Why Dealers Need to Adapt Now to Thrive in the Future
Adapting to change is part of the cost of being in business. Successful companies in every industry understand that change is constant and that the status quo can only take them so far.
Even the most effective business strategies and ideas eventually change with time, technology and consumer trends. This constant evolution of industry keeps companies moving forward, while others fall by the wayside. It’s the cycle of business life and it’s always churning, always ready to reward change.
In recent years, consumer demands, including the increasing impact of e-commerce platforms and service channels, have drastically altered the retail landscape. While the buying process once depended entirely on visiting the physical dealership, consumers now want a hybrid experience that combines digital and in-person elements. In fact, 81% of consumers now conduct at least some research online before making a large purchase, according to the GE Capital Retail Bank Major Purchase Shopper Study.
This article will detail the changing consumer landscape, including how dealers can navigate the complexities of an increasingly competitive digital landscape, and the reasons why dealers must evolve to meet new expectations and remain competitive in the coming years.
- Changing Consumer Expectations
- Navigating a Competitive Landscape
- Embracing Digital Transformation
- Offering Better Customer Experiences
- Embracing Change Through Digital Technology
Changing Consumer Expectations
The emergence of digital retailing in recent years has forever changed the way consumers shop. Today’s consumers are more informed than ever before. They know exactly what they want, right down to the very last detail of the brand and features. And they’ve done extensive research on pricing, including calculating monthly payments and the value of their trade-in unit.
Today’s consumers also know that they want choices, including the choice to research, shop and complete financing applications online. In fact, a Digital Retailing Study by Cox Automotive unveiled the following statistics emphasizing consumers' preferences for digital options:
- 60% of consumers would feel more positive about a dealer if they offered a digital negotiation and financing process
- 57% would be more likely to return to a dealership that offered a digital negotiation and financing process
- 62% would be more likely to do business with a dealership that's farther from home if they knew the dealer had a digital buying process
Ultimately, whatever path customers choose, the next generation of dealers will be there to deliver the options, convenience and simplicity they expect from a modern buying experience.
Unfortunately, as consumers move forward into this digital age of options and information, many dealerships are still using decades-old sales and communication practices. They’re failing to adapt to changing consumer preferences and they’re being left behind. In order to survive in this modern retail environment, dealers must take a more customer-centric approach, or risk losing market share to competitors that can meet these new demands.
Navigating a Competitive Landscape
As companies move operations online and shopping options expand, the competition for customers is fierce. The digital landscape is more crowded than ever, especially as businesses continue to adopt digital marketing strategies.
For consumers, this competition is a good thing. Shopping online opens up a world of possibilities. In addition to researching inventory and opening up more buying options, consumers can learn more about dealerships that offer digital paths to purchase.
But as the buying process rapidly shifts online, dealerships have adopted new digital techniques in varying degrees. Some of these dealers continue to provide top-tier in-store customer service but fail to apply this same focus to their online shoppers—a mistake that doesn’t go unnoticed to customers who feel that traditional, potentially limiting purchase processes are a thing of the past.
Fortunately, opening up digital purchase paths isn’t just good for consumers; dealers stand to benefit too. In addition to appealing to modern shoppers, adding more digital options opens more avenues and expands purchasing possibilities and offerings to a wider audience. And there’s still time for dealers to adapt. The key to navigating this competitive digital landscape is to embrace new technologies and trends.
Embracing Digital Transformation
With the transition to more digital buying experiences, consumers have come to expect more personalization—not unlike the personalization they get at other online retailers. This personalization includes providing purchase suggestions based on past browsing history and individual interests.
This expectation for more personalization means that dealerships need to invest in technology that allows them to gather and utilize customer data to provide more targeted recommendations and a personalized approach. Dealerships can then use this purchase history data to personalize marketing campaigns and outreach efforts, improving their chances of converting leads into sales.
In practice, providing more streamlined, personalized buying experiences paves the way for dealers to improve resource management. After all, maintaining two separate processes (the online and the offline buying experience) can be cumbersome and costly. By viewing online and offline purchase steps as part of the same connected process, dealers can identify the tools that work for both, and track how well each resource is performing overall.
Because the majority of consumers use two or more channels to shop, according to the Harvard Business Review, dealers need to constantly audit the alignment of online processes with in-store processes. This includes consolidating information, insights, and resources into a singular, cohesive strategy.
As with most things digital, success (and customer engagement) will depend on the quality of dealership data. The right data can help dealers understand what shoppers are looking for and set the tone for more personalized, streamlined experiences by reaching consumers at the right time, and in the right way.
Offering Better Customer Experiences
At the end of the day, implementing digital to in-store processes is all about providing a better customer experience. It creates the kind of seamless, flexible shopping today’s customers expect. With a hybrid buying experience, shoppers can pause their journey and pick back up at any time, on any device or platform, without losing their spot or needing to repeat steps. It also means shoppers won’t lose progress when starting the buying process online and finishing it in-store.
After all, it’s understandable for shoppers to get frustrated when they’re asked to repeat steps at the dealership. Having to fill out yet another credit application or another trade-in valuation wastes time and energy, and adds even more unnecessary and potentially costly barriers between the customers and closing a sale.
Implementing seamless digital to in-store processes also eliminates guessing games between the dealership and consumer. Today’s consumers want to know the price of a unit before they visit a dealership. The price they see online should match what they’re told at the store. Any discrepancy between these figures can lead to confusion, mistrust, and lost sales. Convenient online payment tools, like comprehensive, easy-to-use payment calculators, should match the deal at the dealership, so customers (or dealerships) aren’t left paying the difference.
Buy online, pick up in-store (BOPIS) is another great way to give your customers the conveniences they seek. A website that includes a BOPIS option streamlines the online to in-store transition. It allows buyers can complete all the steps they want on their own and still come in-store to meet with you and browse your offerings. It bridges the gap between an all-online and all in-store experience, while giving customers more options than ever before.
Embracing Change Through Digital Technology
The consumer landscape is changing. It’s yet another revolution in the constant evolution of industry. Navigating the competitive digital landscape requires a multifaceted approach—looking beyond what dealers have done well in the past to deliver the options, convenience, and simplicity a new generation of consumers expects.
By investing in digital technologies, providing personalized experiences, exploring new buying models, and staying ahead of emerging trends, dealerships can position themselves to succeed now and in the future.
The stakes are high, but the rewards of adapting to consumer expectations are well worth the work—increased customer loyalty, a stronger brand reputation, and improved profitability. Change is part of the cost of being in business, and by adapting to incorporate new digital retailing possibilities, it’s about to pay off for forward-thinking dealers.