The Pandemic Drove a Great Leap Forward in Digital Retailing Adoption Part 1: How the Pandemic Changed Sales Operations – and Accelerated Digital Retail Adoption
It was perhaps the most extraordinary time that any of us will ever live through – 9/11 notwithstanding. At the start of the second quarter of 2020, everything – absolutely everything – just stopped. Car buyers on lockdown. Dealerships closed. People forced to stay home. After a solid start to the year, it was as if a locomotive engineer threw the emergency brake…just when the sales train was picking up speed. The result was, understandably, devastating for many in the business. Yet the resulting shock and disarray, then the resilient rebound, showed just how tough the automotive space is when tested. Still, we went through an experience that changed just about every aspect of dealer operations – and we wanted to get a better idea about what really did change in terms of sales and digital retail acceptance. So we surveyed dealers about how the pandemic impacted their sales operations. The answers were surprising, and may help chart a way forward for how dealers integrate digital retailing into their in-store processes.
How did COVID-19 change sales operations?
At the start of 2020, experts were telling the world that U.S. auto sales would possibly be down…but would remain robust. Then COVID-19 hit, and sales immediately fell around 30% in March – and even farther in April. In fact, at the time, J.D. Power predicted that sales would drop 80% thanks to stay-at-home orders and the overall COVID-19 impact. It got so bad that approximately 25 states had partial or complete bans on automotive sales. So – how did dealers survive? According to our survey, many pivoted to other methods, embracing digital retailing extensively and finding ways to sell cars in a contact-free environment. When we asked dealers what type of impact the pandemic – at its early height – had on their sales operations, some (17%) were forced to completely shut down. Around two-thirds said that they were able to stay open through a combination of appointment setting and remote deliveries. All, of course, were impacted, but the resilience of dealers and dealership employees kept lights on and stores open. That ability to survive and adapt meant that dealerships have been positioned to thrive: nine months after the pandemic hit, the vast majority of auto dealerships — 73% — reported both open showrooms and remote deliveries.
Ch-ch-change: Surviving the Pandemic Meant Embracing Digital Retail – Now and Permanently
Hindsight is always great – especially when looking back at last spring’s “pandemic pause.” With sales steadily increasing since the pandemic hit, our survey found that one of the biggest changes to the retail space was its embrace and acceleration of digital tools. According to our survey, 78% of auto dealers said that the pandemic accelerated their adoption of digital path-to-purchase experiences – and a whopping 90% say they expect to continue, or accelerate, digital retailing at their dealership. Only 10% will pull back on the implementation as life goes back to “normal.” It’s a clear sign that COVID-19 didn’t stop automotive retail – but it did force change in terms of digital adoption – a shift in business that looks to be permanent.
Mindsets About Digital Retailing Shifting
While the pandemic motivated many dealers to accept and accelerate digital retailing as their ‘new normal’, it also began to shift perception of the technology. Where before, a majority of dealers looked at digital retailing as an advanced lead generation tool, our survey found that in the aftermath of the pandemic, more were now seeing its deal-making potential. Over half (53%) see digital retailing as deal generation, i.e., ‘the start of the deal.’ This is amongst the more extraordinary findings in the survey: without the driving force of the pandemic, getting to over 50% of auto dealers viewing digital retailing as ‘deal’ versus ‘lead’ generation would have taken much longer. The pandemic didn’t beat the automotive business. Far from it. But it did force positive change that will in part reshape the way we sell cars moving forward. In part two, of the Pandemic Drove a Great Leap Forward in Digital Retailing Adoption, we’ll take a look at the results of this increase in digital retailing adoption.
Author: Pete Maclnnis
Author Bio: Pete brings over 40 years of experience in automotive finance and technology as Founder and CEO of eLEND Solutions™. Founded in 2003 as DealerCentric, Pete is leading the company’s evolution to an automotive FinTech company that specializes in digital credit and finance solutions designed to create a more efficient vehicle purchase process for the retail automotive industry.
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