Opinions & Advice

COVID isn’t going to change dealers

This is an interesting topic for me and I’m anxious for feedback. I liken this to similar questions posed after 9/11 and again during the economic downturn of 2008. We had GM’s and FCA’s bankruptcy and I was at a Chevy store so this was something up-close and personal for me. We honestly thought the world was going to change, and to some extent, it did. Here’s what happened as I remember it:

1. Dealers were closing, whether it was through consolidation, acquisition or termination of the franchise

2. All of a sudden, we had a ton of talent in the pool and hiring instantly became easier since there were so many displaced workers – pay plans changed too

3. We had vendors lowering prices and fighting for our business as there were fewer stores and they were coming out with new offerings since we had everything we needed but they had to fill the void for the stores they lost – revenue was off for them

4. Influx in inventory levels but customers didn’t increase so they were being really picky, thus there was that 3 month period before cash for clunkers where we were bending over backwards for the first time ever unlike we ever did before to make a deal just to get rid of a unit with no profit – used cars sitting on the lot were becoming a huge issue with blackwater

5. Cash for Clunkers, good for new cars, bad for used

6. Used car independents started closing thus flooding the pre-owned market further and an already bad market became a catastrophe

7. I could keep going

We learned some things from the last two economic hits. We were confident some of the things we learned would last as “the business was changed forever” each time. Just like when a major OEM goes out of business like Oldsmobile, Pontiac, Mercury, Saturn, etc. Remember when those closed? The idea is always to evolve or perish.

Maybe we can finally stop investing in Taj Mahal showrooms and working bell to bell. Maybe we can start looking at our technologies a little harder and using them better.

One thing is for sure, some of us need to STOP saying they are offering online retailing when they most definitely are not! These dealers are the ones that make me believe the COVID lessons will go the same way as the 9/11 and 2008 ones.

I'm a high-performing and dedicated executive with over 20 years of experience spanning the retail, automotive, software, technology, and customer ser...
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Alexander Lau

Under the Bridge
Feb 11, 2015
2,439
736
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Alex
Great image, yeah we all knew it was BS.

https://www.washingtonexaminer.com/...rus-we-just-shut-down-the-country-for-nothing I hate being right...

“From the data we have, it still seems to be rare that an asymptomatic person actually transmits onward to a secondary individual,” Dr. Maria Van Kerkhove, head of the WHO’s emerging diseases and zoonosis unit, said, according to CNBC. “It’s very rare.”

They broke the world for no reason - good luck with an actual pandemic now fucker...ah, who am I kidding. An actual pandemic will be somewhere between The Stand and The Walking Dead. Throw in some of the Old Testament for good measure.
 
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Alex Snyder

President Skroob
May 1, 2006
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1,588
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Alex
In 2010 and 2011 the recession lessons were still on the tip of our brains. We learned how to service and retail with half the staff in 2008 and 2009. We had reduced advertising budgets and learned that PPC (also known as SEM) marketing was a strong advertising channel. We also re-learned that sales agents were still not ready to handle internet leads. But we did finally learn that most customers were online shoppers.

What I learned from that recession are things that have and will shape my perspective for the rest of my life. One painful truth has stuck with me though: even when change is obviously better, the old ways are just easier.

The recession obviously did not last long enough for the efficiency changes to become habit. We got a bail-out to return to doing business the same old same old.

We are faced with new learnings today. We were forced into newfound efficiencies that are so impactful to the bottom line some new car dealers are seeing sales profits they've never seen before! It is so obvious that when each salesperson moves 30+ cars a month we have a winning formula! Duh of frikin duhs!

I'm with you @Chris Vitale, I don't believe we will learn enough from this short lapse in business as usual. By 2022 dealerships will staff sales departments with enough salespeople to sell 8 cars a month and have enough desk monkeys to cover that. They'll still be short F&I people as that job burns people out and pays too well to have enough on staff to keep customer wait times down. We'll be right back to the same old same old.
 
