Lessons that dealerships must learn from the Pandemic
The unprecedented global COVID-19 Pandemic has undoubtedly impacted the ways consumers purchase and sell their vehicles. With an evident shift to online internet-based platforms, consumers are searching for buying processes that boost efficiency and a stress-free experience from start to finish while offering the flexibility to do it from the comfort of their homes. To
The unprecedented global COVID-19 Pandemic has undoubtedly impacted the ways consumers purchase and sell their vehicles. With an evident shift to online internet-based platforms, consumers are searching for buying processes that boost efficiency and a stress-free experience from start to finish while offering the flexibility to do it from the comfort of their homes.
To meet these demands, many retailers worldwide shifted their selling process to e-commerce. On the other hand, these trends have evidently served as a warning sign to car dealerships as the need for enhanced collaborative efforts and improved experiences for customers become the center of attention. With that said, these seemingly straightforward demands are easier said than done. So, how do dealerships meet the needs of consumers moving forward? What lessons can these businesses learn as a result of the Pandemic?
Lessons that Dealerships must learn from the Pandemic
The global COVID-19 Pandemic has left many industries with more questions than answers, including the automotive sector. Here is a closer look at what the Automotive Industry is facing.
What was the impact of the Pandemic on the car industry?
From assembly-line closures and manufacturing backlog to disruptions along global supply chains and slowed production, there is no denying that the Pandemic single-handedly flipped the Automotive Industry on its head. In-person car sales declined significantly due to lockdowns. And although profit margins have changed minimally since the Pandemic began as people are still purchasing new vehicles, the impact truly lies in whether consumers view in-person vehicle buying and selling processes as necessary. As a result, this new realization is not a cause for concern for dealerships as they remain relatively empty.
The fact of the matter is that many consumers do not want to come into dealerships and spend their time looking at vehicles, feel pressured by salespeople, or delve into lengthy paperwork after everything is said and done. Instead, many prefer to conduct their search online and narrow down their choices with guidance along the way as they need, which is why online sales have and will continue to increase on an online landscape.
How can showrooms and dealers get back on their feet?
As the economy begins to reopen to its fullest potential, it’s imperative that showrooms and dealerships plan strategically moving forward in order to get back on their feet and remain a competitive/valuable resource for consumers who are looking to purchase a new vehicle. While the future may be ambiguous, the possibilities for automotive businesses to utilize digitization and technology to their advantage are fruitful. Here are some ways showrooms and dealers can work to get back on their feet:
1. Revamp your communication styles
Consumers buy products from retailers they relate to and trust. As a result, dealerships should consider fostering a transparent brand identity through marketing efforts that are relatable to modern consumers to keep their ROI as high as possible. Therefore, allocating funding to your marketing initiatives, maintaining a social media presence, and creating a brand voice that speaks true to your company is critical.
2. Adapt to virtual selling experiences
Consumer trends tell us that many people would rather purchase online than in person. Therefore, dealerships will need to strategize methods to make the online process of buying a new car with them as seamless as possible while putting the same efforts and attention into virtual sales as they would with in-person ones by implementing new sales tactics that appeal to new consumer behaviors.
3. Omni-channel approach
Consumers want choices – so why not offer them the option of an online and in-person showroom? Consider providing real-time inventory, an extensive selection of vehicles, numerous financing options, and delivery services that are Canada-wide. All in all, consumers should have the ability to complete specific tasks in their purchasing journey online and in-person as they please.
For example, a consumer may begin looking at a vehicle on your website and see that you have it in stock at your showroom. Therefore, they should be provided the option to speak with someone online and make an appointment to come view the vehicle in person while being able to talk with the same person as before to make the experience more personal. In addition, it removes the need to provide the same information to another salesperson again.
Innovative software solutions, such as the taq one Platform, offer True Digital Retailing technology that improves consumer buying experiences by empowering them to organize their payment options, book appointments and delivery options through your dealership or showroom website, and complete their credit application online as well.
