Automotive retailing is undergoing the most profound change in more than 50 years. The traditional “brick & mortar” dealership business model is no longer sufficient, in and unto itself. Sales transaction models are changing as more and more digital retailing power-players enter the marketplace.
It is consumers, of course, who are driving this change. Motivated by the pandemic and the “Amazon phenomenon,” consumer buying behavior, including yours and mine, has rapidly transformed. Ease of shopping (online and in-store), transparency, immediacy, consistency, and, of course, accuracy are key components for retail success today. A Google study released earlier this month finds that, among automotive consumers, “65% expect more online purchase options in the future.” Having the right online presence is more critical to your success today than is the $5-50 million facility that the factory required you to build.
Dealers able to provide consumers with an engaging and consistent digital through in-store retailing experience will clearly be the winners in this new environment. Those who fail to adapt are destined to struggle.
I have been in and around the car business for more than 40 years, 20 years as a Dealer Principal / Owner, and 11 years at the helm of Market Scan. I have seen plenty of change in my time, but never so pervasive or dramatic. This has created some incredible opportunities – and some significant threats.
At Market Scan, we are involved with several OEMs and hundreds of lenders; we power more than 40 technologies serving automotive retailing, and nearly 8,500 dealerships. We have dealers in our system who have grown their already solid businesses by more than 220%, during/post-COVID! Many great stories to tell. In spite of the challenges, it is also an incredibly exciting period for our industry.
“COVID-19 presented a challenge for every dealer in automotive retailing,” said Haiken. “When your sales showroom and the manner in which you do almost all of your sales gets shut down, you can feel sorry for yourself – or realize this is a massive opportunity. Being a small but nimble business, driven by creativity and a willingness to reinvent our business model – and how we actually accommodate clients – were key drivers. Couple that with the cutting edge technology and solutions that FRIKINtech and Market Scan offer and you have a powerful recipe. Objectively, we’re simply providing the consumers with the experience they have been looking for all along. Through this experience, we became the No. 1 volume Volvo dealer in the country, with 100% of deliveries [300+ per month] taking place at the customers’ homes. This would have been an absurd notion a year ago – but that’s the new normal for us.”
In future columns, I will do my best to relate more great stories, plus some advice based upon what we are seeing and what our experience tells us.
With Respect and Best Regards,
Stephen Smythe, Chief Executive Officer at Market Scan Information Systems