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Reactions: Chris Vitale
Jan 3, 2019
182
127
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Marc
Great observations @Chris Vitale

There's inertia in the market and COVID-19 will have a marginal effect on the business, it's simply too big of a boat.

The dealer won't have to flip their business upside down yet because the consumer will still behave in the same way.

For example Remote sales & at-home delivery will hit logistic issues and at the next thing your know, customers will ask if they come to pick up the car at the store instead.

Habits are already resuming, people are being less careful, gathering in groups more, waiting for restaurants to open, etc... The human brain forgets. At the macro level, we'll be back on trajectory before we know it.

Flexibility will be the real golden gun for dealers from now on.
 
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Chris Vitale

Full Sticker + Prep
Jul 7, 2016
20
28
First Name
Chris
In 2010 and 2011 the recession lessons were still on the tip of our brains. We learned how to service and retail with half the staff in 2008 and 2009. We had reduced advertising budgets and learned that PPC (also known as SEM) marketing was a strong advertising channel. We also re-learned that sales agents were still not ready to handle internet leads. But we did finally learn that most customers were online shoppers.

What I learned from that recession are things that have and will shape my perspective for the rest of my life. One painful truth has stuck with me though: even when change is obviously better, the old ways are just easier.

The recession obviously did not last long enough for the efficiency changes to become habit. We got a bail-out to return to doing business the same old same old.

We are faced with new learnings today. We were forced into newfound efficiencies that are so impactful to the bottom line some new car dealers are seeing sales profits they've never seen before! It is so obvious that when each salesperson moves 30+ cars a month we have a winning formula! Duh of frikin duhs!

I'm with you @Chris Vitale, I don't believe we will learn enough from this short lapse in business as usual. By 2022 dealerships will staff sales departments with enough salespeople to sell 8 cars a month and have enough desk monkeys to cover that. They'll still be short F&I people as that job burns people out and pays too well to have enough on staff to keep customer wait times down. We'll be right back to the same old same old.
That's a pretty powerful statement and true af! I'll also be using it (as my own) outside of here @Alex Snyder :) "... even when change is obviously better, the old ways are just easier..."
 

Chris Vitale

Full Sticker + Prep
Jul 7, 2016
20
28
First Name
Chris
But in general, doesn't it make sense to just sell cars where the customer is vs. lassoing them into the store? I can't think of a single major purchase I've made in the last 10 years that wasn't remote. And WHY make it so difficult, honestly? We have a sales price, TTL, Doc Fee, Rebates. Maybe a trade, maybe not. I can't think of a single good reason to bring someone into the store. I'm 50/50 on the test drive. A salesman will be tied up with a customer for 4 hours and in that time they can roundtrip a test drive to save themselves 2.5 hours.

Some will use the trade as an excuse (yes, it's just an excuse), has anybody honestly ever been happy with the trade number whether or not they're in person? How does every other industry do it that takes trades? The same way. It really is time to evolve; it was time to evolve 5 years ago. We have the tech, we need to not be reluctant to use it and anyone that is we need to train. It's only a doing issue because first it's a knowing issue.

I hope I'm wrong but I don't think I am. A friend just bought a car with a 1 year old Civic trade. Straight up deal. Great credit, great income, etc. In a major metropolitan market he sent out 4 requests on 4 different dealers websites. 3 of the 4 tried some of the most ridiculous games I'd ever seen. Things I've only heard of in folklore. He ended up getting a solid autopro and made his purchase at that store after a week of bs.

I'm debating whether or not to spend the time to blur the identifying info out on the others and post them so everyone can see what actually went on. The real disheartening part about one of the stores is he called and was mistransfered to the GM by mistake as he had the same first name as the salesman. The GM had a deal on the phone and was now involved and still resorted to giving him a $7,500 range on a 1 year old 7,000 mile Honda Civic with a perfect carfax.... Really?

