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How Can Dealerships and A Direct-to-Consumer Approach Coexist?

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While working on primary research regarding the customer journey, I’ve been speaking with both consumers and dealerships about the most pressing matters in automotive innovation.  Hearing from both sides has made me realize that there is a bit of a disconnect in their worldviews, and this disconnect is fueling so many of the issues we’re seeing now at dealerships.

Consumers Do Not Want the Traditional Dealership Experience

As I spoke with consumers, I found that they almost entirely embraced the direct-to-consumer experience across the board when shopping. This frictionless buyer journey is executed seamlessly by Tesla and Amazon, both companies which have names synonymous with ecommerce perfection. Quite simply, consumers do not want to spend hours at dealerships from the beginning to the end of their car-buying journey. They do not want to complete packets of paperwork sitting in the sales office. They don’t want to sacrifice days off or late nights to complete such a momentous purchase. Consumers today are conditioned to shop online and get instant gratification, and that expectation bleeds into everything that they do and alters how they shop.

It’s not the dealership’s fault that the in-person car shopping experience has fallen out of favor, but it is their responsibility to listen and adapt to customer preferences. In a world where we can now place orders in the morning and receive most products that night or the next day, the traditional dealership venue for car shopping doesn’t fit. Consumers want to do most of the shopping, if not all of it, in the comfort of their homes and at their convenience with minimal interaction from the dealership.

But… Dealerships Love Serving Their Community

Here is the interesting part of our research: when I asked dealerships what they liked most about their jobs, it was centered around helping people. Almost every general manager or dealer principal said that satisfying their customers was the best part of their jobs. This response was consistent with each person that I spoke to – it never deviated. We heard such heartwarming stories from the dealerships with examples of how they were able to serve their consumers… The same consumers, we found, generally wanted to spend less time at those dealerships and shop for their cars online.

Direct-to-Consumer Car Buying Experiences Bridge the Gap

Our findings lead me to believe that OEMs should pay close attention to how customers are beginning to reject the traditional dealership experience. In response, OEMs should work hard to build closer relationships with their consumers. In the past, OEMs outsourced this local branding responsibility to dealers, but today, they should find ways to make that relationship more direct and effective through the customer lifecycle.

Without a doubt, consumers want a more independent and seamless experience. Allowing them to find the right vehicle, reserve that vehicle with a deposit, and order that vehicle all online would do wonders for OEMs. If we take this one step further, all the necessary paperwork for buying or leasing a vehicle can be done online as well.

Dealerships Play an Important Role, But Customer Experience Needs to Evolve

This all might seem like bad news for dealerships, but it really isn’t. I don’t agree that we should cut out the dealership experience, but dealerships will need to transform to meet the consumer’s needs from start to finish. Consumers may not be going to dealerships for hours of research and paperwork, but now dealerships can become product experts and deliver exceptional customer service and customer experiences. The dealership can become an enjoyable place, free of aggressive sales tactics and the wasted hours with which they are often associated. Instead, they become hubs where consumers can experience both the vehicle and the new technologies and experience the OEM’s brand in a positive way.

Customers Are Opportunities for Relationships

It is no longer possible for OEMs or dealerships to ignore consumers’ expectations in the shopping process. Consumer needs are changing fast, and OEMs and dealerships will have to evolve just as quickly if they want to stay relevant. Oversimplifying segmentation and underestimating the impact of life forces on behavior have led to a growing disconnect between what companies think their customers want and what consumers say they want. To bridge the gap, OEMs and dealerships need to move from focusing on the quantity of sales to seeing their customers as they see themselves: multifaceted, complex, and doing their best to adapt to unpredictable life circumstances.

This evolution is well underway. The “Amazon effect” has not only changed the retail industry forever but also every other industry, training consumers to expect a seamless and convenient retail service at every turn – the automotive industry included. The abundance of information and availability of data, along with the latest technology, have made it possible for consumers to do thorough research and compare the products by themselves. Digital-first buyer journeys are replacing the need for in-person discussions.

There is no going back, either. Instead of going against the grain, OEMs should begin to offer more direct-to-consumer experiences that empower their consumers, and dealerships must transition toward an informative showroom experience that consumers tap for in-person experiences with the products and features. And of course, they would be fulfillment and service centers as well.

I believe we will be seeing a lot more of this evolution within the automotive industry, the benefactor always being the consumer – as it should. Better consumer experiences equate to increased dollars and longer cycle customers for dealerships and OEMs.

Connect with me if you’d like to further discuss these trends and take advantage of Perficient’s automotive expertise in direct-to-consumer transformation.

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Keith Tomatore

A long-time senior executive in the auto industry who has held the position of SVP, Retail Marketing at Global Team Blue (GTB, a WPP Company) on the Ford Retail Business. In this role, Keith worked with the Ford Dealer Associations across the country to help them with their Precision Marketing and digital efforts. Also, he served as CEO of iFrog Marketing Solutions, which focused on Automotive advertising solutions for Tier 2 and Tier 3.

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