Even before the pandemic, our industry needed a reality check – particularly around providing a customer-centric experience. Today's consumers can purchase just about anything online. They can check reviews, shop prices, and have everything conveniently delivered to their door.
Our industry, on the other hand, has a lot of catching up to do. Many have argued that buying a car is complicated and therefore, the digital retailing rules that apply to groceries and apparel don't apply to automotive purchases.
With all our might, we've held on to the fundamentals of the in-dealership experience because that's what we know and that's what we can control from a sales and branding perspective.
This way of thinking is exactly what has prevented our industry from evolving to provide the customer-centric experience that today’s car buyers expect. But with health and safety mandates that accompanied the COVID pandemic, we were forced to pivot. In doing so, we've learned that we can deliver the experience car buyers really want while creating operational efficiencies at the same time.
Here are three improvements we’ve seen in the wake of the COVID-19 pandemic. These changes have quickly transformed the automotive industry, and they will likely define its future as well.
#3 - Using Technology for Process Enhancements, Not Just Lead Generation
Prior to the pandemic, the fundamental purpose of technology in our industry was to drive leads. Now, however, we are beginning to use technology as it should have been used all along.
Dealers are adapting to implement technology as a two-way communications channel through which cumbersome steps in the car buying process are simplified and streamlined. It has evolved beyond lead generation to facilitate live online trade-in appraisals, finance documentation, licensing, titling services, and more.
It has become clear that new technology creates internal efficiencies to help dealers improve their bottom line. Simply put, dealerships are doing more with less - not only because they have to, but because they can.
#2 - Creating a True Customer-Centric Experience
In the wake of the pandemic, dealers have been forced to serve their customers in new ways. Some of these new services have been desired by consumers for years, including expedited curbside pickup, touchless trade-in appraisals, at-home test drives, final in-driveway deliveries, and flexible return policies.
In a short period of time, many dealerships have pivoted by offering these services to mitigate sales loss and, in turn, ended up increasing sales in the midst of a pandemic. In this way, some dealers may have inadvertently embraced a true customer-centric experience.
The biggest lesson we’ve learned is that dealers and OEMs are not in the driver’s seat - consumers are. They want an easy and convenient car buying experience, and in turn, they will buy cars from dealerships that offer one.
#1 - Improving Net Margins by Way of Operational Efficiencies
While dealers have limited control over gross margins, they can do plenty to impact net margins by controlling expenses between their top and bottom lines. The pandemic has shown us that salespeople can work remotely and continue to sell cars, increase F&I income, and produce results.
Human capital efficiency (or lack thereof) has a tremendous impact on profitability. Showrooms certainly aren't going away, but mindsets have shifted to exciting and more affordable ways of doing business including remote sales and the use of technology for labor-intensive tasks.
Inventory management also plays a huge part in improving a dealer's bottom line – in particular, purchasing vehicles intelligently, and reconditioning, pricing, and selling vehicles efficiently. These challenges existed before COVID-19 and became even more apparent in the midst of the pandemic.
With auction shutdowns, dealers are increasingly turning to distributed auctions like The Appraisal Lane (or auctions brought directly to dealers and their customers by way of technology) as a convenient live appraisal and disposition channel. Dealers put the right numbers on cars from the start, are able to provide their customers with at-home appraisals, and dispose of vehicles they don't want or need to interested buyers with the touch of a button.
Moving Forward with a Customer-Centric Experience
Yes, the pandemic has been challenging, but with challenges come opportunities. This is our chance to reinvent our processes, create deeper efficiencies, and rebuild our businesses around a true customer-centric experience.