The Analysis Comment
‘It is time to re-engineer the car-retailing model’
An online model has been thrust upon the industry, but may also prove a more successful strategy in the long term
Mark Standish Chief executive, MotoNovo
COVID-19 has been tough for the dealer community, but looking at things more optimistically, it can be the catalyst for positive change. It is time for dealers to seize the initiative, re-engineer their businesses and get closer to customers, radically cutting out the middle-people in the car distribution chain that has added friction and cost to customers’ buying experiences.
Controllable Central to this thinking are five ‘controllable’ areas across the supply chain that every dealer can assess and control: l Used vehicle stock – determining who and if third-parties can leverage its value. l Customers’ online journeys – from aggregators and lead suppliers to internal contact processes what is the online customer experience and what areas of friction can be removed or reduced? l Digital capabilities – how can you improve in-house skills and leverage support from your suppliers to create a richer, online customer experience of dealership, services, culture, and expertise and enhance the quality of vehicle information? l Costs – think how to become leaner and reduce costs permanently. l Supplier review – are key relationships centred on collaboration; are suppliers adding value (or taking it) both in their core areas of expertise and in adding capabilities in areas such as digital expertise?
A watershed The challenges thrown up by COVID-19 can prove to be a decisive watershed moment for car retailers. The shift towards digital car buying model has been testing for many dealers; profitability and
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critical customer relationships have been eroded by a series of online businesses placing themselves between the dealer and car buyer. It has been neither deliberate or rapid, but, as the saying goes; ‘dripping water will erode an entire mountain, possibly without the mountain noticing.’ It is time for dealers to take out costs and
competition and make digitisation work for them and their customers. The rationale to get closer to customers
It is time for dealers to seize the initiative, re-engineer their businesses and get closer to customers, radically cutting out the middle-people in the car distribution chain that has added friction and cost to customers’ buying experience
and reduce marketing costs was behind the launch of findandfundmycar in 2018. Through the lock-down, the consciously dealer-centric used car marketplace has come of age. Dealer and stock numbers have risen notably as is the time customers are spending on the site which, has undergone a full revamp this year.
Network effect Dealers have an opportunity right now to establish the ‘network effect’ of a dealer-led marketplace platform. The co-operative appeal of
findandfundmycar.com has always been clear and it has enjoyed sustained and steady growth, but if dealers want to free themselves of cost, competition for F&I services and get closer to customers now can
be the right time, right place. As a long-term dealer-centric business we pride ourselves on
helping the dealer community. Right now, I am very aware of the pressure on dealers, but I do not believe the way forward is to ‘do what we have always done.’ Now, is the time for dealers to assess how to re-engineer the car
retailing model, cut costs and gain greater control of their businesses and customers. CCR
www.CCRMagazine.com June 2020
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