How You Can Prepare Your Dealership As the World Reopens

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I work with many dealerships across the US and I am always astounded by their resilience, strength and willingness to embrace change. COVID was a tough time for all industries but the auto industry in particular took a heavy hit. With us all being encouraged to stay home - people were driving less; using less gas; needing less routine auto maintenance; scheduling fewer service appointments and some getting rid of their vehicles altogether. However the future is looking bright with 2021 already off to a good start and as the world opens back up Forbes is anticipating an 8% year-on-year rise in auto sales in 2021, with the industry on track to overtake 2019 levels by the end of 2023.

All great news - however, as the world prepares to reopen dealerships need to be prepared that the market has changed and along with it customers needs and desires.

Priority number 1 - keeping employees and customers safe - safety is at the forefront of everyone's minds. If you can show your customers you are doing all you can to keep them safe and have gone above and beyond with COVID measures then this will be a huge piece of mind. The main way to do this - reduce your touch points. People are still not comfortable with the everyday - riding in elevators, going to grocery stores, therefore anticipating this and being mindful and thoughtful of their concerns will go a long way. Getting the balance right of ensuring your dealership offers a contactless experience while still capturing the customers attention so they still want to purchase is key to making it out the other side of this pandemic - because lets face it the behaviors that have changed in the buying process are not going to go back to how they used to be.

According to KPMG The majority of consumers, 78 percent, start the online journey on independent sites, such as Autotrader or TrueCar. and only 14 percent of buyers start their research on dealer websites. Why am I telling you this, well the pandemic has given dealers the opportunity to change this around and by embracing innovation now you can make your dealership the go to place.

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Concerns of employees are very similar to those of your customers. Reducing touchpoints for an employee while in the workplace as well as providing them with the training and tools to still be able to operate at the best of their abilities are the number one things they need right now (outside of compensation and recognition). Again it is important to be mindful by taking a step back - you don’t have to redesign the whole sales and service process but do begin to embrace new technologies and now more than ever it is important to listen to your employee ideas of what they may have seen work in other industries - gain their buy in to make the process better and ask what you can do to make them feel more comfortable.

Frost & Sullivan predictions:

  1. $50 billion worth of parts and accessories will be sold online globally by 2020.
  2. More than 70% of vehicle sales leads will be digital by 2023.
  3. Beyond 2020, digitization will enable lead conversion ratio improvements of more than 80%.
  4. Over 1.3 billion vehicles will be in operation across the globe by 2020.
  5. Investments ranging from $500 million to $5 billion are expected from several OEMs and select dealer groups to improve in-store digitization.

I have been impressed at the leadership in this space by my dealer partners who have acted quickly to reduce their touchpoints for customers and employees in all the usual ways such as masks, hand sanitizer and gloves for all who come onsite - especially when test driving - wiping down vehicles before and after use - allowing customers to take the vehicles for a test drive on their own without a sales representative in the vehicle.

Many dealerships have also begun to embrace virtual sales or virtual diagnostics with some success while others have embraced new technologies in the form of what we at Yoshi can offer of contactless gas to fill their fleet - reducing the need for your employees to have to go to the gas station - therefore eliminating that potentially hazardous touchpoint and looking after your employees safety and wellbeing in the process. However again it is that fine balancing act of being able to reduce touchpoints in a way that enhances the dealership with minimal disruption while also enhancing it.

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By 2025, it is estimated by Frost and Sullivan that 6 million vehicles will be sold through online platforms. The transition from a well automated online process to a personalized one will be key to accelerating the adoption of online retail with value post pandemic no longer meaning the lowest price. Forbes calls it the new “bricks-n-clicks' ' retail paradigm.

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It’s certainly a hard concept to grasp, especially for someone like me who has been in sales and in the automotive industry my whole life, however we are getting better at it.  It is possible to have face to face interactions without physical contact. What do I mean by that? Well in traditional transactions or interactions we always conclude with a handshake. But it is time to embrace sincerity without physical contact and to train your employees to do the same. How can you build relationships with your customers behind a mask and without facial expressions? Verbalize the physical cues from the past and tell the customer how you are going to go above and beyond - that's the key.

The second priority is to streamline your operations by embracing new technologies that have emerged. This will not only help with the safety aspect I already mentioned but will also provide efficiencies and reduce costs. Dealerships have never been more busy in their history but it is a different kind of busy - adapting to the sales process via Zoom, creating video reels of inventory on the lots, remote diagnostics for routine maintenance, mobile service vans -  and while there may appear to be a lot of heavy lifting upfront those who crack the virtual selling and virtual diagnosing will become the victors in our industry - as Forbes wrote “Forget A Showroom Visit, Just Crank Up Your Computer” - I personally don’t think it is that simple but it certainly will become part of the sales mix.

I also mentioned contactless services that dealers have been embracing from the safety angle, but they also come into play with streamlining operations and reducing costs. These contactless services take one thing of an employee’s ever growing to do list. Embracing this new way of selling openly lends itself through innovation to increase innovation and operations need to follow suit. The PDI process is time consuming and tedious - just as we followed suit in adapting and evolving the sales process PDI needs to follow the same model by looking at alternative emerging solutions. If you can speed up that process - i.e., by using contactless gas delivery vs sending an employee to the gas station to fill up each vehicle on your lot then opportunities are tenfold.

Another way to speed up the PDI process is to reduce your footprint, which becomes easier when some of your sales become more virtual. Land is an ever-increasing tough commodity to come by so if you can combine your lots for selling and servicing you can benefit from efficiencies for less travel time and cost savings of a smaller footprint.

Finally addressing changes in behavior time management is going to be an important skill to master post pandemic. If you can reduce or outsource any tasks that are a time suck, then you can free yourself up to tackle the tasks that matter and that are critical to having a positive impact on your business.

All in all it is an exciting time as we come out the other side of the pandemic. I truly do believe dealers are best placed to be the leaders in innovation and safety and I look forward to seeing our industry emerge victorious as the leaders in this space.

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