The car dealership industry has experienced profound change over the past two decades. We’ve seen market growth, plateaus, and declines. In addition, shrinking margins and market disruption as a result of new technologies like Digital Retailing that are changing the car-buying, car-owning, and car-selling process altogether.
The change is ubiquitous. From the largest auto groups in the country, to single-point franchise dealerships, to independent used car businesses, the auto retail industry is rapidly evolving to harness the power of these new technologies and the operational philosophies they present. So, regardless of your dealership’s size or goals, now is the time to update your business strategies and get out in front of the changes in our market. Here are five suggestions on how to begin:
1. Work deals, not leads.
Our consumers are changing. Many in-market shoppers prefer to shop in the shadows, doing their research and then showing up in the dealership on their own terms, thus replacing the traditional lead form submission.
Encourage these shoppers to come out of the shadows by offering them convenient solutions and in-store process changes that will save them time and elevate the car-buying experience.
2. Move past “Desking” to meeting guests where they are in the buying process.
Try this exercise. Sit in your showroom and watch what happens when your sales consultants leave their guests to go to ‘the desk.’ Watch. See your guests take out their phones? They’re going back into the research phase to try and answer whether this is the right car, deal, or dealership to buy from. Watch them text a friend or relative who “knows a guy” in car sales to check the info that you gave them.
Leaving and going to the desk erodes trust, and from an operational efficiency standpoint, you’re most likely not getting enough value to balance out that risk.
A connected showroom experience, on the other hand, allows your guests to self-pencil and make their own car-buying decision, bringing together lenders, electronic menus, and even electronic contracting.
3. Seamlessly introduce shoppers to protection products.
As we make car buying convenient and even fun, we’re not going to do that at the expense of the profit margins that fuel our business, pay our team members, and fund investment in facilities and marketing.
Successful retailers that use Digital Retailing see an average increase in F&I profitability by allowing buyers to explore products and then serve additional information to them in a helpful, non-intimidating, and speedy way. By design, this contrasts the traditional F&I grind that featured hours of waiting in the dealership that only puts buyers on edge.
A preview of protection products online followed by electronic surveys and informational videos allow you to capture what’s important to buyers, and enables you to have invaluable micro conversations, rather than an hour-long slog over topics that don’t match your buyers’ wants or needs.
4. Create an efficient operation.
As the car-buying market continues to level off, which, as mentioned above, hurts margins, Digital Retailing will free up your human capital to focus on what matters most: cultivating relationships and selling cars, versus consuming large amounts of time desking and financing deals.
Your F&I Manager isn’t driving up PNVR when they are manually typing in credit apps. Your desk manager isn’t maximizing his or her impact on sales and gross when making simple calculations. Your sales consultants aren’t getting to the root of customers’ wants and needs when they’re making your guests wait.
To have an efficient operation means to focus the majority of your team’s efforts on the parts of their jobs that have the largest contribution to sales and profitability.
5. Make your dealership a more fun place to work.
If you survey your team and your buyers about the most stressful parts of car buying, you’re likely to find consistent results. But car buying and selling can be such an emotionally positive experience: hearing customers’ personal stories, cultivating new relationships, test drives, showing guests how that one particular color looks in-person, seeing their response, and witnessing them decide to say yes. It’s compelling stuff!
As Digital Retailing can have a positive impact on your business, it can also help your team feel empowered, while knowing that they have helped car buyers transact with more convenience than ever. And empowered team members that experience an enriching and fun work environment are team members that’ll stick around.
Automotive retail will always remain an evolving industry. But with technologies like Digital Retailing available, you can give your business the tools necessary not only to survive in the current car-selling landscape but to thrive as auto retail accelerates into the future.