Dealership Trends for 2022 and Beyond

Welcome to the age of radical change in the automotive industry. Driven primarily by the way consumers are buying and a continued inventory shortage, automotive dealerships had to rethink their business strategy over the past 18 months. As an industry-leading provider of digital marketing optimization, we had the opportunity to assist dealerships nationwide through these changes, providing them with data-driven solutions to their evolving needs. 

As discussed in our previous article about dealership trends over the past year, we expected significant shifts in the auto industry, just not as quickly as they came. As we look forward to the coming year, we anticipate the automotive sector—dealerships specifically—will delve into conversations about reshaping their business models much sooner than anyone expected.  Using data-driven insights, we look ahead at three general industry trends dealerships are likely to encounter and discuss ways in which they can prepare for additional changes ahead of schedule. 

EVs—Educating to Sell  

The swift pace of technological advancements and innovation has revolutionized the automotive industry, shifting toward electric, autonomous and smart vehicles, connected technology, and more. Electrification, specifically, may come even sooner than most predicted. However, despite massive awareness campaigns led by the automakers, many consumers still have questions about this shift to electric vehicles (EVs). Consumers’ questions and concerns are wide-ranging, from the overall charging infrastructure available to the cost-benefit analysis of owning an EV.  

The onus for educating consumers on the benefits of EVs will ultimately fall on the dealerships, requiring sales teams to modify their process—focusing less on sales and more on education—to help consumers make the switch. But to educate consumers, dealerships must first start with educating their employees. Whether it’s a dedicated team of EV-specialized sales representatives or an education initiative for all sales reps, dealerships must ensure their team is well-equipped to ease the minds of potential customers. 

Furthermore, vehicles’ traditional “service” component decreases drastically for the non-gas guzzling EV. For the EV sales process, dealerships will have to reframe EV “services” from servicing the vehicle to providing services to the customer. For example, many consumers are still uncertain about the in-home EV charging station—who installs it, who services it, who repairs it, who do they call if they don’t know how to use it? Dealerships can provide customers with their preferred electricians, facilitated in part by the dealership, to manage the home charging station installation. Therefore, the dealership doesn’t lose the sale because they don’t do the home installation, and the customer is at ease knowing they don’t have to manage that process independently. 

Mobile Service for Customer Convenience 

With decreased service requirements on EVs, in-bay vehicle service appointments will also reduce with EV adoption. In conjunction with the shift to digitization, the geolocation of dealerships has been rendered obsolete for consumers. Dealerships will need new, innovative ways to leverage their service offerings. This is where mobile service comes in. 

With the option to have nearly any product or service delivered to your doorstep (cars included), why wouldn’t customers prefer to have their vehicle serviced in their driveway? There will be opportunities for dealerships to differentiate amongst their competitors in the next year by providing their customers with the convenience of an at-home service. With this, dealerships will require initial investments to build out vehicles that can provide complete services off-site.  

Additionally, taking geolocation out of the dealership’s equation, the marketing opportunities for dealerships run the gamut. From at-home or mobile services to mobile sales centers and pop-up shops, dealerships will be looking for unique ways to provide sales and service opportunities to new and existing customers. 

Subscription-Based Ownership 

Unlike the trend that has dominated many other industries—from television services to software applications—subscription-based ownership is expected to gain traction next year. Due to inflation, student debts, and the emergence of newer technology such as EVs, conventional gas-powered vehicles are a less valuable investment for younger generations. And, much as in the real estate market, this demographic is not too keen on owning a vehicle.  

The target demographics’ habits are essential as with any other consumer good. Attracting the attention of younger buyers will require dealerships to provide options that make sense to and make money for the dealership. Many consumers will opt for a short-term subscription to a particular vehicle rather than owning a car with depreciating returns. Like a lease in the sense that there is no personal ownership, but the terms are generally far shorter and more flexible. Also, insurance and maintenance costs are typically included, unlike a lease.  

The profit opportunities for the dealership with this model could be substantial. It allows the consumer to afford a vehicle at a much lower price, but the dealership “sells” the vehicle dozens of times of the year. Consumers would not have to bear the inevitable maintenance costs, and dealerships would have guarantees on their service bay usage (and ensure to service the vehicle). Subscription-based models have had tremendous success in other industries, and we are sure to see a rise in this trend in the auto industry. 

More Changes to Come 

Looking ahead, the automotive industry will remain in transformative mode. For dealerships, that translates to a radical shift in their business models. Customer satisfaction is the ultimate end game, whether that means education for EV adoption, mobile service offerings, or subscription-based ownership. As flexibility and adaptation will be essential for dealerships in the coming years, Shift Digital and its team of retail trainers can provide the tools necessary for dealers to excel through these trends. 

To learn more about how Shift Digital can help your dealership stay a step ahead of your customers and your competition and for support implementing your customized plan, contact your dedicated Shift Digital representative today.