WHY WE’VE STILL GOT A LONG WAY TO GO TO INTEGRATING THE VIRTUAL AND ACTUAL DEALERSHIP
In a recent column, I spoke about the “two solitudes” of the auto retailing world in the context of an increasingly digital environment. This time, I’ll take a closer look at what the customer actually sees and experiences when they walk into the dealership. This is done from the point of view of a consumer who is digitally comfortable and has done their initial shopping on the web (probably most buyers these days). First, a few checkpoints on reality.
WHO’S ACTUALLY COMING IN TO THE STORE?
Much attention has been focused recently on younger consumers and the assumption that these customers are the most obvious “digital consumers.” Some call them “Gen Y,” others call them “Millennials.” Essentially, they are consumers between 25 and 34 years of age.
Regardless of what we call them, the reality is that fewer of them are likely to show up in your store over the next couple of years.
In a recent presentation at a series briefings in Michigan in early August, Polk posed a number of commonly held perceptions about the industry and looked at the facts to see if there was indeed support for this perception.
One of them was that “younger buyers’ (18 – 34) interest in new vehicles is waning.” The reality indicates that while this is generally true in the U.S., they believe the trend will change. The reasons are mainly centred around the current economic climate and the impact it is having on younger consumers’ decision-making.
• Buyers aged 18-34 accounted for 11.5 per cent of total new vehicles registered in the U.S. to date in 2013. This is down slightly from 2012 and down from over 14 per cent in 2008;
• The 18-34 age group experienced a 44.2 per cent decline in net worth between 2001 and 2010;
• They experienced an income decline of 6 per cent over the same period;
• There was a 91 per cent growth in student loan balance between 2003 and 2012.
(Data from Polk & Co.: Perception vs. Reality, August 6, 2013)
All this points to what is likely a temporary shift in the age of new vehicle buyers to older age groups. In a recent article in the Wall Street Journal, it was noted that consumers aged 55+ accounted for 40 per cent of sales in 2012 — up from 33 per cent in 2008.
Those aged 18-34 accounted for 12 per cent of sales — down from 14 per cent in 2008. This is a fairly surprising and somewhat sudden shift, caused in a large part by the economic situation in the past year or two, with youth unemployment up, despite a slowly improving economy and stronger markets.
CAN WE FORGET (AT LEAST FOR A WHILE) ABOUT THE DIGITAL CONSUMER?
Not likely. A recent publication by Statistics Canada shows that older Canadians have increased their Internet usage and are closing the gap with younger Canadians. Even among those aged 65 and up, almost seven in 10, access the Internet at least once per day.
With these facts in mind, I decided to stop in at a number of stores in a particular market area of the Greater Toronto Area (North York / Richmond Hill) to see what I would find. What would the face of the dealership look like after I had been online? Would there be clear signals that the store and its staff were ready to do business in a digital world, one where access to information and communication were seamless?
For the most part, it was disappointing. There was little evidence in most stores that the dealership was oriented to a digital consumer and many signals that the industry is still mired in the past.
In some, there were easel boards front and centre, showing sales tallies. Two dealerships used scruffy and very old-fashioned looking paper pads, while some had white boards advertising specials. Even they look very outdated in today’s environment.
There seems to be a real opportunity here for manufacturers and dealerships to present information to customers and prospects in a much more compelling and engaging way.
The technology is certainly there and it is no longer as expensive as it used to be. Chrysler is getting ready to roll out a digital delivery tool in the U.S. market — a definite step in the right direction.
THE WHOLE PACKAGE
Besides physically visiting the stores, I also went on each of their websites. I discovered that, while most are pretty comprehensive and functional, there are still some strong signals that the industry is struggling to move away from tradition.
Despite a lot of fancy graphics and flash technology, when you click on a button that says “advertisement” and you see an almost illegible screenshot of a print ad, it does not convey a message of a digitally advanced business.
So the “face” of most dealerships I visited was decidedly not a digital one. When dealers and manufacturers think about facilities, they tend to focus on the building, the décor and the physical layout.
The face you (and the manufacturer) present to the customer or prospect is more than the facility. It is the visible evidence of how you conduct business — from advertising in mass media, to communication with the customer via email or social media, to how you and your staff communicate and interact with customers in your store.
