You cannot negotiate with a storm. Once it’s upon you, it dictates to you what you have to do.
But knowing that the storm is coming means you have choices to make to prevent catastrophe. And when the weather forecaster and the umbrella salesperson work together, storms become something different altogether.
We are living in a moment of climate change in the way car dealerships operate. No, not weather-related climate change, but technology change that will force the removal of decades of layers of how you’ve sold, merchandised, and serviced vehicles.
When we talk about a dealership ecosystem, the term includes current technology systems, business processes, best practices, and personnel policies you use today to service customers. At issue is whether these things can move your business forward (in evolutionary speak) to a more robust, sustainable bionetwork.
For years, we’ve been saying that dealers must invest in technologies to digitize their entire dealership ecosystem and develop the bioculture necessary to embrace it. The alternative is to become extinct . . . and many processes have.
The industry has felt this climate change’s storm winds on its collective neck for decades now. While we’ve learned to adapt and, on many fronts, embrace digital technology, we haven’t noticed how quickly it has overcome us.
Like the frog in the proverbial pot, we’re suddenly boiling.
Now, even as some dealers resist digitization, we are moving from digitized to “widgetized.” This is where functions traditionally done at the dealer are packaged into engagements available further upstream.
An example of this is the way customers can now check their own credit and apply for financing on their smartphone, long before they physically engage with or travel to your dealership.
Dealerships are incrementally changing, while disruptive tech is rapidly and radically changing consumer options.
“While improving the process is laudable . . . such steps are hardly sufficient given the fundamental transformative dynamics reshaping the automotive industry,” says research firm Deloitte in its report “The Future of Auto Retailing, Preparing for the Evolving Mobility Ecosystem.”
“In a world of car sharing and autonomous vehicles, what experiences do consumers expect, and what are the manufacturer’s and retailer’s roles in the future ecosystem?” Deloitte asks.
Here are a few preliminary thoughts:
The Deloitte report notes, “Our conversations with dealers suggest that many are proceeding with business as usual, having yet to grasp the changes underway fully.”
Lest you feel picked on, this malaise to embrace new business ecosystems troubles all sort of industries (though that is no excuse for ours).
“That it’s taking so long is just an indication of just how hard it is for companies to change how they operate. Companies could exert a little more willpower using technology to do a better job for customers,” notes research group Forrester in its blog post“The Sorry State Of Digital Transformation In 2018.”
According to an industry survey by the firm, climate change is encroaching on many businesses:
“Embracing digital technology and business models is the only path forward in a world where customers are empowered, and disruptors rapidly exploit the friction and flaws in your market,” says CIO Magazine.
Whatever your feelings about the innovations in retail automotive, the consumer client has changed, and is forcing dealers to look hard at how to embrace the new consumer-centric future, including meeting their need for subscription vehicle services and other new transportation models.
I believe it’s hugely wrong to view the future with the perspective that a 2018 dealership ecosystem can meet tomorrow’s consumer shopping dynamics, needs, delivery systems, models, and structures. Blockbuster Video made plans based on its current weather and ignored the forcast about storms ahead known as Netflix—which is now valued at more than Disney.
You know this, intuitively. Good leaders holding onto reality will push themselves and their teams to grow into—and prosper—in a retailing world that presents many ideas much different from those we know and love today.
Dealers obsessed with customer engagement have an edge here, because they’re focused now—and have been for some time—on exploring and embracing new retail automotive ecosystems. They’re reading consumers’ signs at many points along their shopping journey, and are leveraging technology to reach them deeper in the sales funnel.
Doing so, they are nurturing relationships that have the most potential for culminating in a customer for life.
The digital, end-to-end ecosystem at the core of this new business model pampers prospects, builds trust with them, and demonstrates and delivers convenience.
They’re pulling consumers into the buying experience using augmented and virtual reality tools, interactive and online consumer transportation-lifestyle surveys, and via these platforms, are enabling customers to interact with every department in the dealership.
The new dealership ecosystem is entirely digital: a seamless and radiating web of access, knowledge, transactionality, real-time information, and reporting.
Now’s the time to heed the warning signs, to be ready to make leadership decisions required to disrupt your ecosystem status quo, and to move quickly to position your dealership for tomorrow’s customer climate.
As Forrester notes, “Fearless transformation takes careful, deliberate strategy, and it begins with customer obsession.”
 Ted Schadler, Vice President, Principal Analyst, “The Sorry State Of Digital Transformation In 2018,” blog, April 24, 2018, https://go.forrester.com/blogs/the-sorry-state-of-digital-transformation-in-2018/
 Clint Boulton, Senior Writer, citing quote from Forrester Research analyst Ted Schadler, CIO magazine, “Why digital transformations are lagging,” May 21, 2018, https://www.cio.com/article/3274447/digital-transformation/why-digital-transformations-are-lagging.html
 Sucharita Kodali, Vice President, Principal Analyst, “Will Your Company’s Digital Transformation End Up As A Bold Decision Or A Bust?”, Forrester blog, April 30, 2018, https://go.forrester.com/blogs/will-your-companys-digital-transformation-end-up-as-a-bold-decision-or-a-bust/
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