Transitioning from Traditional to Contemporary Business Models
In today's dynamic automotive market, traditional dealership models are transforming. We explore how they are evolving into contemporary, customer-centric models under the guidance of an experienced General Manager
A 2018 Google/Kantar TNS survey found 92% of car buyers research online before purchasing. This trend is driving dealerships towards transparent, no-haggle pricing and consultative sales approaches.
The modern car buyer demands a transparent and relaxed buying experience. As a result, fixed, no-haggle pricing models and highly informed, consultative sales approaches are becoming the norm.
2. Digital Transformation The Rise of Online Platforms
Gone are the days when the majority of customers began their car-buying journey on the dealership lot. Today, digital platforms are central, allowing customers to browse, apply for financing, and even complete their vehicle purchases online.
3. Inventory Management Embracing Just-in-Time Inventory
Dealerships are leveraging data analytics to optimize inventory, reduce costs, and ensure they have the right vehicles available at the right time.
4. Financing & Insurance (F&I) Bringing F&I into the Digital Age
The modern dealership makes F&I options accessible online, allowing customers to explore and make decisions at their own pace, enhancing transparency and convenience.
5. Service and Maintenance Integrating Sales and Service
Dealerships are increasingly offering service subscription packages and concierge-like services, such as vehicle pick-up and return, transforming the service department into a seamless part of the customer experience.
6. Consumer Engagement Beyond the Sale: Nurturing Customer Relationships
Contemporary dealerships use digital channels, including social media and email marketing, to maintain ongoing relationships with customers, far beyond the initial sale.
7. Sustainability and Electric Vehicles (EVs) Adapting to a Greener Future
With a growing demand for sustainability, dealerships are rapidly expanding their electric and hybrid vehicle offerings and educating themselves and their customers on EV technology.
8. Multi-Channel Retailing Meeting Customers Where They Are
Beyond the traditional showroom, dealerships are innovating with online platforms, pop-up stores in shopping malls, and mobile services that meet customers where they are.?
9. Data Utilization The Power of Analytics
Smart dealerships are using advanced analytics and big data to optimize everything from inventory and pricing to targeted marketing and customer relationship management.
10. Ownership Models Exploring New Horizons
As consumers seek alternatives to traditional car ownership, forward-thinking dealerships are exploring and promoting alternative models, such as vehicle subscription services.
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Conclusion: The automotive retail landscape is evolving at an unprecedented pace. The successful dealerships of tomorrow are those that embrace these changes today, placing customer experience, digital innovation, and sustainability at the heart of their business strategy.
For auto dealerships, the road ahead is clear: adapt and innovate or risk being left behind in a world that increasingly values convenience, transparency, and sustainability.
Author: Babak Rosenthal Mohammadi is a General Manager, approved by Toyota Motor USA. His collaborative strategy, fortified by intensive training initiatives, has transitioned dealer business models to contemporary approaches that resonate with today’s market and the dealer principal’s vision. This strategy has not only maintained profitability but also established remarkable performance.
Date: August 15, 2023
Note: All content in this article is original. Images are sourced from a paid subscription service and are used with permission. Data from Google/Kantar TNS, U.S., The Drive to Decide Survey, n=500 recent car buyers.