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Connected Television Represents A Great Disruptive Opportunity for Dealers

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It is estimated that 39% of adults are watching video on a CTV device on a daily basis. This is up from 31% back in 2019 according to  data  from Leichtman Research Group (LRG)1. This represents a large audience with spending power and the desire to shop for a vehicle. As a result, dealerships are taking a closer look at the connected television medium because of who is viewing CTV, as well as how often, not just the overall households.  The increase in CTV also represents a disruptive leveling of the playing field for advertisers who historically have purchased traditional TV, and those who could not previously afford it due to budget constraints or efficiency concerns.  The programmatic targeting capabilities of CTV allows for large advertisers to buy more efficiently through diversification of their media mix and better data fidelity in their audience reach. It also allows smaller or more niche advertisers an opportunity to advertise in front of larger audiences on television without the high cost and ad waste associated with traditional media buys. Creating greater efficiencies The decision for auto retailers and their advertising agency partners to consider CTV is less about re-allocating digital media budgets to video, which most dealers already execute through programmatic and social video campaigns.  Furthermore, dealers should not entirely abandon their traditional media buys and budgets, either. However, in many cases those dealers that begin to explore a reallocation of portions of their traditional media investments over to CTV see significant improvement in the performance of their overall media mix and experience a positive impact on their cost per unit sold and serviced.  Increases in target markets The first CTV benefit is scale, where dealers can leverage large programming opportunities and access across major recognizable logos that has strong coverage across networks and devices. Secondly, dealers and their partners in CTV are continuously working to understand the market penetration they are gaining or losing, and have access to unique data technology to ensure campaigns are on par with the reach of top cable providers. These partners also offer dealers access to digital media purchase technology that leverages a Demand Side Platform (DSP), which is software that allows media buyers to buy each impression based on whether the viewer meets their audience parameters. They can also help ensure ad content is not played along side or in tandem with violence or other sensitive subjects that would be detrimental to a dealer’s overall brand values. Driving greater bottom-line results While all of this sounds promising, results are what matters. One mid-size regional dealer in Florida recently tested an Amazon DSP against other traditional media platforms and ran a two-week CTV campaign, directed to in-market shoppers on FireTV, within their store’s PMA. Their campaign measured correlative metrics holistically against all digital media channels including search, fixed ops, social, sales, and ROs. The dealer saw significant gains in performance across every measured metric when looking both at period-over-period and month-over-month. Furthermore, to test the fidelity of the data, they also measured key metrics when the campaign was terminated and saw almost a 15% decline in impressions and clicks in search, coupled with a distinct drop in shopper engagement on the website. This included a +57% increase in sales, +17% increase in closed ROs, and a +16% month-over-month increase in dealership revenue, according to data from PureCars. Dealers are naturally hesitant to jump into the CTV pool all at once. However, with the results from this dealer’s trial along with the ongoing growth of the CTV category, this disruptive platform will continue to grow as a viable alternative providing a competitive edge to those dealers that explore their options early on.   1:  https://www.leichtmanresearch.com/39-of-adults-watch-video-via-a-connected-tv-device-daily/
connected car
Connected Car Helps Drive Automotive Retail Consolidation

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Automotive Retail is Consolidating It’s no secret that significant consolidation of automotive retail is underway. Every week, Automotive News reports additional acquisitions by the leading retail consolidators. Earlier this year, Automotive News reported that the consolidation trend has continued steadily over the past 10 years – even through the pandemic. At the end of 2020, the Top 150 Dealer Groups owned 21% of all dealership locations and represented 23% of industry sales volume. This is up from 13% of locations and 16% of volume ten years earlier.   The need for significant technology investments is one driver of consolidation. Smaller dealers are faced with large investments to enable digital retailing to meet customer expectations. Dealers are also facing new investments in electrification technology to accommodate the industry shift to EVs. And some dealers are choosing to sell rather than make the investments. For example, approximately 20% of Cadillac dealers are reported to be walking away from their franchises, rather than make required investments in selling and servicing Electric Vehicles.   