Digital retailing has been a critical tool for dealers who have dealt with in-store restrictions throughout 2020. Many wonder if its impact has staying power or if the industry will shift back to traditional retailing once the pandemic subsides. We spoke with Peter Cooper, who runs the very successful Lexus of Lehigh Valley, about the impact of digital retailing and what it could mean for the industry moving forward.
Even though business is brisk and the auto industry overall has fared well, Cooper says his dealership will not be ahead of last year’s numbers in every area. Putting their Paycheck Protection Program money aside, Cooper says that profitability-wise, they will come out ahead even after being closed for two months this year.
This pandemic also allowed the dealership to do away with some legacy costs and other overhead expenses that should have been reviewed a while ago. Like many others, Lexus of Lehigh Valley has also learned how to increase productivity with fewer resources. When the dealership opened back up from lockdown, there were only two managers and one transactional employee that, in the first month back, did 90% of the business at that time in the previous year.
What this pandemic has also shown, is that retailers like Amazon went from 18% of all online shopping transactions to 28%. That 10% increase came from consumers who wanted to buy out of stock essential products. In lieu of the standard toilet paper pack, consumers were originally looking for, Amazon offered similar alternatives at steeper prices and longer wait times. Cooper says the same principle holds true for the automotive industry. However, while Amazon will probably never be caught in a situation like this again, car dealers will revert back to their normal practices, but they cannot blow off the customer experience.
While Cooper believes this is a great opportunity for dealers to learn and grow in the long-term, he’s not helpful that they will. COVID did accelerate change and Cooper thinks that once consumers adopt and trust the process fully, there will be an even harder and faster approach for digital retailing. The single most important friction point that all dealers will face is how to take care of consumers and deliver a remarkable online experience.
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