Post-COVID digital car sales require dealers and automakers to work together on hybrid strategies to meet customers’ needs.

June 09, 2023 09:34 AM

The post-pandemic digital vehicle sales environment requires dealers and automakers to shift the way they market to and serve customers, said panelists at a recent Automotive Press Association event.

“The environment today, post-COVID really is extremely different than it was pre-pandemic, whether it be inventory or supply chain shortages, labor shortages,” Eric Frehsee, president of Tamaroff Auto Group in Southfield, Mich., said during the June 7 APA panel discussion in Birmingham, Mich.

“The transformation, the digital transformation, the way consumers are shopping with dealers today, it’s changed the entire landscape in our business,” he said. “There’s been a lot of changes with the OEMs in regards to how they work with our dealership network to embrace these changes, whether it be through technology and software, through training.”

Tamaroff, a 55-year-old family-owned business, has six metro Detroit retail dealerships and sells Acura, Honda, Kia and Nissan.

Frehsee stressed the importance of automakers understanding that although the pandemic sparked rapid changes in the industry, the decades-old dealership model will need a lot of time to evolve. Automakers need to lean more on dealers for marketing data, he said.

“We have to figure out better ways to communicate with customers,” Frehsee said. “Just saying ‘buy now’ on your website so that we can tout that we’re able to sell online doesn’t necessarily mean we’re communicating with the customer the way they need to be communicated with.” Tamaroff said his group takes a hybrid approach using digital and in-store customer interactions.

“What we’ve done internally is really focused on streamlining the process and being able to take a hybrid approach where you’ve got a customer that wants to do the research online,” he said. “They want to price out their car, they want to value their trade, giving them the tools and the resources to do that, but then using technology so that when they do come into the showroom floor, because the take-rate on people buying 100 percent online is in the single digits.”

Room for improvement

The post-COVID-19 environment “when cars were selling themselves” created “a lot of bad habits” in the dealerships, Frehsee said.

“A lot of the after-sale, delivery, going over the features and benefits of the vehicle, some of those steps were getting skipped,” he said. “This is a major challenge in our industry when it comes to the retraining and the transformation of EV in the dealerships, because there’s a lack of knowledge and experience and training that exists on our end that frankly, here’s one of the things that we need to lean on the OEM for, and that’s training.”

Veteran salespeople at Tamaroff may have large clienteles but couldn’t adapt to  communicating with customers digitally, he said. In response to that, Tamaroff in May launched a newly built 12-seat business development center to field incoming Internet and phone leads.

Another panelist, Matt VanDyke, a former FordDirect CEO who helped create the automaker’s digital retailing, said “dealers have the opportunity to control a lot of what’s happening by having a pulse on what’s happening in the market and adjusting their digital storefront, their websites.”

Having the right words on a dealer website is essential to optimize online traffic, he added.

“Because so many brands actually kind of have a full shelf of inventory, yet when you go on their websites, you see things like ‘check for availability,’ search for if this car can still be found and customers are smart, they don’t know there’s a 90 days’ supply, but they know there’s plenty of certain models out there,” said VanDyke, now president of Shift Digital, a Birmingham, Mich., digital marketing company.

Data sharing

Collaboration between dealers and automakers also is key, especially when it comes to digital marketing, he said.

“OEMs tend to underestimate the fact that 70 percent of the shopping in the industry is happening on dealer websites,” VanDyke said, noting they’re looking for information on price, payment, inventory and availability.

“You can get into a tunnel mindset as a brand that’s just thinking about your website and thinking that’s going to solve everything, and it’s not. Beyond that, dealers have to recognize that in addition to them owning their data, controlling it, understanding their data-sharing agreements and things like that, that brands are going to interact with their customers via their branded apps that everybody has to open and lock the doors and now schedule service and do things like that. That’s where the collaboration has to come in, because the technology exists that the customer is going to interact with both entities.”

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The customer experience

Jessica Stafford, senior vice president of consumer solutions for service and technology provider Cox Automotive, said meeting customer expectations “comes down to connecting experiences.”

Cox’s Car Buyer Journey Studies showed customer satisfaction was down in 2022 compared with the previous two years, she said. Financing replaced inventory constraints as the biggest challenge for buyers who also said they prioritize saving time in the car shopping experience.

Giving consumers “personalized, intuitive experiences where they can shop where they want, they can buy where they want” is essential,” said Stafford, who has 16 years of experience in automotive marketing and previously managed search engine marketing and optimization for Coke and Royal Caribbean.

Meeting consumers’ needs includes leveraging technology to provide a simpler buying experience that’s less intimidating and more educational, she said. It also means still including in-store interaction with customers who want a more traditional experience, she added.

Said Stafford: “Ideally, you’re going to be catering to an increasingly divisive type of segmentation of our customers out there and that’s why that concept of meeting them where they are becomes so important. Leveraging the technology that’s out there to enable it and then put this human layer on top, because our business is still a human business, it’s a relationship business, but you can leverage digital tools now to start building the relationship with your buyers even earlier in the process.”

SOURCE: Automotive News