Tesla’s Retail Approach Shows What is Possible Tesla’s retail network shows that technology can not only be a driver of consolidation, but also an enabler. Tesla has fewer than 200 Sales Galleries and fewer than 150 Service locations. Connected Car technology is one of the keys that makes it possible for Tesla to service its customers with so few facilities. On the sales side, Tesla enables comprehensive on-line shopping. In service, Tesla says that it can accurately diagnose 90% of all issues remotely and that it can repair 80% of problems without a visit to a service center. Connected Car technology makes this possible by allowing Tesla to remotely connect to its vehicles for diagnosis and for ongoing insights into real-world customer usage. Tesla can also determine the customer’s location if it needs to dispatch a remote repair and Tesla can often repair vehicles with an over-the-air software update. It is safe to say that Connected Car technology is the only way that Tesla could operate with so few physical locations. As this technology becomes more widely used by all OEM’s, there will be growing opportunities for other OEMs to consolidate sales and service facilities. Lessons from the Pandemic and the Chip Shortage Both the pandemic and the chip shortage have accelerated trends toward digital retailing and reduced inventories. As reported in Car and Driver , Ford has concluded that the pandemic accelerated customer interest in shopping and ordering vehicles on line. Many dealers successfully responded by offering at-home test drives and deliveries. A build-to-order mindset for consumers has been further accelerated by the chip shortage, which has made it difficult for dealers to hold inventory and for customers to shop from inventory on the dealer’s lot.   Connected Car Technology Will Enable Further Consolidation Connected Car technology will further enable the trends toward retail consolidation and digital retailing. As Tesla has demonstrated, a well-connected OEM and Dealer network can easily provide remote sales and service to customers without needing so much real estate. As customers become more comfortable with online ordering and remote service, the most successful dealers will be those who make the best use of technology to serve customer needs.   We will soon see dealers making extensive use of Connected Car tech in their sales and service operations. For example: In Sales, vehicles can be made available for any-time test drives and parked inaccessible locations. Vehicles can be electronically disabled to prevent theft and only enabled for prospects with a valid authorization code. Also in Sales, a limited test drive can be extended to a short- or longer-term rental, with data collected to make effective suggestions to the customer for a customized vehicle, accessories, and software. In-Service, ongoing monitoring of vehicles will create increasingly sophisticated predictive models. These will allow Dealers to contact customers long before a failure occurs and offer either a physical repair or a software update. Also in Service, Dealers can monitor vehicle diagnostics trends, and can proactively schedule vehicle maintenance to be done at a time that is most convenient for the customer and also the most efficient for the dealer. The bottom-line result will be continued consolidation and more efficient use of real estate to meet the needs of automotive shoppers and owners. 
This Is How Automotive Retail is Transforming

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In the earliest of days, weeks, and even months for auto dealerships returning to business (open doors at the facility), we are getting some encouraging early indications of leads being a decent volume, retail sales bouncing back a bit, and revenue and profit returning to levels of operational survival. At least that seems to be the narrative. Inventory depending on the brand and model can be challenging, but nonetheless, a fairly good bounce back from the days of March through May, by most indications. As being reported by Ward's and others, June auto sales will defy bragging about compared to year-over-year and by expected standards, but at least they're on an upward trend. July retail deliveries aren't expected to set off firecrackers either, and fleet sales with the rental agency bankruptcy and economic woes deflate total volume as well.   On a yearly forecasted perspective, there is some upwardly hope as well. Wards Intelligence expects June's seasonally adjusted annual rate to total 12.9 million units  (See chart below).  That compares with May's 12.2 million and April's awful 8.7 million. Moreover, it is well below June 2019's 17.2 million-unit SAAR and the 16.8 million deliveries that were predicted, pre-pandemic, for 2020. Yes, unemployment and production start-up and interruptions, consumer confidence, the pandemic, and fears of normalcy all weigh in on this. But are we looking at the right figures and metrics to see what is really happening?   Are we even evaluating the right measures?   I would also argue that we will have to shift, and in fact, transform the very way in which we both "sell" cars and evaluate the industry as a whole. While some indicators may not be entirely easy to quantify, there are new measures and KPI's that we must start considering, and in fact running our retail business by and guiding our new business practices and operations towards. Some examples of the new metrics that I believe will 1) drive survival through this crisis, and 2) transform your retail business into a next normal thriver, include: Now I am not going to suggest we throw out the old standard measures, but in order to transform, in order to think differently, we must establish new targets and metrics. These new measures will keep us focused on what the needs of consumers are and will be and how we fulfill them. In order to accomplish an auto retail industry and business transformation, I believe there are four major components (or capabilities) to consider: 1. Not vehicle sales, but vehicle usage The industry analysts, OEMs, captives and banks, third party retail portals, and certainly dealers must all monitor shifts to measuring and supporting vehicle usage over vehicle sales. I won't go into a ton of detail why the world of vehicle sales, vehicle needs, and vehicle mobility has been disrupted forever, but I think most of us realize it has. What we knew as daily work and social commutes, weekend get-aways, road trips, and all of our life is under dramatic shift and unknown future. What will be constant is our need for mobility when we want, how we want, and where we want.   