Why Used Car Dealers Need to Adapt to Thrive in a Changing Market
The automotive industry has always been subject to market shifts, and today is no different. Buyers are dealing with elevated vehicle prices and rising interest rates, leading to potential delays in vehicle purchases. On the flip side, dealers faced inventory shortages, staffing issues, decreased consumer demand, and the necessity to embrace more digital marketing and sales channels to meet evolving consumer needs.
By acknowledging these challenges and investing in the right technologies, dealerships can navigate these turbulent times and emerge stronger. Shifting to more digital-first strategies is not just an option but a necessity to stay competitive and meet the demands of modern car buyers.
This article delves into the changing consumer landscape, and how dealers can adapt to meet new expectations and thrive in the coming years.
Consumer Expectations are Changing
Today's consumers are more informed and tech-savvy than ever before, and their evolving expectations have drastically reshaped the automotive industry. A 2023 report by Cox Automotive revealed that when consumers are asked about their ideal vehicle purchase process, 71% indicated a preference for a hybrid approach— combining both online and in-person elements. Twenty-one percent of buyers said they would prefer to purchase a vehicle entirely online, while only 8% said they would prefer to purchase only in person.
These insights highlight the increasing preference for online car shopping, especially in the used automotive market.
Staying Ahead in a Competitive Market
As the digital buying journey becomes the new standard, dealerships must improve their online presence to attract and retain modern car buyers in a fiercely competitive market. The digital revolution has leveled the playing field, allowing smaller dealerships to compete like larger ones. To stay ahead, dealers need to adopt digital strategies and tools to improve their online presence, all while creating a better buying journey for shoppers.
Several digital solutions are particularly helpful for dealers:
Modern & Mobile Friendly Website
Your website should be more than just an online brochure. It should be a dynamic, interactive platform that personalizes the shopper's experience, keeping them engaged with your inventory at all times. One of the primary challenges to help improve online presence for dealerships is maintaining a modern, user-friendly website. An outdated design can lead to poor performance and low shopper engagement. Additionally, low search visibility can make it difficult for potential customers to find your dealership online. Ensuring that your website is up-to-date, visually appealing, and optimized for search engines is crucial for attracting and retaining customers, ultimately providing your shoppers with a great online presence.
Lead Management
Dealerships often struggle with managing a high volume of leads and prioritizing them effectively. Implementing robust CRM systems can help automate lead management, track customer interactions, and provide valuable insights for better decision-making. These systems can highlight how many leads are lost to competitors by poor sales follow-up or poor-quality leads. By ensuring that information gathered online is easily accessible to sales staff in-store, dealerships can provide a consistent and smooth transition for buyers.
Inventory Syndication
Dealerships that are showcasing limited online inventory exposure and low shopper engagement with inventory can hinder sales. Dealerships need to ensure that their vehicle listings are consistently updated with accurate descriptions and high-quality images across all platforms can significantly improve a dealership's online visibility and engagement. By integrating with a DMS, this process becomes more efficient, ensuring consistent and effective inventory syndication.
Digital Retailing
For years, consumers have spent hours researching online before purchasing a vehicle. Today, however, 76% of car buyers are open to completing the entire purchase process online, according to a report by Cox Automotive. Digital retailing can help improve customer experience by providing financial transparency, a significant concern in today's high-interest-rate environment. Shoppers want to understand the full financial implications of their purchase before stepping into the dealership. By offering detailed financial information online, including financing options and cost breakdowns, dealerships can build trust and make the buying process more transparent and less intimidating for customers.
Digital Marketing
In today's digital age, buyers use various online channels to research their vehicle purchases, making it essential for dealers to have a strong presence throughout the buying process. Effective search engine optimization (SEO) is crucial for building awareness. Many dealerships struggle with low search visibility, which makes it challenging for potential customers to find them. By optimizing your website for search engines, you can significantly improve your online visibility and attract more car buyers.
Search engine marketing (SEM) strategies can further improve your dealership's presence in search results, ensuring you reach a broader audience of potential car buyers. Additionally, an automated email marketing tool can be used to keep potential buyers engaged throughout their buying journey. By sending personalized follow-up emails based on the user's browsing history—reminding them of vehicles they viewed and offering special promotions or incentives—dealerships can maintain a strong presence and encourage conversions.
Embracing Digital Technology for Dealerships
Adapting to the changing consumer landscape is crucial for dealerships aiming to thrive in the future. Used car dealers must embrace change now and invest in digital tools to meet evolving consumer expectations and navigate the competitive landscape. By embracing digital technology and providing personalized experiences, dealerships can position themselves to succeed now and in the future.