I don’t care about the technology. And I don’t care about the internet. As much as I care about customer attention. It doesn’t matter where it is. Car dealerships who care about more car sales are doing this right.

I have personally invested in multiple Amazon Alexa’s in my home, only because I feel that consumer attention in the next 10 years is going to be on voice. You can ask Amazon Alexa or Google Home anything and you’ll get a response immediately. Eventually we will be able to buy almost anything online using voice, including cars sales from car dealerships.

This analogy should beg the question:

Where’s my customers attention?

This is why I don’t care about technology, but rather about where the car buying customer’s attention is and where it’s going.

Overtime, I have noticed that people tend to focus so much on technology and the internet when actually that doesn’t really matter as much. I’m not saying don’t invest in technology. I am saying, identify where the consumer’s attention is and then use technology to innovate?

Car dealerships in South Africa need to have a view of the future to achieve this – right now everyone keeps looking to the past all the time.  If you keep looking in the rear view mirror, you will have a head on collision.

Once you have that figured where your customers attention is, then create businesses and products around where consumer attention is, not where it’s  been. This means even car dealerships need to focus their energies differently it’s not only about leads, it never has been. Leads are a result of the conversion of consumer attention.

Car dealerships of the future

On my trip to NADA (Las Vegas) earlier last year (2019), and one of the biggest topics was the future of the car dealership. When I came back to South Africa I asked local car dealerships what the future looks like, the answers were:

  • OEMs are going to sell direct to the consumer and
  • Car buying services are going to take the trade-ins.

However, a different sentiment holds true amongst the car dealerships in the US (United States of America), where they firmly believe that the fulfilment of the car buying transaction will still happen in car dealerships.

The same thing will happen in South Africa for car dealerships. The question is: have car buying services really taken the car dealerships trade-ins? I would think that could be true only because car dealerships have given it to them on a silver platter and complained when they have taken it.

The misconception that in America OEM’s will sell directly to the public and car dealerships will close is a myth. What’s happening in America is that we are seeing less owners of car dealerships but more car dealerships. The same will more than likely happen here. Consolidation is likely, especially given our current economic and COVID-19 environment. South Africa is a car fairing nation with little public transport infrastructure. OEMs don’t have the infrastructure to go direct yet.

The future of Used Car Dealerships

This is even more the case for used car dealerships or used car departments within new car dealerships. Used car sales also dwarfs new car sales in South Africa by a factor of 2:1. There is likely also more profit in selling used cars than new cars right now with the consumer being under pressure to cut living costs in the economic environment. We should see an even bigger swing too used cars in the coming months. All this points a thriving used car dealership economy. This is why focusing on where the car buying consumer attention is, is so important alongside marketing to build a car dealership brand

Monitor your competition closely

How many of you have monitored your competition closely to see what unique offering or service you can give to your potential customers? I’ve always wondered why car dealerships in South Africa fear closing down, that there’s going to be less car dealers. In South Africa we’ve got the perfect opportunity because there’s little meaningful public transport infrastructure.

By sticking to archaic practices of conducting business means you risk losing car sales to the up and coming, less rigid car dealerships sprouting in your area.

The future of car sales in South Africa

As the world begins to move and transact online for everything else in their lives, and given where we are in the world today. We have to ask, how does this concept fit into the future of car sales? The answer –  Automotive Digital Retailing.

Similar to when you buy a pair of shoes and you order those shoes online and the shoes get delivered to you. If the car dealership in South Africa is here to stay as the place at which the deal is fulfilled. Car sales in South Africa has to follow a similar path.

Some OEM’s however have become much more innovative. BMW is a case in point, by changing their model from franchised to agency, they’ve begun the journey to selling direct. The dealership has merely become and “agent”. A change in name, but still the same function, fulfilment of the transaction.

Used car dealerships in South Africa have to innovate at dealership level however. On the local car dealerships website.

What is Automotive Digital Retailing?

Answer: Using technology to better connect digital showrooms with physical ones.

If you consider the definition of this concept, “using technology to connect digital showrooms and physical ones” in the context of what car dealerships believe to be true we find:

  • Car dealerships usually put up an advert.
  • The car dealership  website doesn’t speak to the physical showroom.
  • There’s no congruence between what the website looks and feels like with what the showroom actually looks like and feels like.
  • And then the customer goes to the online showroom on the car dealership website, pitches up with the dealers and asks, ‘am I in the right place?’

Automotive Digital Retailing is about stitching your digital and physical worlds together with a golden thread. So that when customers come to your showroom the physical world and digital world remain the same in every way, from communication to service to visual appeal.

It’s also about how you interact with the customer on your website and what you say when they walk into your showroom as you continue the conversation. You don’t start the conversation again. This means the sales person knows when that person walks in the door.

Understanding what’s happening on your car dealer websites and then having that concept and content flow into the physical dealership visit. People think that online and offline are two separate things. They are not, they need to work together.

Car Dealership finance & insurance (F&I) of the future

What do we think the future world of F&I will look like? I believe F&I of the future needs to be transparent. But the big question is:

How is car dealership F&I going to become transparent?

Answer:  By bringing the Point-of-Sale  (POS) of F&I online.

Firstly the process, the vetting and the approval needs to happen outside the car dealership i.e. online. Whether that be on a website like AutoTrader SA on the car advert itself, or on the car dealership website. Keep it simple, the customer applies for finance right there and then gets pre-approval automatically, gets his interest rate, and his monthly payment on that car.

Car dealerships who have simply put up an online capture form may think that this is online finance, it’s a good first step but, the behind the scenes backend needs automation with no human intervention right the way through to consumer approval.