Happy new year, readers.
The industry will contend with the same challenges it did a year ago as the calendar flips over to 2022 — namely, a coronavirus pandemic that continues to produce variants and a shortage of microchips that has slashed production of new vehicles.
While those macro conditions persist, they continue to influence auto retail. In 2020, dealerships scrambled to turn on digital sales tools and spin up concierge services for fixed ops when the pandemic shut down physical operations. In 2021, the word "omnichannel" — the technology and processes aimed at providing a seamless buying experience for consumers whether they shop online, in-store or in some combination of the two — often was at the center of conversations about digital retailing, as many dealerships refined their sales processes to give consumers more choices and convenience.
I chatted recently with several people across the industry, from dealers to consultants, about their thoughts on the trends for dealerships in 2022. Their theories include:
Online transacting will evolve, and it will be important to use technology to build trust with consumers. That could mean a continued focus on blending the online and offline shopping experiences or a transition toward a single-point-of-contact sales model, said David Kain, president of Kain Automotive, a dealership training company.
He added that consumers aren't looking for the fastest possible purchase but rather want a transparent experience in which the information the dealership provides matches their own research.
Fixed ops also may benefit from improved technology, said Rick Ricart, president of Columbus, Ohio-based Ricart Automotive Group. One area that could be top of mind? Streamlining appointment scheduling tools with other customer-facing components of the service department, such as helping customers understand what needs to be repaired and allowing them to electronically pay for the work.
Build-to-order sales models will continue, at least for now. Some automakers have dipped into their order banks to help customers find vehicles they're looking for amid a shortage of new models on dealership lots. The practice has helped buoy sales during the inventory crunch, but U.S. consumers historically have been able to purchase and drive off in a new car on the same day.
When vehicle supply improves, "will this situation really train them to be patient and wait? I don't know about that," said Michelle Krebs, executive analyst with dealership technology company Cox Automotive.
"They're doing this out of necessity right now, but will they do this long term?" she said. "We might not know the answer to it for a while."
The industry will need to stay vigilant against cyberthreats. Dealerships will need to comply with new and tighter data security and privacy requirements, from the federal Safeguards Rule to more state-level laws giving consumers more control over how their personal information is used. And dealership cybersecurity consultants have told me that hackers are getting more sophisticated in their attacks, meaning dealerships will need to stay on guard.