Accenture Recommends that OEMS Lead the Fix for the Dealership Sales Model

Low profit margins, high turnover and fewer visitors are some of the hallmarks of running a dealership today. Buyers, who have become accustomed to transparent buying processes online, are expecting to do more of their researching, shopping, financing and paperwork online, and younger customers are increasingly happy to complete the entire process through a Web-based store. In fact, research by eBay Advertising found that 63 percent of vehicle shoppers are thinking about shopping online. Does this mean dealerships are doomed?

No, according to Axel Schmidt, Global Head of Accenture’s Automotive practice, writing for Automotive World, but it does mean that dealerships need to evolve to match the way consumers want to shop for vehicles today. Schmidt also notes that it’s the OEMs who should be leading the process organically, and not just partnering with existing online sales companies.

“Almost every automaker should start by fixing the dealership experience first, and then create a new car-buying experience that fits consumer needs,” wrote Schmidt. “A comprehensive, well-thought out retail strategy that has ‘new’ dealerships at its core will take any OEM a very long way – and will be more effective and less risky than most e-commerce or vertical integration plays.”

The place to start, according to Schmidt, is to understand where customers want to do the process online and where they’re still seeking an in-person experience in the car shopping process. After all, even younger, tech-savvy buyers still want to touch, sit in and drive a car before they make a final decision.

“Buyers still seek ‘offline’ experiences in a dealership,” he wrote. “They are keen to shop online, configure cars on the web, and some return to an OEM’s web site to order and pay once they have made a final decision. But in between these steps, car buyers like to find a showroom, speak to an expert, and ‘get the feel’ of a car before they take it for a test drive.”

So what’s the biggest broken part of the current dealership business model? Customers say that it’s the inability to communicate with sellers in a “channel agnostic” way. In other words, if they reach out via email and then in person, they need to start the process all over again, and maybe even get different answers or sales approaches. OEMs and dealerships need to be in synch in the buying process, and all customer touch-points need to be properly integrated so shoppers can experience a well-integrated, multichannel process that provides whatever they seek, whenever they seek it, at whichever touchpoint they are.