4. Increase your productivity
Furthermore, dealerships should seek to increase their overall productivity by adapting to new software solutions that streamline their daily business operations. Innovative software solutions like the taq one Platform allows dealerships to track leads, work credit decisions, manage consumer life cycles in their portfolio, from a single platform rather than multiple ones to boost productivity and remain organized with ease.
Using a combination of these recommendations listed above, dealerships can strategically position themselves in a manner that not only allows them to get back on their feet but also begins to prepare them for their role in the car buying process in the future.
What is the effect of the global chip shortage on the Automotive Industry?
Chips, also known as semiconductors, are heavily relied upon in the Automotive Industry. From radio touchscreens to air conditioning systems, vehicle safety elements, including seatbelts, airbags, stabilization systems, and more, these tiny technological chips conduct electricity throughout vehicles and are an imperative component in all cars.
As a result of the Pandemic, a shortage of chips began in early 2020 and has since not recovered, causing delays and disruptions along global supply chains. According to the World Semiconductor Trade Statistics nonprofit, the global market for chips will increase slightly in 2023 but may not fully recover until 2024.
So, what does this mean for the Automotive Industry? While automotive sales dropped during the lockdowns, the number of consumers seeking to purchase vehicles is beginning to increase again. However, with car companies being unable to keep up with demand issues, consumers may be waiting several months after ordering the vehicle before they are able to hit the road with it.
Therefore, to adequately respond to chip shortages, car dealerships must forecast their inventory short and long-term while increasing internal communications amongst salespeople, suppliers, and of course, consumers. In addition, companies may also need to re-examine their business plan as global supply chain disruptions are here to stay for the foreseeable future.
Did people, after the Pandemic, focus on shopping for their cars online?
Yes, the COVID-19 Pandemic has accelerated the number of consumers willing and ready to purchase their vehicles online as opposed to traditional channels. While businesses such as Tesla and Carvana have been conducting online car sales for years, consumer behavior changes fueled by the Pandemic have ultimately led to a shift in the way people worldwide will purchase a vehicle moving forward.
However, this doesn’t mean that dealerships will be eliminated from the purchase process entirely. Instead, consumers who begin their car shopping online will most likely want to test drive a car in person. The only difference is that by the time they reach out to contact the dealership for an appointment to test drive, they will have already narrowed down which car it is they want to purchase.
Because of this, it’s vital that dealerships adapt their business operations by allowing potential car buyers the option of viewing, building, and comparing the vehicles you offer on your lot online as well. That way, when consumers are ready to contact you directly, your employees are prepared and waiting to provide them with test driving options that meet their demands. Thus, the purchasing process remains efficient from start to finish.
Should showrooms and dealers focus on selling electric cars?
Electric vehicles are evidently the way of the future as sales continue to surge across the globe. With governments making efforts to seamlessly remove emission-producing vehicles in the years to come, dealerships will need to focus on selling electric cars, and the demand for these vehicles is projected to continue growing rapidly.
With that said, dealerships are sadly unprepared for what is to come, and it is up to owners and management to begin implementing changes in their business model to meet this growing number of consumers who want to purchase electric vehicles. This means that on the front end, salespeople will need to be trained in all aspects of electric vehicles, including battery range, vehicle performance comparisons, expectations for car services, and what daily maintenance of their new vehicle will look like.
On the other hand, dealerships should consider adding elements such as at-home charging stations to increase in-person sales and other interactive aspects that show what consumers can expect from their electric vehicles.
Furthermore, on the backend of the dealership business, technicians will need to be retrained in electrical components and software in order to be able to safely manage high-voltage systems and technological feature updates. In addition, dealerships may need to redesign the partnerships they hold by offering sales of different used electric vehicles on their lot to expand their traffic and increase revenue.
The implementation of digitization and electric vehicle-focused revenue is upon us and will continue to expand whether traditional automotive dealerships like it or not. This is precisely why it is crucial that businesses begin remodeling their business plans strategically to meet consumer demands and remain an essential component in the buyer process.
To ensure your dealership is prepared for the future, taq Automotive Intelligence can provide you with innovative software solutions that meet your business needs and boost internal productivity.
For more information on how taq Automotive Intelligence can help you prepare for the future, visit our website.