This provides both a challenge and an opportunity for auto retailers. How do I support the market for people to gain access or usage of a vehicle, and provide the product, the service, and/or the experience to do so and make it a profitable endeavor for my business? In fact, how may that actually become the guidepost for my business of the future? Dealers (and OEMs and financial institutions) will need to redefine what success looks like and how it can be profitable. It will have to include the idea and strategy and measurement of providing access to vehicles, and not just the transaction of vehicles. This may or may not include versions of providing fleet and rental, subscription or license options, car sharing and car riding, new flexible lease and mileage options, other vehicle and service options like electric charging, vehicle and fleet disinfecting, pick up and drop off (not just to the dealership but as a more mobile customer journey service), and much more that will be supportive of overall customer vehicle usage and customer mobility. That is the target for future success. 2. Focus on customer experience The idea and practice of customer experience are certainly not new, but it did take on a magnified focus with the pandemic crisis shifting how many people interacted and expected any retail business to operate and accommodate. I even wrote about "experience" needs to be the North Star for an organization. It should be the ultimate goal, and the functional operations and capabilities need to be transformed and configured to deliver upon it. Customer experience and fulfilling customer expectations will be the very thing that defines the auto retail industry of the future as we work through this shifting landscape.   In auto retail, this is even more of an imperative. Consumers are now more than ever walking from one industry and one experience to the next, expecting a certain standard. We must follow the customer's lead. How can we serve them and empathize with their journey and daily life and intersect in a meaningful and valuable way? This absolutely means pick-up, drop-off, driveway delivery, "no touch" servicing, mobile service, omni-channel and preferred channel access, and support for their mobility needs. It will mean even more yet to be determined. The customers are telling us what they want and need. The key is, are we listening?   Be sure to listen. Apply your own experiences and expectations of other organizations and industries. Start by supporting customer empathy and customer experience, and you will find the revenue and opportunities from it. Customers will pay for better experiences. 3. Don't simply digitize current processes This is a pitfall too many businesses and too many dealers fall into. If I just add technology, it will help, and things will get better. The technology is then either not adopted, does not work well with the current business operation, and overcomplicates and becomes cumbersome for the users. Digital change ultimately comes through People + Process + Technology. But process is first! Understand what the goals are, the North Star of customer and employee experience, and then make sure all processes are focused on delivering value to that end. If the process is not aimed at value for the customer or employee experience, it is simply adding unproductive and unsatisfactory work and noise. A lot of current dealership processes need to change. It is great we have added more online selling and scheduling tools. But the workflows and processes need to support an efficient value-add process. There is no reason after conducting a majority of a sales process online that a customer should have to be at a dealership for, on average 3.5 hours to finish paperwork and take delivery. There is just not! It is the number one dissatisfaction with the car buying process and is just one of many that need to change. I can buy and sign for a house in less time. Before any technology is ever implemented or added, make sure to consider and re-design the processes it will support. It is your opportunity for transformation. It is the best chance to advance and leapfrog ahead of a current state. 4. Become flexible, agile, transformative Inherent in all of the above components and capabilities is the core principle to be agile and flexible. What does that mean? It means don't do business as usual. It means you may have to get uncomfortable. It means you may have to pivot and shift from a plan or previous strategy based on results and feedback and customer interest. Your transformation strategy and plan should be a living guidepost. One that can be altered and changed to adapt to conditions and opportunities. To be agile, flexible and transformative is an actual capability; and probably the most valuable one. It will allow you to not get stuck chasing decaying margins or performing tasks that are not valuable. A lot of insight and direction will come from your data, the old and new measures suggested your customers and a general sense of the business opportunities. Listen for it! Be agile, flexible, and humble enough to follow it. This is not an overnight challenge or change. What I am suggesting is that life as we know it has changed. How we interact with retail has changed. How we use our vehicles or need mobility has changed. All has changed at least for quite a while, and some like the raised customer expectations have changed forever. So, let's understand those factors before we simply try to optimize some already archaic retail processes. We must measure factors that are the real evaluation of what is happening with mobility, vehicle usage and access as well as customer mobility expectations. Those measurements are where we need to drive our future business to operate and perform. Those will indicate new capabilities an auto retailer must develop to keep evolving and transforming to a future state of what's next and what's successful. Start with a North Star guide of what you want to deliver as an experience to customers and to employees. From there, create a plan and roadmap to build towards the capabilities necessary to deliver upon it; the people, process and technology. But always be agile, adaptive and flexible. Listen, pivot as needed, and pursue the customer experience. That will lead auto retailing through this crisis and into a new era of high value, high engagement and high satisfaction retailing experiences.