Anyway, much like the post-2007/2008 environment once the dust settled, only the strong survived and there are a lot of really amazing, brilliant and cutting edge stores out there. In my sample above, in this particular market, it wasn't a statistically relevant size to be meaningful.... But it's still telling.
 

john.quinn

Boss
Dec 2, 2009
1,004
638
First Name
John
I'm not sure... could this be the end of "Just get 'em in?" That'd be a pretty big change.

I never thought Digital Retailing was a technology (I was delivering cars to homes & businesses in the 90's). DR has always been an attitude... a culture.

Forget about the dealers... think about the consumer. Consumers have been 95% complicit in Just Get 'em In; dealers could get away with Just Get 'em In because they could... the consumers would ultimately come in.

What if consumers won't do that anymore? For the first time ever, I just called a health care facility to ask if I could get what I need without being there in-person. I imagine there are and very well will continue to be a lot of those kinds of calls in all kinds of verticals.

It's the consumer who holds the cards...
 
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Reactions: Chris Vitale
Oct 5, 2018
2
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Christopher
@ChrisVitale, @JohnQuinn Following along with the conversation around changing the way car buyers shop, and the way dealers sell, I've been working on an idea for a software platform that would allow shoppers and dealers to create test drive appointments for both delivery (remote / Carvana style) and in-store (Carmax). Shoppers would receive text and email notifications confirming appointments, and receive notifications when the vehicle was en route to their location.

It would be all about getting car shoppers into the dealer's pipeline earlier, with greater clarity (have them upload their drivers license, etc), and while giving the shoppers greater control and clarity over the buying process.

I know a lot of dealers focus on adding value for their customers, versus competing soley on price. This tool would allow dealers to roll out the red carpet, so to speak, for every customer. Example mockup below.

Is this a technology you guys would use. Do you see a need for something like this?
 
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Chris Vitale

Full Sticker + Prep
Jul 7, 2016
20
28
First Name
Chris
I'm not sure... could this be the end of "Just get 'em in?" That'd be a pretty big change.

I never thought Digital Retailing was a technology (I was delivering cars to homes & businesses in the 90's). DR has always been an attitude... a culture.

Forget about the dealers... think about the consumer. Consumers have been 95% complicit in Just Get 'em In; dealers could get away with Just Get 'em In because they could... the consumers would ultimately come in.

What if consumers won't do that anymore? For the first time ever, I just called a health care facility to ask if I could get what I need without being there in-person. I imagine there are and very well will continue to be a lot of those kinds of calls in all kinds of verticals.

It's the consumer who holds the cards...
Well said and I too was delivering cars to homes and offices. I will say this though, by offering a streamlined process and straight up answers, honest answers and being able to substantiate those answers with explanation is the key. I suspect customers of all products, not just cars, want to avoid "going in" so they can also avoid the waste of time and bs. It's no different than appliance shopping (what a nightmare btw).

So much can be accomplished from "not in the store" now it begs the question "why bother?"

However, having said all that, I do see the other side of it and there's plenty of valid and good reasons to have the customer come in. Solid reasoning too. But, again, it starts with a proper and honest process with true and accurate explanations at that initial contact, whether it be online or on the telephone. It's hard for those of us here to make a purchase and we're in the business, what about civilians?

Someone said it earlier, if anything comes from this, we can only hope for two things: 1. dealers actually utilize the technology available to them (there's some amazing new tech out there right now that literally solves what we're talking about on so many levels) and 2. properly train the people and keep them trained. Nothing is worse than having a person "handling" a high dollar purchase (like a vehicle) get asked a simple question just to lie and cost the store yet another angry customer that will tell 100's of people....
 
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Reactions: john.quinn
Jul 5, 2020
1
0
First Name
DETRICK
The only dealers that were affected were new car dealers. I have a used car dealership in Conyers, GA. My sales haven't went down because my price points are low. The used cars that's selling now is the cars between $1500-4,000. https://dekalbautobrokers.com