The Wrong Side of 50 Percent

by Adam Rapp

It’s that time of the year again. The trees are in full bloom, the sun is shining and the temperatures are rising. Pandemic or not, it’s clear that we have officially entered into car selling season. Under normal circumstances, warm weather drives consumers out of their homes and into to the dealership. However, as the shutdown persists in several states, this leaves many individuals with limited ability to purchase a new vehicle. Sure – these individuals can make an appointment with the dealer, although this can generate time sensitivity issues for some consumers. While several dealerships have successfully adapted to digital sales and service in the midst of crisis, whether or not they can sustain and grow these efforts remains an open question. A recent study shows that fifty percent of dealers plan to ultimately return to their original marketing strategies. Unfortunately, these dealerships may not realize how damaging such a move can be for their business. Regardless of state restrictions, consumers still want and need to purchase new vehicles, and a nervous market makes it increasingly important for your dealership to fully embrace a permanent online presence.

During a recent Dealer News Today Podcast, Dave and Andy spoke with two software executives from Cox Automotive, Wayne Pastore and Tracy Fred. Cox continues to draw a lot of attention and accolades within the automotive industry for promoting philosophies that help dealers adapt to the new normal. “Let’s return and reimagine auto retail, but let’s not regress”, provide the basis for their developing strategies to address the changing market. While this statement can be open to many interpretations, Pastore and Fred say that Cox’s main point is that dealerships must acclimate their operations to the digital world. According to Fred, many are already doing a fantastic job implementing new tools – gearing themselves towards a strong online presence. “We’ve seen that dealers were actually able to sustain their businesses by adapting quickly to the use of digital tools that were available to them”, says Fred. Interestingly enough, dealers have been looking to expand their web presence for quite some time now. However, according to Fred, it is the consumers who are initially hesitant to purchase a sight unseen vehicle. To help car buyers overcome their skepticism, Pastore has some very valuable insight.

“As a result (of the pandemic), the digital retailing side of the house has gone from simply a tool set to a change in process”, according to Pastore. While the current circumstances are forcing dealerships to adapt more quickly, Pastore cautions that implementing is just one piece of the puzzle. “Connect your experiences and processes with your digital marketing strategy”. Consider the current consumer’s position. As many are left with the inability to see a vehicle in person, this inevitably changes their thought process when purchasing a vehicle. As a dealer you must recognize that your consumers will be expecting the same (or better) service online than received inside the showroom. On the surface, this means providing more attractive buying incentives and more functional reviews of vehicles. Diving deeper into the inner workings, your dealership must provide a website that not only advertises for the showroom, but generates a cohesive message surrounding all aspects of the dealership. Proactivity and transparency remain critical in your approach customers. Most importantly, your website must be easy to navigate and present equal enthusiasm to the brick and mortar experience.

In order to successfully adapt to the new normal, Fred believes that dealers must reach out. “In order to boost consumer confidence, it’s kind of about meeting consumers where they are”, says Fred. As many consumers are still trying to maintain social distance, dealerships can go the extra mile to ensure that their customer’s safety. This involves everything from online transactions to pickup and delivery for both purchases and service. This tactic not only applies to consumers but also other facets of the industry. Maintaining a strong line of communication with your OEMs (Original Equipment Manufacturer) is very important. By discussing new leads and sales with them, OEMs can begin to determine how soon they can help plan for a return to normalized demand. OEMs can also keep your dealership informed regarding the future of any potential plant shutdowns. This is the kind of information that will help you craft a plan for periods of potential low inventory.

For those reluctant to stick with new normal (the fifty percent), Pastore and Fred believe these dealers are making a terrible mistake. According to Fred, it was in the midst of the economic downturn when dealers slowly began utilizing the web and market-based pricing. “Those dealers who really embraced the opportunity in front of them not only survived the economic downturn but thrived as a result”, says Fred. These are the dealers who realized early that their entire business is based on data and consumer preferences, and it is presumed that dealers who learn more quickly to embrace this mindset maintain far better chances for success. As for the other fifty percent, they will struggle deeply and ultimately come around if they want to survive, according to Pastore.