The idea to write about the dealership management system market came a little more than a year ago, on the floor of the 2020 NADA Show in Las Vegas.
Days earlier, dealership technology company DealerSocket had completed its acquisition of DMS provider Auto/Mate. CDK Global CEO Brian Krzanich wrote a letter that week to his dealership customers, promising continued investment in better customer service and simplified billing. And a startup called Tekion rolled out its new DMS platform around the show, calling itself a market disrupter.
I talked with nearly every DMS provider on the show floor that week. I filled my notebook with insights to explore when I returned to Michigan. A month later, the coronavirus pandemic locked down much of the U.S. My story idea went on hold while the Automotive News team reported on the escalating crisis, from documenting state and local stay-at-home orders that often changed by the day to helping dealers understand the impact on their operations.
A year later, exploring the state of the DMS market is as relevant a topic as ever. Dealers in 2020 accelerated their use of dealership technology and digital sales processes. Many said it became necessary to quickly adapt to consumers' changing preferences, and they need technology to help them do that.
Established DMS providers have been working to improve their technology. Newcomer Tekion says its cloud-native platform delivers an Amazon-like experience. Smaller companies are investing in new products to better compete with larger providers as they look to grow. A consultant who helps dealerships with DMS conversions told me the market flux has created more choices — and more leverage — for dealerships. And DMS companies say the increased competition pushes all of them to become better.
How the market shakes out, especially as auto retailing emerges from the pandemic, will be interesting to watch.