2020 has brought about massive change to the automotive industry and especially for dealers. With less traffic due to widespread digitalization and mobility, COVID has caused further distance between the dealership and the consumer. Thankfully, many dealers have implemented concierge programs to keep fixed ops running, but what about selling vehicles?
Has this year caused a complete break in the aging process of car marketing and selling? With autonomous cars arriving soon, will new car purchases take on the looks of electronic device purchases? What does this current transformation mean for the industry and its customer base? Let’s see where it might be headed and what can be done to thrive during the reset.
Prepare with permanent concierge services
It’s been talked about often in these pages, but concierge services are here to stay. Most likely, you have those in place at your dealership, but if you don’t, it should be the first item to take care of on your quarterly calendar. Concierge services aren’t just how you take care of the consumer in service but also how you facilitate the buyer when purchasing a car. Providing for online purchase and touch-free delivery will be a foundational pillar of the future if you’re looking to thrive.
Prepare with online consumer sales
Consumers communicate with brands through different channels while considering the purchase of a product. With online channels playing an increasingly important role in even the smallest of purchases, it’s not a stretch to think they’ll do the same with an automotive purchase.
This interaction is key when looking at your younger buyer segment. Online channels play an ever more important role, particularly for younger consumers who have already configured their cars as easily as they configure their electronic devices. The next step is bypassing a trip to the dealer and receiving the car just like a package is delivered through Amazon.
Carvana has been doing providing online purchase and delivery for a while and Volvo is into its first year of online sales. A Volvo Car spokesperson says, “The platform has generated significant interest, particularly with younger buyers and those new to Volvo.” And as a forward-thinking dealer, you’ve already placed online sales and on-location service into practice. If not, then it’s time.
Prepare with subscriptions
Ridesharing has shown that consumers are open to a subscription service for automotive use. And it also shows they’re comfortable not owning a car at all. How can a dealership use Uber to inspire ways of attracting this new consumer segment?
Dealers can benefit from looking at ridesharing apps for inspiration. Instead of selling the car as a product you can sell the dealership as a platform that provides an enjoyable transportation experience. For some, the experience is the ability to get back and forth to work. For others, it’s the ability to get out of the city for a weekend. Still, some want to try out a car before they buy it.
If you sell experiences instead of a car, then you’re on the road to success with this market. A car is just the means to that experience.
For consumers who’ve grown up with monthly payments on phones and subscriptions for apps, it’s not a great leap for them to consider subscribing to a car. After all, this study from IPSOS suggest that automobiles are becoming another technological device to them.
Subscriptions have been around in the automotive space, but they’ve been centered on more expensive brands and new cars. That brand and consumer isn’t an acceptable target market for a subscription experience since their consumer still sees ownership as important and a admire a brand’s value.
The subscription market needs to be more targeted toward younger first-time buyers who need transportation or with the sub-prime consumers and your used cars.
Subscriptions or rentals are a much better opportunity for subprime buyers since they help transition them towards a new car purchase. Unlike a rental, the accumulation of their payments could also serve as a down payment and help increase their credit scores. By providing an opportunity to use a car when they can afford it, you’re not locking them into a loan with no ability to pay. This pay as you go opportunity provides use of the vehicle but not the obligation of a long–term agreement and can also makes profitable use of your used car inventory.
Using an Uber-style app could allow you to take sign-ups, payment and contract approvals without a visit. After approval, the car could be delivered to their location.
Prepare by thinking outside the box
None of these suggestions are necessarily new. And they’re surely not exhaustive. But thinking through consumer buying habits have proven to lead to a bonanza of success for those companies who are deep into the online experience like Tesla. Thinking like the consumer is never a bad thing.
Regardless of what is done in the months and years ahead, there will be a change taking place in how people buy cars and interact with dealerships. It’s time to put your thinking cap on, move to the future and thrive.