Tinker Hatfield is famous among sneaker enthusiasts; his engineering work for Nike revolutionized movement, running, and athletic performance. Comparing the sneakers of the past to his radical Air Jordan design is a lesson in the way futuristic thinking and innovative technologies improve fundamental behaviors and activities, like running.
When you consider everything required of you to run your dealership, you’re either running in place—or running to win by embracing the future. If you’re dreading the virtual dealership, you may not have noticed the sun setting on your own empire.
Customer engagement and the reality of virtual car sales are now proven, practical, and profitable for those running to win. Disruptive technology has taken root, and dealers examining their fundamental behaviors with an innovative lens are going to have an advantage.
This isn’t just me saying this. Futurist Jim Carroll, in a 2015 speech, “25 Trends for 2025,” summed up some interesting insights:
- In 2005, Facebook was used mostly by college students.
- Google Maps was brand new.
- Twitter didn’t exist yet.
- Autonomous vehicles weren’t on most people’s horizons, and drones were still bees.
“And as always,” Carroll said, “Most people weren’t really thinking about the future in 2005, and thinking how different 2015 might be. Thinking about the future is not the job of most people. The result is that most predictions about the future are often treated as ridiculous, comical, or viewed as based on too much science fiction.”
In its “2020 Report: Twenty Trends That Will Shape the Next Decade,” Intuit predicted, “The balance of power will shift from the business to the marketplace as customers grow more informed about products and services. With this shift from ‘push’ to ‘pull’ marketing, companies won’t find customers, their customers will find them.”
The report added, “The use of social and mobile networks and technologies will possess greater utility . . . business[es] will be redefined in how they create value and compete and will help consumers . . . anticipate and guide decision making and risk management.”
How connected are you?
How you cope and thrive in the car business over the next decade will challenge the best—but isn’t chaos the medium in which car dealers excel? For some, yes—those who plan and invest now to flow with the changes that various influences and demographics are driving.
The future is different, and is now: Subscription transportation services, ridesharing, and autonomous pods. Fewer customers and fewer sales. A business where 90% of car buyers transact and complete the deal online, with little or no human interaction. Downsized showrooms, chatbots, and virtual reality. A service department transformed by vehicles driven by electricity, fewer parts to repair or replace, fewer oil changes, and less routine maintenance.
Dorothy, we’re not in Kansas anymore.
Innovators who entered the automotive business without having to unlearn legacy processes are creating the disruptive practices that we have to contend with or assimilate to. Until we realize this, the showroom will continue to operate as it has.
Some customers will still prefer to touch the metal and enjoy the new-car smell, sit with a sales associate to work the deal, visit F&I for finance and lease options, and hear aftermarket presentations void of depth and conviction. The day-to-day pace of change may seem nonexistent at a micro-level like this. Soon, however, we’ll be reminiscing about the “old days” (even 2018) when there was an entire office dedicated to F&I.
A virtual showroom will replace the physical one, with just enough square footage for a real model or two for those who still want to touch and test drive. Most consumers will prefer to shop and buy online, taking test drives using multisensory VR devices from their living rooms.
Perhaps they’ll sign the deal with a touch of a thumbprint to a smartphone-like device attached to their wrist. The vehicle may even drive itself to their residence.
Autotrader recently announced a significant upgrade to its platform, adding online deal-making functionality. That sounds like big news, but is it? Pundits have predicted that online car buying would be a reality by 2019, and vendors have been getting dealers ready by promoting digital, online, and in-store consumer-engagement tools to target buyers by lifestyle, interests, and needs.
In a 2015 article in this magazine, I listed several actions to help dealers get ready for their future. Here is an updated list: How many have you embraced?
- Disrupt. Now’s the time to disrupt the status quo. Can customers engage with and buy from your dealership without stepping into your showroom? Are your finance and aftermarket options incorporated into the deal flow, beginning online and up-funnel, or are customers still required to hang around another 60 to 90 minutes in a 10-by-10 office?
- Learn. Leverage the technology and talent behind vendors. Take advantage of what they offer so you can fight margin compression more successfully—and so you deliver a seamless and engaging experience, online and in the showroom.
- Develop. Train, train, and train some more. Create experts to maximize the productivity tools you now have. Develop product experts for your vehicles and your aftermarket products. Train your specialists to ask the questions that deliver the products’ value stories that customers need to hear.
- Embrace. I’m amazed how many dealerships still use old F&I techniques and paperwork when studies show they cost opportunities and money. Bring your dealership up to current best practices by incorporating e-menu, e-rating, e-contracting, and e-registration into your F&I. Stop using paper-based processes that consumers find slow, old-fashioned, and even untrustworthy. Replace them with digital presentation tools like tablets, kiosks, and pads that let consumers interact with and control the product presentation and selection process, and affix a digital signature. Technology provides a more compliant F&I process that consumers appreciate, and increases profitability through improved PVR and product penetration.
Just as Nike set out to transform human performance with Tinker Hatfield’s disruptive technology, innovative F&I services, connected experiences, and intelligent tools are creating new consumer behaviors and taking automotive retail beyond today’s boundaries.
Run, don’t walk, if you want to stay in the race.
Jim Maxim, Jr. is president of MaximTrak, a RouteOne company, and chief digital officer for RouteOne, a provider of digital F&I platforms for dealers. He is an F&I visionary recognized by CIO Review magazine, a frequent panelist and speaker at various F&I conferences and summits, and a contributor to automotive retail media about evolving F&I technologies. Reach him at [email protected].
From 2003 to 2019, he helmed MaximTrak, a digital F&I platform, which he founded and sold to RouteOne LLC in 2016. Until late 2019, he continued aspresident of MaximTrak and as chief digital officer for RouteOne, bringing to market solutions trusted by dealers around the world.
Jim is widely regarded as a thought leader in business technologies and wealth-building strategies for entrepreneurs and F o rtune 500 companies alike.
He is a graduate of the Babson F.W. Olin Graduate School of Business of Babson College, Babson Park, MA. He is married, with two children.
Latest posts by Jim Maxim, Jr.
- Plan, People and Profitability: A Lesson in Chicken - January 12, 2020
- Digitize Your Dealership Operations Now to Be Ready for 2020—and Beyond - October 12, 2018
- Fintechs: Are They Creating New Revenue Streams, or Siphoning Existing Ones? - September 25, 2018