Dealers trying to navigate the future of auto retailing can be sure of one thing – it will be a wild and wooly roller coaster ride
It seems though you cannot escape the barrage of “experts” predicting the demise of traditional auto dealerships. It comes mostly from industry outsiders, and they cite many consumer trends as wake up calls for dealers.
Autonomous vehicles, ride sharing, online vehicle purchases, Uber, AirBnb… the list goes on and on. It is true technology enabled communications, both by the written and spoken word are catalysts to new ways of communicating, researching, ordering, paying, sharing and even getting around town.
Social scientists would say that the future is happening right before our eyes. Social norms are evolving to a point where factors such as security, safety, personal space and individual control, for some at least, are giving way to new perceived freedoms, service improvement, cost saving and time use advantages.
Many of us are now very comfortable with online shopping at sites like Amazon, Nordstrom, Wal-Mart, Chapters even Canadian Tire. It is true. Sitting at my desk ordering items to arrive the next day, without the time and travel challenge of going shopping, to find the exact item I am looking for at my fingertips rather then the soles of my feet, is quite appealing.
We are raising a whole generation of young people that have never used a bank teller, never called for a cab, never booked travel through a travel agent or never called a restaurant to make a reservation. Enabling consumer technology has changed and continues to change our lives each and every day. And as consumers of everything technological, we can’t wait for the next new gadget or app to come along. It’s so satisfying to master a new app but deflating to find out that the gal next to you has a faster and better app than yours and it does way more things and looks cooler than yours; just when you thought you were leading the gravy train you realize you’re hardly keeping up with the caboose. Depressing isn’t it?
So what does this have to do with auto retailing you ask. Why am I reading these words in Canadian auto dealer magazine? Has this guy lost his mind?
Over the past month I have read approximately 20 whitepapers (not sure how that name came about) from high powered consulting houses, software vendors, futurists, bloggers and other hacks opining on the future of the automobile, autonomous driving, online this and online that, a new and improved way to buy vehicles or at least access them and yes the unspeakable… why do we need auto dealers?
Are auto dealers headed for the same fate as independent hardware stores, independent TV stores and repairmen, independent appliance stores and repairmen, independent bookstores, independent local lumber yards, independent corner stores or independent gas stations with vehicle service bays?
And remember the days, not all that long ago, when you looked in the daily newspaper for rental housing, home resale listings, used vehicle listings and used items in general. Today the savvy shopper uses Kijiji, Wayfair and other online facilitators. The last thing I will highlight is the encyclopedia. Some of you reading this column may have sold hard cover encyclopedias door to door in your younger years.
Month by month they would arrive. First the As, then next month the Bs. Heck a little over two years you could have all 26 hard covers with the knowledge of the world at your fingertips. If your family had the encyclopedia collection, you were the most popular kid in the neighbourhood come school research project time.
Today anyone with a smartphone has access to research materials that would fill a library let alone a custom-made special-order bookshelf to display your own personal encyclopedia collection. Data storage and reproduction is now so cheap that it does not pay publishers to publish certain materials any longer. The future has happened to may independent businesses over the years and the future continues to happen right before our eyes.
What are we to do as auto dealers? The brands we represent continue to tell us that building a new, larger, modern dealership is the answer. Fellow dealers tell us to buy more stores. Seems that many believe that owning multiple locations of differing brands is the long-term answer. The truth is that there is no right or wrong answer. no one has the crystal ball to see into the future. Even crystal ball sales are down now that Siri has all the answers for us on our smartphones.
I have always said the car dealers are true entrepreneurs. Hard working risk takers that find a way to prosper in good times and survive in bad ones. They are great at hedging their bets. In this time of industry transformation led by consumer preference, brand dominance and government regulation, dealers of today must continue to hedge their bets.
There is no one right answer. Therefore, dealers must play a number of educated hedges simultaneously, making sure to stay alert, keep their eyes and ears open, don’t be afraid to try new things and don’t get sucked into the abyss of purchasing solutions that promise everything and deliver very little.
Today, more than any other time in my history, working on your business is as important as working on your business is as important as working in your business. I believe the ideal split for today’s dealers is 50 percent in your business and 50 percent on your business.
Get out, go to conferences, provincial association training events, industry conferences, 20 group meetings, brand meetings. Bring your team. Gather all the learnings, discard the many that won’t work in your store or community but pay attention to the ones that do make sense and don’t be afraid to try new things.
Be patient, be consistent, stick to your plan once you decide on a course of action. your hands and arms high, scream if you’re scared or having fun, enjoy the ups, downs, sideways and upside down thrills of your real life roller coaster ride. We are living in interesting and fascinating times.
Embrace and enjoy the ride!
