Dealers, what are you doing to improve your foot traffic?
In a new report from Blis looking at the state of the auto industry, data found that of all external factors, foot traffic is the only metric that dealerships can take action on to drive sales output, vs. "uncontrollable" variables such as consumer confidence. And because foot traffic patterns have proved a significant correlation to sales, it's crucial for brands to understand their competitive surrounding dynamics.
This is coming amid a potentially changing consumer environment. While the U.S. economy remains strong, the latest figures from the Bureau of Labor Statistics point toward an economy that may well be cooling. Auto brands are going to need to take a closer look at changing consumer preferences — both in terms of product and shopping. The path to purchase is evolving with each generation, and what brings consumers to dealerships today may be irrelevant in the near future. The key to navigating this new environment and competing in a dynamic car market is data.
Findings from the report revealed that by tracking visits, loyalty and crossover, auto brands can inform better strategies and campaigns that more effectively drive foot traffic into their stores. This is more important than ever — dealerships will need to act now to ensure they strengthen and maintain loyal customers leading into the post-disruption era.
The report also broke down the findings by particular auto brands and region, to help dealerships best prepare for the automotive disruption.
1. U.S.-brand dealerships are witnessing foot traffic inefficiencies.
Brands such as Ford, Chrysler and Chevy have heritage, are reliable and still enjoy the trust of the American consumer, yet American brand dealerships are at a disadvantage heading into the second half of 2019 with lower than average visits.
To capitalize on their existing infrastructure and increase foot traffic efficiency, American brands should invest in location-based marketing strategies to drive in-store visits and improve dealership results.
Interestingly, despite a higher number of stores than Japanese and German brands in the West, American dealerships have higher loyalty in every region except the West Coast, where Japanese cars won out. By arming themselves with these insights, brands can better understand how their dealerships are performing, how their customers are shopping and how to best gain a competitive advantage.
2. To hold off vulnerabilities, Japanese dealerships need to monitor foot traffic more closely.
Japanese brands including Toyota, Nissan and Honda have the benefit of high traffic in West Coast stores but are on the verge of allowing less exclusivity than is optimal.
The good news: With close monitoring and forward-thinking repositioning, they can overcome this threat. This could take the form of leaning into authenticity, creativity and behavioral disruption to compete with the Teslas of the world.
3. German-brand dealerships won out with year-over-year growth.
Brands such as Mercedes, Volkswagen and BMW are renowned for their engines, performance and being fun to drive. These dealerships strengthened loyalty across the board but should increase their number of stores on the West Coast due to the high numbers of visits and subsequent potential for consumer crossover from American and Japanese brands.
If auto brands and marketing teams are willing to put in the legwork, they can take advantage of location data to better understand foot traffic and changing consumer preferences.
By mapping loyalty, marketers can determine strengths and threats down to a neighborhood level. The average car buyer is being flooded with new alternatives and as the auto industry witnesses a shift, dealerships and marketers will need to adjust strategies to keep up.