Many dealerships quickly shifted to a customer engagement strategy that was online-intensive during the Coronavirus shutdowns (reflect with help from this Reuters story back in March). But other challenges complicate the current business landscape, as new vehicle inventories are low—a lagging symptom of factory closures—and lots of consumers are seeking used cars as an alternative, driving prices higher (see this story from USA Today).
Earlier this year, tourism struggles facing Hertz and other rental car companies led people to believe there could be some used car price deflation, as fleets were potentially liquidated (see this older story from Automotive News from 5/1/2020). But any surge in inventory has been a small percentage of the demand on preowned cars, and the idea that supply could overserve the demand for used vehicles has failed to materialize.
Pre-pandemic, the focus for many car dealerships was pretty simple: Drive traffic to websites and showrooms. Now, it's more than a numbers game. In an age of social distancing, high unemployment and challenges related to inventory management, strategies must include driving the right kind of traffic, with regard to both the style & price of the inventory available, and the qualitative/qualifying characteristics of potential buyers.
Ways you might use this issue to gain an appointment:
- Remember that your Covid Benchmark studies from CMG Custom Research include an automotive one-sheet, which includes some brief commentary about consumer comfort levels with shopping in a dealership, test driving via curbside delivery, and buying a car online.
- Using your traditional qualitative research tools (Scarborough, Marshall Marketing), along with data from the CMG Custom Research Covid Benchmark study, begin to build a profile of people who plan to purchase a vehicle in the near term. Offer these insights as the basis for a discussion about how purchase intentions have changed among various target consumers (age, occupation, etc.)
- Mindful of how much of the car shopping process has migrated online, offer an audit of current digital performance and a discussion about your attribution services. (To illustrate how competitive the online space is becoming, share a copy of this story about Carvana from the Wall Street Journal.)
Using this issue in a Needs Analysis:
- Is your dealership experiencing the kind of new vehicle inventory shortages that we're hearing about in the national trade press? And if so, how long do you expect that to be the case? Are the factories you rely on most back to higher-scale production/operation?
- Visit the dealership's website for conspicuous clues before asking this question or validating your observations: To what extent have pre-owned vehicles become a higher priority for your dealership? What have been your most successful measures for keeping-up used car inventory (auctions, trades or lease returns, outright offers to "buy your car")?
- With more consumers relying on the internet to conduct more and more of their pre-purchase research (and that's not just for automotive), is there anything about your web presence, traffic or online marketing that you're concerned about? How are you monitoring effectiveness and ROI, in terms of attracting shoppers and converting them to buyers?