As many analysts have predicted, 2019 is off to a rocky start for auto sales. Challenges from a variety of factors including rising interest rates, government shutdowns, and inclement weather have resulted in some of the highest dealer inventories level in years, according to Automotive News. In addition to high supply, dealers are also challenged by changes in demand, such as the dominating popularity of SUVs and light trucks or evolution toward electric engines and in-car virtual assistants.
Every new challenge calls for dealerships to adapt their strategy in order to survive in a market expected only to reach 16.8 million new-vehicle sales; a half-million drop from 2018’s total sales of nearly 17.3 million. On the bright side (because I always like to see the gas tank as half-full), this climate does offer smart dealers one big advantage – the opportunity to learn from the effects of Q1 and reevaluate their sales strategies to fuel a more lucrative Q2. Having spent more than 15 years managing the marketing strategy for one of the nation’s top auto groups, I can’t stress enough the significance of using data and analysis to align sales and marketing efforts efficiently.
This call for self-evaluation also comes at a time when the automotive industry is undergoing a technological overhaul. Dozens of manufacturers are making a point to lean toward electric vehicles, and even more, are exploring the possibilities of autonomous driving and artificial intelligence. On the dealership level, advancements are being made in everything from web and online retailing tools to digital marketing solutions. There really is no corner of the industry that doesn’t stand to be changed drastically in the near future by modern advancements. Though many are excited by this technological revolution, there are just as many dealers feeling overwhelmed by the waves of new products and services flooding the marketplace. Regardless of your own personal level of technical expertise, if you manage a dealership’s decisions, now is the time to determine how modern advancements fit into your day-to-day business environment.
Trade show floors are filled with companies claiming to be an asset to dealerships, but experienced dealers might be skeptical of sales and marketing technologies when they’ve found success on their own for so many years. In reality, nothing can compete with the years of expertise gained from working the showroom floor. However, the intention of many emerging technologies is not to replace a dealer but to work in conjunction with their existing marketing strategies. Finding a technology that works to fulfill a dealership’s needs can be as impactful as adding another member to the team – and can result in invaluable insights for the business as a whole.
The main benefit of technology-based marketing solutions is the massive amount of information they can provide by harnessing the data that already exists within a dealership’s day-to-day operations. Growing advancements in artificial intelligence and machine learning now allow data to be collected at a pace and scale more than any one human can match – which gives dealers time to focus their energy on the bigger picture.
Once the power of this modern technology is embraced, it can be equally confusing to understand how this wealth of data can benefit an individual dealership. Dealerships’ goals are as different as their inventories, and this impacts what qualifies as relevant data. Cutting through the clutter can provide dealers with the following insights:
- Track consumer interactions with specific inventory and study buying trends
- Measure the progress of current marketing efforts and pinpoint driving forces behind individual sales
- Notify dealerships to their position within the changing marketplace and measure marketing solutions against external sales factors
- See sales in a better light and make well-informed decisions moving forward
Using this data to track inventory trends can help dealers recognize their strengths as well as provide insight on how to optimize future solutions. Gone are the days of relying on hope to carry dealership sales, and Q1’s mistakes no longer need to be Q2’s destiny. Instead, dealers can begin to regularly reevaluate their inventory marketing tactics on a need-be basis based on proven successes and failures. It’s more important than ever to understand the inner workings of a dealership’s consumer base and to be able to customize inventory strategies in order to ensure a sale. In this complex environment, it is vital for dealerships to truly understand what will keep their inventory turning. Incorporating data-driven solutions into existing marketing tactics is the key to preventing dealerships from falling behind and ensuring a more efficient path to sales.
Learn more about Mark Conner’s upcoming session at Digital Dealer 26 Conference & Expo this April, “Winning in 2019’s Challenging Market: How to Make Your Inventory Strategy More Efficient.” Understand how to analyze necessary data to develop a strong marketing plan and set your sales in motion!
