Consumer preferences have rapidly transformed in the retail automotive sector. Knowing how the expectations have changed and how buyer needs will continue to evolve will be essential to long-term dealership success.
On this episode of Inside Automotive, host Jim Fitzpatrick is joined by Bill Wittenmyer, Chief Sales Officer at DealerOn. Wittenmyer has kept a bird’s eye view over the industry as it has grappled with new technological innovations and paradigm shifts in the way business is conducted. Now, he discusses how consumer preferences have evolved over the last year and how forward-thinking dealers are preparing their teams for success.
1. Wittenmyer notes there are many unknowns in regard to electric vehicles, such as product reliability and driving ranges. This has led consumer preferences to shift in favor of hybrids, which, for many buyers, remain the better option in terms of both cost and accessibility.
2. Inventory and interest rates will continue to present challenges for consumers in 2024. Used vehicle supply remains under pressure, while rates for new vehicles average between 10% and 11%.
3. Wittenmyer notes that a majority of sales professionals in the retail automotive sector joined the industry during or after the COVID pandemic. The same is true for many dealership managers. As the car business inches closer to pre-pandemic conditions, these employees may find it difficult to adjust to normalized selling practices. Inexperienced associates may hurt the consumer experience in 2024.
4. The future of digital retail remains uncertain in the automotive industry. Some online buy-sell platforms, such as Vroom, have exited the used vehicle business, citing challenges in acquiring inventory and sustaining profits. Consumer preferences remain in favor of conducting shopping in-store, although buyers overwhelmingly continue to complete at least some part of the purchase process on the internet.
5. Dealerships are still profitable. However, Wittenmyer warns that the car business is set to become more difficult. Dealers will need to drastically improve their digital retail options, even if buyers continue to purchase in-store. Consumer preferences will continue to evolve at a rapid rate for the foreseeable future. Remaining keyed in on these changes will be crucial to long-term success.
"Process is number one. I think it's really important to re-examine your processes, and that's all the way through from how are your people making that presentation, how is that experience, how is the phone call into the store, how is my website...any of that stuff." — Bill Wittenmyer