by Adam Rapp
As unemployment numbers cross the grim forty million claim milestone, you’re likely questioning when the economy will bounce back and what that will look like. With experts split down the middle on whether the economy will recover quickly (v-shape) or more slowly (u-shape), planning ahead will be a strong mixture science and art.
During a recent Dealer News Today Podcast, hosts Dave Cantin and Andy Cherkasky discussed their respective views of the economic recovery. Cantin remains very optimistic and sees a US economy that will quickly recover within the next six to twelve months. He went on to say to talk about an emerging “new norm” which he sees prevailing as one of the strongest economies the country has ever witnessed. Cherkasky is much more hesitant and sees a more difficult path ahead. He sees a complete reconstruction of the economy that also fundamentally changes how individuals make purchases. To get some further insight into how the recovery process will impact the auto industry, Dave and Andy brought in a seasoned expert to discuss his thoughts on where this economy is headed.
As a former Vice President of General Motors and Volkswagen, as well as COO of Bentley Motors, Mark Barnes is something of an industry legend, and well-versed in all aspects of the auto industry. “Car dealers are the best at adapting,” Barnes said. “They are the last great entrepreneurs in the United States, in my humble opinion”. Barnes went on to say that those who learn how to effectively lead and communicate in the new normal, regardless of the economy’s direction, will be the most resilient and prepared to adapt in the future. As we discussed in a recent Dealer News Today article (“How Not to Succeed”), dealers around the country implementing new features into their business practices designed to accommodate evolving consumer needs within the “new norm”. While making your online presence known and delivering an easy place for potential customers to navigate remains critical, it is also important to invest in features that are fresh and exciting to the automotive industry.
This is where virtual reality comes into play. In a recent article by Vox Images, virtual reality car shopping is described as the way of the future. With virtual reality headsets readily available, relatively inexpensive, and compatible with almost all smartphones, this immersive technology is now more usable than ever before. With virtual reality, potential customers have the ability to immerse themselves in the car buying experience right from their own home. While “sitting in” the vehicle, they can peruse a large catalog of cars, selecting different colors, seat textures and models in real time. This also gives individuals more time to explore vehicles they are interested in, without feeling themselves rushed through a dealership experience.
Another advantage of virtual reality is that it reduces inventory overhead and transportation costs. As the pandemic persists, auto manufacturing plants have had to abruptly close to avoid the spread. As these plants continue to close down for unknown amounts of time, inventory has already been profoundly affected, and will likely take a good deal of time to catch up. However, if potential customers truly have access to a meaningful buying experience from home, it could impact the amount of inventory dealers truly need to keep on the lot. It is only when the customer has decided to purchase a vehicle that it would need to be delivered to the lot for pickup. Virtual reality can also be utilized as a tool to expand your dealership’s presence beyond your local area. With shutdowns varying from state to state, many dealerships have been left with limited ability to conduct business as usual. Virtual reality would empower these dealers to present a larger and more diverse fleet of vehicles to potential customers who live outside the immediate area. For dealerships struggling to sell vehicles locally due to new restrictions, this also creates an opportunity to widen their geographical reach and deliver a unique experience to a larger area. Looking ahead, as Andy pointed out in the podcast, the brick and mortar experience of purchasing vehicles might look completely different due to the virus. With more focus on virtual reality, dealerships could find themselves able to scale back on the square footage of their physical location and direct their budget savings toward emerging sales methods like virtual reality.
While the trajectory of the economy’s recovery is still largely unknown, it is still important to prepare each dealership for changes in foot traffic, marketing plans, sales methods, and the physical environment. As Barnes said “tough times bring out tough people”, and those who learn how to effectively adapt powerful and ingenious business practices into their existing operations, are the ones who will come out of the pandemic stronger, without worries about the shape it comes wrapped in.