The Pandemic's Ripple Effect: AI Marketing Tech Trumps Traditional Marketing Agencies

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With millions of consumers turning exclusively online in the recent months, dealerships were forced to acknowledge their aging digital infrastructure.  Outdated solutions, like traditional marketing agencies, simply didn’t cut it anymore. And for dealers, relying on intuition, and ‘what worked last month’ quickly became a thing of the past. While many dealerships rushed to implement new solutions to bring in “online” buyers, we saw that dealerships who stayed resilient-- or recovered quickly-- were ones that adopted automated technologies. In such a dynamic, unpredictable market, humans can’t respond to the way machines can.  As COVID-19 accelerated dealer-tech adoption, including digital retailing and beyond, the industry was given a unique opportunity: witness how automated software will react to unprecedented customer behavior. What will machine-driven learning understand from the new normal? What will it change, and how will it optimize to outperform humans in this ever-challenging reality?  With millions of additional  eyes on the screen , and a government-mandated lockdown, what would you expect the AI to do?  Here’s what we found Since the start of COVID-19 lockdowns, consumers naturally paused previous efforts to limit their time spent on social media apps. Social media consumption increased from 20.8% of total app usage (Jan 1) to 24.1% (Apr 12). Combined with a  21% increase  in total global usage, social media advertising has become more cost-efficient. For dealerships, this was translated into more clicks from social ads specifically.  Digging deeper into automated marketing results, we looked specifically at  Acquire , an automated SEM that leverages thousands of data points to strategically place ads across social, search, and display. As you would imagine, Acquire automatically shifted budget toward social channels as the machine learned that’s where shoppers were spending their time.  From February and March to April and May,  conversion rates on social media increased by 34%, and new users increased by 37%.  Meanwhile, the proportion of dealership budgets allocated towards social advertising (as opposed to search) nearly doubled. Below is an example of a northeastern automotive group that adopted automated technology for marketing before COVID-19 outbreak. While this group did lower overall advertising spend as a response to the economic downfall, the technology helped the dealer stay resilient and steadily increase leads from March to May, despite the pandemic. The graphs show a drastic shift in the budget from search to social and a steady lead haul, regardless of the overall budget decrease.  Here’s our consensus - and why you should hop onboard... As the market drastically changed, automation was able to respond instantly, with no lag time,  something that does not happen as quickly when using traditional, manual marketing methods.  With more budget dedicated to cost-efficient social media advertising, dealerships were able to identify and target shoppers where they were spending their time at home, resulting in  more leads at a lower cost. Because of the robust machine learning capabilities, this automated solution automatically adapted to consumer behavior changes in ways that humans  simply cannot.   From the data it’s clear - dealers will have to ditch the manual labor and instead become agile marketers by adopting top-tier automated solutions that will keep up with the changing environments - helping you beat out the competition at any given moment. For the full data report, please visit  here . 
