In 2016, technology brought significant change to the automotive retail industry. Gone are the days when car buyers needed to spend hours upon hours walking dealer lots. Instead, the majority of the process takes place online. Technology has disrupted our industry, forcing you to adjust the way you run your dealership in order to better cater to the desires of your customers.
As for the second half of 2017 and beyond, I predict it will be unpredictable. But I do foresee dealers focusing their collective efforts on new ways profit can be made. What dealers won’t make on volume or new-car margin could be made up for with faster turn rate, more efficient operations, and a greater emphasis on customer satisfaction, F&I and service.
With that in mind, here are three prognostications to help you fortify your bottom line no matter what the future holds.
1. Flexible Payment and Financing Options
Affordability is going to be a huge factor in shopping trends. Many of the purchase decisions made by car buyers are driven by their monthly budget or access to financing. Building confidence and transparency into the shopping and dealmaking portions of the process is easier if you embrace digital retailing tools.
If 2016 was the introductory year to digital retailing in the automotive industry, then 2017 will be the year digital retailing takes root. This is the year our industry truly masters how to sell a new vehicle online while simultaneously preserving the consumer-dealership relationship.
2. Multichannel Advertising
Car buyers are no longer limiting themselves to one device or one source of information. You must be able to track, learn preferences, and target shoppers who have demonstrated a readiness or likeliness to purchase across multiple devices and sites. Those tools will allow you to focus your advertising efforts and place offers and incentives on vehicles where they will count most.
This year, digital marketers will figure out how to personalize advertising to what a shopper is looking for — and they will deliver their content in a way that is neither too forward nor intrusive.
You need to know what marketing investments work, period. Vendors and publishers will need to emphasize quality and value, not just post quantitative numbers. Transparency in terms of performance and actual ROI will stop being elusive and become the ante into the game. Ultimately, this shift will result in the intelligent use of existing audiences to drive more relevant traffic and capitalize on specific shopper intent.
Put simply, the technological disruption that occurred in 2016 took the automotive industry by storm. It changed the entire car-buying process. It forced dealers to adjust — again. As the industry continues to make sense of this ever-changing digital shift, your goal should be to master and own this new sales process. You can start with advertising that cultivates the types of customer relationships that will thrive in the digital retailing era.
Andy MacLeay is director of digital marketing for Dealer.com. Contact him at [email protected].