The future of car dealerships

August 8, 2014
Andy Bothwell

The way we buy cars is changing.

As a statement, that probably doesn’t seem too bold. After all, the way we shop for anything has already changed immeasurably compared with 10 years ago; witness the demise of once-mighty High Street stores like HMV, Woolworths and Blockbusters.

[quote align=”left” color=”#999999″]It has taken longer for the motor industry to catch up with the shift to the digital world[/quote] In some ways, it has taken longer for the motor industry to catch up with the shift to the digital world, probably because, along with the purchase of a house, buying a car is just about the biggest financial commitment people make.

But the online revolution is coming to the automotive sphere and it’s not as far into the future as you might think.

True – people are still nervous about signing away a car-sized amount of money over the internet. Most people want to do their research online, comparing models and reviews on different websites; they may even go as far as starting to choose options and finance packages on a specific model online. But when it comes to signing on the dotted line, people still want to see the salesman’s face.

For car dealers, it changes their sales landscape beyond measure. No longer can they ‘make a sale’ on the dealer forecourt – well, they can but they now only have an average of 1.3 dealer visits per purchaser to do it in. They have to rely more on leads generated by online searches and test drive requests.

And it’s only going to get more difficult for them; in fact, many people who know a great deal about such things in the industry will tell you that the traditional dealership ‘shed’ will, in time, disappear altogether, replaced by open point management solutions – to the layman, a service whereby dealers will operate from a central hub but will effectively bring its products to the customer, rather than the customer having to travel 40km to their nearest dealership.

The revolution is already underway – by the end of the year, you can expect to see the first digital car dealership coming to a shopping centre near you.

Take a browse through this very website and you’ll see we talk a lot about how the way we tell stories has changed. Nowhere else in the motor industry is that more true than here – car dealers must not only adapt the way they sell us cars, they must also find new and innovative ways of talking to us, of making us want to buy them.

Through our work with industry pioneers like What Car? Connect, Accident Exchange and DCML, not to mention car brands that need to continue to sell their wares, that communications landscape is starting to be constructed.

[quote align=”right” color=”#999999″]It will take time and not everyone will make it to the other side[/quote]

It will take time and not everyone will make it to the other side – only the dealers with the foresight to adapt will survive. Here’s a few things dealers need to start doing well:

  • Make sure their stock is fully updated before the close of play each day – with people’s busy work lives, most online car searches happen in the evenings or over the weekend
  • Have an ‘always on’ approach – whether that’s a Live Chat capability in the evenings so that they can talk to customers while they are searching, or a system in place to respond to leads generated overnight first thing each morning
  • Cater for an audience that is increasingly social media-savvy by engaging with customers away from the traditional dealership portal

It’s a fascinating time and my hunch is that it will start moving apace any time soon. The automotive world is already weighing up driverless cars, so how long before we see car-less and entirely virtual dealerships?

The days of the traditional car dealership aren’t done. But they may be numbered.


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