how you will bridge the gap between online and offline sales. Currently, there is a digital divide between how cars are sold today, and how they will be sold in the future. The upcoming year is critical in bridging this divide and your store NEEDS to offer a frictionless experience for your customers. Every touchpoint should be fleshed out. You need a strategy that can change gears at a moment’s notice. Because consumers are now researching, shopping, and purchasing in new ways, you have to be flexible. In order to accomplish that, scalable solutions are required. The tools you deploy for inventory management and sales enablement can no longer be siloed. Capture every ounce of data you can and put it to use to create a frictionless customer experience. They will thank you for this.
3. Transition from the old way to the new way
The winds of change are sweeping through the automotive retail industry. Things will never be the same again. The transition had been pushed into motion long before 2020, but this past year was a catalyst that accelerated this change. Unfortunately, a lot of dealerships are going to find themselves falling behind as they will struggle to transition from the old way to the new way. The simplest way to accomplish this is to strike a balance between the two mindsets. Not every consumer is going to step away from the traditional buying journey. It is very much ingrained in the minds of car shoppers young and old. Because of this, not only do you need to create that frictionless experience, but you need to invest in advanced tools for automotive and digital retailing. Consider deploying a digital showroom for your customers to shop from anywhere they want. Couple this with a fresh approach to merchandising and you have a solution to transition from the old way to the new way.
2. Follow the path of digital disruptors
The automotive retail industry is much like all the other retail industries. It survives on a series of digital disruptors that change the pace and redefine normal. What is comfortable one day cannot last forever. It is important that you recognize this and be agile in adapting to trends and customer demands. Digital disruptors like Tesla, Carvana, Vroom, and even Walmart have taken the leap to redefine the industry by addressing the desire for online shopping. While this makes the landscape more competitive, it only opens the door for you to scale operations in such a way that you come out on top. Keep an eye on what is trending and make strategic investments in areas where you can grow to meet the new direction of the automotive industry. Implement fresh strategies for digital disruption and watch as unique avenues for revenue open up. You will hold more gross per transaction and prevent your dealership from racing to the bottom.
1. The stairway to the future
Once you accept that retail is being redefined, you can take the first step on the stairway to the future. But that first step is simply one in a long string of many. The automotive retail industry will continue to grow and evolve. More OEMs will invest in subscription programs. More online-first platforms will emerge. So for you to gain a competitive advantage, you need to think two steps ahead of the game. Once you embrace the future of buying and selling cars, you are on a path toward surpassing trends, matching disruption, and redefining an entire industry. Things won’t be the same in five years. But for you to maintain your place and to gain ground, you need always be evaluating the industry and your competition. Create a strategic plan and roadmap to identify specific goals and areas for growth. Invest in the right solutions and stack them in such a way that they work in unison. Your stairway to the future won’t always be paved in gold. But if you play your cards right, you will end up in the winner’s circle.
Retail is on an evolving road. It is up to you to walk in line with these changes or be left behind. With the new year, now is the time that we as an industry reimagine what retail looks like for buying and selling cars. The old way simply won’t work anymore. There will be more exterior disruptors to your business. Taking a moment to reinvigorate ourselves and automotive retail is the first step to a successful new year. You don’t have to go on this journey alone. MAX Digital is an industry leader with the knowledge and insights capable of elevating the way merchandise your inventory. Walk into the future of retail and sales enablement by scheduling your free demo today.