Car Dealerships: Here's Why They Need to Make Some Changes Soon

Is the future of car dealerships on shaky ground? We think it is. And while it may not happen in the near future, it will happen, especially if you look into two important factors that are driving these changes:

1. Information can be found online

The internet is changing the way people buy cars. Gone are the days when they need to go to a car dealer to inquire about the vehicle they plan to purchase. Today, all they need to do is to go online, and they can know everything about a car--from its specs, price, financing scheme, to even good and bad reviews.

2. Digital technology is changing the landscape of how cars are being sold

A long time ago, advertising was only limited to TV, radio, magazine, and newspapers. Now, other platforms such as mobile phones, tablets, and the like are helping brands online.

According to AutoTrader, a 2016 Car Buyer Journey Study revealed that around 42 percent of shoppers use different devices when researching and shopping online. What's more, it will rise to an estimated 80 percent by 2020.

This scenario gives buyers newer buying platforms. Now, they don't even need to go to a car dealer to negotiate for a price--all they need is an email address.

How Dealers Can Cope with the Changes

With all these changes happening, it's about time that car dealerships make some adjustments. Otherwise, they may become obsolete or, at the very least, insignificant in the future. Here are some ways they can do this:

Create a strong presence online

Online research is so important these days, so much so that it's already part of the car buying process in itself.

According to AutoTrader, a 2016 Car Buyer Journey Study revealed that 60 percent of car buyers spend an average of  five hours and 12 minutes when using third-party sites or apps to research about a vehicle online.

The study also revealed that 88 percent of shoppers use the internet when researching and buying a car, while 78 percent use third-party sites or apps when they're thinking of buying a vehicle.

With so many people using the internet these days, it’s extremely important for dealers to make their presence known online. And it's important to diversify. Focusing on spreading the word using only your website isn't enough; incorporating social media platforms, like Facebook, Twitter, Instagram, and many others, will give dealers a much wider audience reach.

Utilize digital technology and other online formats in the selling process

It's also important to make a site digital-friendly. It should be read in different formats, such as tablets, mobile phones, and other platforms without any problems for the users.

Focus on the mobile experience

According to the Car Buyer Study, 46 percent of respondents that use the Internet access car information through their mobile phones.

Interestingly, 23 percent of them used a cellphone to research or shop even while at a dealership. These are the top five things that they did with their mobile phones:

• Compare the vehicle prices at other dealerships (59 percent);
• Look for prices of vehicles at the dealership where the consumer was before (41 percent);
• Compare other dealerships’ inventories or stock (38 percent);
• Check the inventory of the dealership where the consumer was before (36 percent); and
• Research for trade-in pricing (33 percent)

Focus on Hiring the Best People to Work for You

While extremely important, sales quotas shouldn't be the driving force when selling vehicles in the future.

Why? Because of the internet. Since going online has made information easily accessible, customers almost always have an idea of a car’s price, specs, and other details.

In short, buyers are becoming more intelligent and discriminating. Small talk, nor pressure selling, will not convince people to buy. What will convince them is knowing that their questions are answered and their needs met. They want their experience of buying a car as easy, informative, and pleasurable as possible.

And the only way to do that is to hire the right people who have the right attitude and character to fit this mold.

Focus on providing customer experience and personalization, not on the number of sales

Reaching sales quotas is important in a car dealership's business; however, many dealers focus too much on it that their entire vision becomes lopsided. It's like they forget the most important factor in their business: the customer

Focus not just on reaching sales but also on customer satisfaction. Check out the ratings and reviews that people make, and find ways to make their experience of buying a car memorable and pleasant.

Here’s an example: Hyundai–Rockar has one of the most successful showrooms in England. Why? Its founder and boss, Simon Dixon, explained why to Autocar:

"Rockar doesn’t chase sales targets; we believe customers will buy from us if they enjoy the experience."

This pretty much sums up why Rockar is now Hyundai's biggest partner today.

One important difference between them and other traditional dealerships is that their employees are not really sales people--they're more of experts in their field.

"Our employees aren't paid commission for sales, as their job is to empower the customer with the knowledge they want, rather than to hard sell,"  he said. "The customer might only be supported by people in the shop about the product, supported through the journey of speccing a car so they know all the facts."

The key here is customer personalization and customization. Jared Rowe, president of Cox Automotive Media explains to InsideLane:

“Experience drives loyalty, and since buyers want a personalized experience, the dealers who do the best job at creating a compelling and customize experience in their stores will reap the best returns in terms of loyalty.”

The "Apple Loyalty" Mystique

One good benchmark that integrates all these points is to learn from Apple's core principles: seamless customer interaction, effortless problem solving, speedy service.

These values create great customer experience--one of the reasons for Apple's resounding success. And when you add up its elegantly simple designs and useful products, then we’re not surprised why this $215 billion technology giant enjoys a "high level of brand loyalty" and repeatedly ranked as the world's "most valuable brand" today.

Conclusion

So, should dealerships make some changes to remain relevant in the future? Yes. Otherwise, they're in danger of becoming obsolete or, at the very least, insignificant down the line.

Still, one has to remember that at the end of the day, car dealerships offer one thing that online stores can't: genuine human connection. Good car dealers can sincerely nurture customers with time, information, advice, and service without any barriers to interaction--something that a laptop or a mobile phone can never do.

They fully understand that in the evolution of things, theirs is not really about the car business, or even about getting the sales. A true dealer knows that it's really a "people's business", and it's truly the customer that gives life and breadth to their business.

If they take this to heart, then they'll continuously thrive with the changes.