Optimization, integration and the human touch are all key to retail success post-pandemic
The last thing anyone wants to hear about right now is more explanation about all the different shortages, global catastrophes and other things beyond our control that are currently affecting the auto market. But, as Canadian dealers gaze out upon nearly empty car lots, they are also recognizing that somehow their bottom line is doing fine, sometimes even better than fine. Perhaps, this is just a different market, not worse, and requires more of a shift in perspective than a sea change in operations.
A DesRosiers study from June 8 reported, “the auto industry as a whole saw record dollar level figures of retail sales in Q1 this year.” The report finds automotive parts, accessories, and tire stores climbed 7.6 per cent, New car dealers increased six per cent, both “rising well above pre-pandemic highs”. Used car dealers increased 1.9 per cent for the first quarter of 2022.
The challenges are not with consumer demand, clearly. But with competition from a growing variety of direct-to-consumer models, successful dealerships are going to have to offer consumers a better buying experience. Canadian auto dealer talked with a variety of experts in the industry, from a CADA Innovation Laureate, to DMS and CRM specialists, to a digital imaging specialist, and the consensus seems to be that the successful path forward means optimizing the online appeal of the dealership, capitalizing on beneficial human interaction, using technology to remove “pain points” for the consumer, and ensuring a seamlessly integrated digital-to-in-store buying experience.
Obviously, the main advantage that dealers have over the direct sales platform is the human touch. “We know people buy things from people that they know, like, and trust,” said CADA Laureate for Innovation Award recipient, Mike Trotman, of Trotman Auto Group in BC. “That’s something that from our inception we’ve been passionate about; delighting a client. We’re the first ones buyers talk about after they have navigated through their shopping experience. Because we’ve done something to stand out, or we took their breath away, or we delighted them, or over-delivered, or something in that realm.”
Where the direct-to-consumer model wins with buyers is the transparent “one price” for everyone model. “Tesla is all one price, no negotiation,” said Trotman. “And you pay that, and your friend paid that, and your in-laws paid that.” In the dealer world, he says, there’s still negotiating, and consumers aren’t always sure they’ve gotten a good price. “That lack of trust can make dealers their own worst enemy because they haven’t been transparent,” said Trotman. “But when you appreciate that your buyer has done the online research, and celebrate that they know what they want, you both enter the negotiation from an informed, comfortable, empowered point of view. And then you have a healthier transaction.”
Vicky Goupil
“By 2022, almost all of a dealership’s new customers will have started shopping online. Whether for a used vehicle or a new vehicle, customers no longer arrive at dealerships to ‘see what’s new’.”
— Vicky Goupil, Associate Sales Director, Torque Management
How a dealership is marketed and perceived online is a crucial aspect of today’s retail world, and a lot of it comes down to something as simple as “nice pictures of nice cars.” But getting the nice pictures isn’t as simple as it seems. “The photos are the first thing a potential customer sees when they go on your website,” said Peter Duffy, from Dealer Image Pro, an online auto photo app company based in Florida. “The picture is what takes the car to the market.”
Dealer Image Pro, Piranha, CarLife and other such apps can automate the task of taking the best pictures to make the best impression every time, no matter who is taking the picture. Trotman Group also uses a specialized video program, called Quickpage, on their dealership websites to help the sales team make personal connections with car shoppers, even when they are still in the online part of the buying journey.
Paradoxically, being a human selling vehicles to other humans, and doing the job well, requires some complex computer solutions. And, it turns out, transparency is still the key. Ideally, these platforms work together to manage customer data, inventory, customer communications, marketing, financing and dealership operations, so that the humans involved can focus on each other, and not all the numbers and specs involved.
Torque Management is a DMS company in Quebec. In an interview with Canadian auto dealer, Torque’s Associate Sales Director Vicky Goupil said, “By 2022, almost all of a dealership’s new customers will have started shopping online. Whether for a used vehicle or a new vehicle, customers no longer arrive at dealerships to ‘see what’s new’. Customers are informed and come on site to “touch” what they have seen online.”
When a buyer is intrigued enough by the digital marketing, social media marketing, and Google searches they’ve been doing to make a trip into a dealership, the technology now needs to enhance the interaction between the customer and salesperson.
Daniel Racine is the GM of Activix, a CRM company based out of Montreal. He told Canadian auto dealer “It’s less a question of price today, but it’s a question of availability and customer service. So, are you adapting at your leadership level to have the right tools to take the online customer into a transaction in the store?”
“Dealers need to ask, “How do I continue the digital consumer experience in-store? How do I continue that transaction, and build on it?” said Louis-Yves Cloutier, the CEO of 360 Management in Montreal. “We need to go online and offline very seamlessly to make it easier for the consumer.”
Making a seamless transition from the customer’s online shopping into a dealership transaction is the key to making sales today, particularly using the information the customer has provided when online, and not making the customer re-submit anything when they are in the store. This means integrating DMS and CRM and financing functions, to capitalize on the people skills and personal communication that give dealerships the advantage over direct-to-consumer platforms.
“It means that the salesperson needs to understand that the sales journey starts, most of the time, remotely,” said Cloutier. “And when they start to engage with consumers online, instead of pushing for a visit in store, they’ll start the transaction online, to eventually get the client to come in, to finalize the deal. “Or maybe the client may not even come in, they’re going to finalize everything remotely.”
Louis-Yves Cloutier
“Dealers need to ask, “How do I continue the digital consumer experience in-store? How do I continue that transaction, and build on it?”
— Louis-Yves Cloutier, CEO, 360 Management
An integrated CRM with a DMS is also integral to serving customers once they have bought a vehicle. “As a CRM allows us to manage sales opportunities, it is important to have rigorous tools and processes in place to be able to follow your own customers and to be able to contact them at the right time,” said Goupil.
In a very supply-restricted market, which will probably remain the case for some time, dealers are also going to have to get creative with alternative revenue streams from the service department. The Trotman Group has been successful teaming up with Shopify to promote aftermarket sales.
“We’re really big into customization and accessorization of vehicles,” said Trotman. “So you buy a Jeep, or a Dodge Ram truck, and you want to put wheels and tires or a lift kit on it, or a winch, or a tow kit or roof backs or whatever. So our service guys totally build customized vehicles. And our digital team is as customized, a full online shopping experience, powered by Shopify. You can go and shop online and see before and after pictures of vehicles. It’s a full niche business unto its own.”
It’s possible to build an omni-channel sales platform that offers value to both dealers and customers. One that empowers dealers to use their data to target customers, find what they want, get it to them, and make a profit; as well as customers, who get to understand the process, what’s available, what it will cost, and how long it will take, all while feeling they are getting good value for their money.
At the end of the day, for the dealer model to remain relevant, “We need to make sure we understand, ‘Why do we exist?’” Trotman said. “If we’re not clear about that, our viability is in jeopardy.”
