6 Key Automotive Trends You Need to Know
Everyone always wants to know what’s next; what the next step in marketing is. For dealers, staying on top of tomorrow’s trends is essential to competing in today’s market. But if every dealer is already focusing on the latest trends, how can you stay ahead of the trends and your competition?6 Key Automotive Trends You Need to Know Click To Tweet
Focus On the Future
A recent study broke down global automotive trends that could affect the average dealer’s ability to succeed both now and in the future.1 I’ll focus on how these trends could affect dealers in the U.S. and what strategies could be used to fight or incorporate those trends.
- Sales wars will escalate
We’ve already seen this trend for several years here in the U.S., but this is a trend that’s apparently here to stay. It might even get worse. Though vehicle sales seem to continually rise, the competition for each sale rises as well. Uncertainty in the market’s long-term progress is predicted to result in fewer traditional growth opportunities for dealers and intensified competition.
- Profit margins will be under more pressure
This search for the competitive edge has increased spending on incentive programs – which has led to market erosions and tighter markets. Dealers are increasingly spending more and more on marketing strategies designed to incentivize customers into their dealerships, which is only succeeding in killing the market. To say nothing of third-party websites that offer transparent pricing that reveals the inaccuracies of dealer incentives. To fight this trend, dealers like you must accelerate lead generation and lead conversion techniques, rather than adding to the decline of incentive marketing that only reduces profits.
- Loyalty programs will grow in importance
This study, conducted by Accenture, reports that top performing dealers retain less than 70% of consumers that have purchased a vehicle and plan to return for service. This corresponds to our data that recently proved that the actual retention rate of the average dealership is less than 25%. Google is on the same track:
Conquest marketing MUST increase and you must have the right strategies to do this. Fortunately, recent market forces and technology have created a window for conquest marketing that dealers would be wise to utilize before it’s too late.
The study revealed that most re-purchase loyalty programs will not be strong enough to influence significant results. Dealers must develop a sustainable customer appreciation model that will increase customer loyalty and service department engagement.
- Mobile shopping will increase for car-buyers
This one is probably obvious to you. Sadly, technological advances to mobile phones and devices are not being used for communication nearly as much as they are being used for self-serve activities like browsing inventory and researching information. You might already have a strong digital and mobile presence, but, if you don’t, you might be facing a decrease in customer interactions. This is true across the board. Whether your dealership is located in a low-population town with no other dealerships or a highly competitive market, you will lose sales if you’re not utilizing digital and mobile advertising and website advances.
- Digital services will expand customer options
“In the next five years we’re going to move further than we’ve moved in the last fifty,” said Michael Simcoe, Lead Designer at GM. He was talking about the opportunity designers have to reinvent vehicles in the future – what it means for OEMs and what it means for drivers.2
But let’s talk about what it means for you.
While addressing consumer demand for cross-platform in-car systems is crucial for the OEMS, dealers are the front line in assisting the 61% of consumers who believe it’s either essential or important that their car have the same operating dashboard as their phone.2 This number will only grow.
One of the biggest growing complaints of car consumers is not understanding or being able to utilize the full functionality of the tech in their cars. On one hand, they have the expectation of total, flexible connectivity and on the other, have to contend with legal restrictions on using handheld devices while driving.
You can help bridge this divide between capability and fluid functionality by positioning your sales team as experts on all the new technology and how it works across different dashboards. Consider offering a private sale for a few hours two to three times per month to welcome past customers and prospects to come in and have their questions answered.
Consumers are exhibiting an increased willingness to pay more for cutting edge technology. That revenue can be yours if they feel they have a knowledgeable team who are willing to walk them through the offerings and set them up for connected success.
- Consumers will seek more control over outcomes
Consumers and dealerships have been in an age-old battle for control and consumers have won. You must speak to the consumer and give them the reigns if you want your marketing and showroom to see consistent results. By creating a successful customer experience that provides consumers with the independence and information they need to sell themselves on their next vehicle, you’re letting them feel the control they need while you influence them down your marketing funnel and through their buying journey. You must learn from innovators in other industries (like Amazon) to learn what will make you a competitive force in today and tomorrow’s automotive industry.
Don’t let the ever-changing world of the automotive industry pass you by. By staying up to date on the trends of the moment and the future, you’ll be able to stay ahead of the future needs of your dealership and be an influencer in your market. You won’t have to worry about decreased traffic because you’ll know what’s coming around the corner and how you can continue to sell more cars year after year.