Notable Trends at NADA 2022
It was great to be back at NADA in Las Vegas this year. Although we got a lot done during last year’s virtual event, conversations we were able to have with colleagues in person were more informative and even more exciting than we expected. Plus, getting to see the latest technology and services for the retail automotive industry up close was nothing less than inspiring. This year’s show certainly delivered.
Always looking for ways to elevate the car buying experience, we were part of much talk on the show floor centered around making the process easier and more convenient for our customers. After all, the key to driving growth is to always serve the buyers and their needs — whenever and wherever they are.
The shifting landscape requires that we help dealers transition from digital to physical workflows by creating and sharing technology that shortens the buying experience. In the very near future, fewer staff (and there are already fewer salespeople now, from 17 to 15 on average) will be able to sell the same number of cars while delivering Amazon-like customer convenience.
Here are five big trends to keep an eye on:
Productive Sales Processes
Market shifts — like the shortage of inventory and the rise in consumer expectations about shopping for everything from home — have many dealers rethinking their sales process. This is confirmed by the recent CDK Global Automotive Retail Friction Point Report, which found that 94% of the 303 dealers surveyed are doing just that. When you consider that the majority of cars sold today are virtual or pipeline transactions, it’s evident that consumers are becoming more comfortable ordering in-demand vehicles from the factory and putting down a deposit on vehicles in transit.
It’s a modern buying approach that demands a modern sales response. Digital retailing tools integrated with the CRM and DMS are a great place to start. When using information consumers provide from home, along with lead management tools like customized email templates for personal communications, Sales can provide a better customer experience while doing more in less time.
One of the biggest frustrations among dealers is that the systems they use to transact do not seamlessly transfer data, which creates process inefficiencies. A number of dealers at the show complained about having to open 10 different screens to complete just one deal. This is a major source of friction for dealerships’ variable operations teams. Look for a big push from vendors toward unifying systems and implementing single sign-on applications.
Delivering a great customer experience continues to be a main focus for dealers. Everyone wants to provide Amazon-like customer convenience while maintaining a personal relationship with the customer. But the biggest hurdle continues to be the F&I process, as revealed by the CDK Global Automotive Retail Friction Point Report: 61% of the 1,113 consumers surveyed reported waiting alone — for over 30 minutes — before an F&I Manager returned to finish their sale.
F&I Managers play a vital role in profitability, but what are the long-term costs to a dealership if the F&I process results in a poor consumer experience and low CSI scores? To help speed things up, much of the paperwork for a deal can now be done online, all the way down to the digital signatures. And it’s what modern consumers expect. So, look for more dealers to adopt digital retailing solutions that move data seamlessly from online to in-store and significantly enhance the buying experience.
It seems like every technology provider is working on AI-powered products. We’re already seeing it in virtual assistants who answer customer calls 24/7. Keep an eye out for further advancements, especially in the Service department. Expect AI-fueled prognostics that will allow vehicles to detect an issue before it occurs and transmit that data to the Service team. Another exciting development in Service is data mining that can identify trends in parts failures and transmit that info to Technicians, who can perform preventive maintenance that will save your customers time, money and aggravation.
The arrival of electric vehicles (EVs) and how dealers can prepare to sell and service them was the last big trend that buzzed through conversations across the show floor. Many large, franchised dealers are well-positioned to sell, service and educate consumers on EVs. But smaller dealerships will have to carefully consider the pros and cons as investments in employee training, charging stations and service equipment are substantial.
While technology is a significant driver in making the car buying process faster, easier and more convenient, the main theme of NADA 2022 was that we still need to put the consumer first. So, keep your eyes open for positive ways to impact your operations and enhance the buying experience. Your customers and your salespeople will thank you!