How to be Flexible when Market Disruptors Disrupt.

“Buying a car will never be the same” is the well-known slogan of Carvana, and if the last few years have been any indicator, they could be right. The entirely remote car vendor has taken the market by storm. Named to the 2021 Fortune 500 List in 2021 as one of the youngest companies to do so in the list’s history, Carvana continues to be the fastest-growing online used car dealer in the US. 

Carvana and other similar online car vendors have completely disrupted the car buying experience, and there’s no doubt that dealerships are feeling the impact. But maybe even more problematic is the amount of inventory that has been diverted away from dealerships. As Automotive News points out, in the time it takes the average person to brush his teeth, Carvana buys or sells another car. Who would blame dealerships for feeling frustrated by the notion of losing a deal to the remote car vendor every 2.2 minutes? 

And while the online vendors are the latest in a long line of market disruptors for car dealerships, they’re certainly not the last. Dealerships that have the flexibility to shift strategies, perspectives, and even capabilities will stand a much better chance at competing with the “Amazons of Auto” — and whatever disrupter they face next. In this second of the three-part series on dealership flexibility, discover how dealers can contend with these heavy-hitting challengers. 

Know your customers (even better) 

Whether by force or choice, dealerships thriving today have likely embraced the digital revolution. Driven by changes in consumer buying needs, dealerships are now offering online sales options, like their entirely online counterparts. Still, one key difference between the two remains: dealers know their customers. They’ve met their customers, have acquired decades of real customer information, and know more about them than any online algorithm can aggregate. And where dealers have an even greater advantage over entirely online retailers is they can leverage their now digital, existing customer database to know their customers even better.  

Dealerships can leverage their sales team, in conjunction with data, to learn exactly what their previous and current customers want and need to provide new, exciting ways to connect with them. From creating new digital “services” such as offering vehicle walkthroughs to one-on-one video calls with an individual sales rep, dealerships can—and should be—making the buying experience more personal for their customers, like the in-person car buying experience used to be. By leveraging data and this more human understanding of the customer, dealerships can not only compete, but beat the competition from today’s online vendors. It just takes a little bit of flexibility to get there. 

Reward your customers 

Despite massive growth over the past few years, online vendors miss the mark on another key aspect: they haven’t been around long enough to build loyal and returning customers. In addition to their inherent newness, one of the most frequently mentioned flaws to the online vendor strategy is their lack of customer incentives. There’s no “friends and family discount” or monthly specials on pre-owned vehicles when it comes to the online vendors. But, fortunately for dealerships, this has been their bread and butter for decades. Dealerships love repeat business – so much so that they offer incentives for customers that return. And car prices are negotiable at the dealer, as are the incentives. Customer loyalty still exists, and it’s brick-and-mortar dealerships that have the opportunity to capitalize on it. Dealerships that are creative and flexible in the ways they reward their faithful customers will be more likely to see returning and referring customers.  

Leverage your service offerings  

Yes, we mentioned this in Part 1 of our Flexibility Series, but there is no doubt that the same holds here as well. Anyone who has purchased a car from a dealership knows the initial relationship is with the sales team, but the long-term one with the dealership’s service team. The same cannot be said for the online vendors, as vehicle services are an aspect they simply can’t match, and a factor that fuels much criticism from customers. On the other hand, many dealerships have established service centers and can make the service department one of their strongest assets (and biggest moneymakers). Dealerships that have the flexibility to leverage and promote their exceptional service offerings over the vehicle’s lifetime will have a competitive advantage over any online retailers. 

Work with a strong digital partner (like Shift Digital)  

Leveraging data to know customers better, rewarding loyal customers, and leveraging service offerings may seem like a lot to take on. But this—and more—can be managed with the help of a strong digital partner. At Shift Digital, we provide the data and insights that dealerships need to compete with the latest in a long line of market disruptors. Contact us today to learn more about how we can help your dealership remain flexible.