The auto industry has changed significantly over the past few years, and automotive retail as a whole is experiencing major changes as a result. There are multiple factors that have driven change in the auto industry.
Many of the recent changing trends in automotive retail have largely resulted from the onset and continuation of the COVID-19 pandemic and all of the changes the pandemic brought to the world. At the beginning of the novel coronavirus pandemic, car sales and overall demand for new and used vehicles plummeted around the world. Widespread lockdowns due to the spreading virus led to manufacturing delays that are still impacting the production of new vehicles in the auto industry. Lockdowns also deterred many car shoppers who actually were in the market for their next vehicle at the time from making their purchase because many dealership lots were closed or open with very limited hours and a lot of safety restrictions in place.
Although demand for new and used vehicles has increased significantly throughout 2021 and early 2022, car sales numbers have not yet returned to pre-pandemic levels and inventory shortages continue to plague automotive dealerships as a result of manufacturing delays that have severely limited new vehicle production.
There is no doubt that automotive retail is changing, and it will continue to change as time goes on and the world changes as well. Keep reading to learn more about three of the most notable ways in which automotive retail is changing and how it is expected to continue to change into the future.
The Digitization of the Auto Industry
Some of the most major changes in automotive retailing have occurred as a result of the increasing digitization of the auto industry. Before the COVID-19 pandemic began in early 2020, less than 2% of vehicle sales were completed online. By the end of 2020, almost 30% of vehicle sales were completed online.
Throughout the pandemic, many auto dealerships expanded the online options they offered customers in order to make up for some of the sales they lost as a result of lockdowns that prevented customers from visiting auto dealership lots in person. This change has definitely stuck in the auto industry. Many car shoppers expect to be able to browse dealerships’ current inventory selections online, and some even prefer to complete the entirety of the car-shopping process from behind their computer screen.
It is important for auto dealerships to expand their online options as much as possible. This includes updating your dealership’s website, making sure its online inventory is current and remains current, and offering pre-financing approval options online. Some auto dealerships have even gone so far as to offer a delivery service that allows car shoppers to complete the entire vehicle purchase process online and have their new vehicles delivered directly to their driveway. While your dealership doesn’t necessarily have to go that far, this new trend speaks to the magnitude of the increasing digitization of auto retail.
The Increasing Importance of Genuine Connections
Another major change in the auto industry focuses on the importance of forming genuine connections between auto dealerships and their customers. Especially considering the increasing digitization of the auto industry, it is crucial for auto dealerships to form and maintain connections with their customers in order to increase brand loyalty and establish themselves as trustworthy businesses in their communities.
Gathering customer reviews on Yelp and Google Business is a great way to increase customer loyalty and emphasize how trustworthy your dealership is to potential customers. Offering customers incentives such as free or discounted maintenance services through your dealership is another effective way to keep customers coming back to your dealership in the future. Following up personally with past customers via phone calls or text messages to make sure they are happy with their vehicle from your dealership is a great way to form and maintain connections with your customers as well.
The Shift Toward Electrification
Something that automotive dealerships should certainly be aware of is the shift in the auto industry toward the electrification of vehicles. Many major automotive brands have made various pledges that focus on their commitment to increasing the eco-friendliness of their manufacturing process and the vehicles they produce and distribute to auto dealerships.
This is in response to the increasing severity of the threat of climate change as well as prospective car buyers’ increasing demand for hybrid and all-electric vehicles. It is important for auto dealerships to keep this shift toward electrification in mind. It is a good idea for auto dealerships to stock their inventory with as many eco-friendly vehicles as possible and to focus on marketing these vehicle models in order to reach more prospective car buyers who are in the market for hybrid or all-electric vehicles.