Everyone Wins With A Seamless (Online And In-Store) Experience

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Think about the last time you experienced a retailer with a digital experience that seamlessly connected to the in-store experience. Maybe it was as simple as opting to pick up a purchase in-store, rather than having it shipped to your home. Or, it could be that you saw a product at one of the retailer’s locations but waited until you got home to research and make the purchase. Do any retail experiences like this come to mind? Now think about the digital experience your dealership provides car buyers — does your in-store experience connect online? Does your in-store pricing match or differ from your online inventory? Imagine finding a different price for coffee on the Starbucks app than what you find in-store. Everyone, from coffee drinkers to car buyers, cares about a seamless, efficient and pleasant experience, no matter how big or small the purchase. Connected experiences drive customer satisfaction In a recent survey , we learned that almost 50% of consumers find increased satisfaction when provided with a seamless experience in-store and online. When asked which retailers provide the best experience they answered: Walmart , Apple , Best Buy and Target . What’s the common thread? Each of these retailers allows for an easy, transparent shopping experience that fits individual shopper lifestyles wherever they are. Black Friday 2019 is a perfect example -- shoppers clicked and thumbed their way through 20% more online sales than 2018 (a record-breaking $7.4B) while in-store sales dropped by 6.2% and foot traffic down by 2.1% . Walmart’s dedication to the customer experience is evident with its entry into the grocery business, which ranked as the #1 Best Overall Customer Experience, according to the survey. Customers are able to start shopping from their website or mobile app and have their order delivered for free the next day or pick it up in-store. During Black Friday 2019, we can see the impact of their and other retailers’ efforts. Reports showed that 65% of online shoppers made purchases with their phones , but chose in-store pick-up 43% more of the time than 2018. Shoppers want to make the purchase when it’s convenient for them, but are willing to visit the store to ensure what they bought is what they’ll get. The above retailers have Net Promoter Scores that average around +70 (on a scale of -100 to +100), while the auto industry averages around +39 1 . Dealerships are not providing the worst experience by any stretch of the imagination, but what we’re finding is that shoppers are coming to expect similar research and purchase experiences at a dealership that they might get with other retailers. After implementing Roadster’s Express Storefront , which connects online and in-store experiences, we’ve found our dealer partners average a Net Promoter Score of +83. 1 Temkin Group NPS Benchmark Study, 2018 Build relationships to grow loyalty Another key learning from the survey is more exclusive to the automotive industry and a more human one. When asked what they would change to improve the car buying experience, the top choice among respondents was to work with one salesperson from start to finish. For the first time, a “one salesperson” approach beat out transparent pricing and inventory selection. This means the person who reaches out when the initial lead comes in is also the same person who hands over the keys at the end of the deal. It may seem like a big ask for a salesperson to drive every step of the sale (including F&I), but systems like Roadster’s Express Storefront are built to empower salespeople with all of the information they need to complete the transaction while ensuring profitability for the store. This approach also allows managers to get out from behind the desk to focus on higher-level tasks such as early customer introductions and coaching the front-line sales team. Shoppers are willing to pay more for a better experience Consumers are increasingly expecting their shopping experiences to fit into their individual lifestyles, and 80% say they’re willing to pay up 10% more for it. Some people want to go to the store, others want to research and buy in the privacy of their own home. At the same time, car buyers still want someone nearby to guide and move the sale along. It is time to close the gap between online and in-store experiences at the dealership. We can embrace tools that empower car buyers to define their own shopping experience and, at the same time, connect them to onsite salespeople to answer questions, discuss products, and ultimately build long-term relationships that benefit both the buyer and dealership. The technology can get you started but it’s your process and culture changes that will bring it home. Methodology: Between July 11-17th, 2019, we surveyed, in partnership with Survata , over a thousand weekly shoppers who do their purchasing both online and in-store. These respondents also had to have purchased or leased a car in the last year.  Read the full study and learn about Roadster’s Omnichannel Commerce platform here .
How AI and Intelligent Messaging Help Dealers Increase Sales and Service Revenue

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The internet and social media have created a society of consumers who expect information immediately at any time of day or night. In an always-connected world, information is so readily available that our expectation of instant satisfaction has spilled over to our interactions with businesses. Customers just won’t wait for a response. Even dealerships with seemingly long hours like 8 a.m. to 8 p.m. won’t cut it — and 24/7 call centers are expensive and don’t provide the level of expertise and care your customers expect. We recently conducted a mystery shop study of more than 1,500 dealerships to gauge their responses to leads from their website and social networks, and the results were less than stellar. The study found that only 16% of dealers responded to leads with a price quote within 15 minutes, despite data that shows internet shoppers who receive a response within 10 minutes are three times more likely to visit the dealership. See the rest of the results at digitalairstrike.com/lead-response-white-paper . With a growing number of consumers with short attention spans and high expectations of business response times, how do dealerships maintain a competitive edge? The answer is artificial intelligence (AI), which powers intelligent messaging. Dealerships can use AI-powered messaging platforms to free up the valuable time of salespeople by capturing and qualifying leads, searching inventory, scheduling appointments and, if needed, routing leads to appropriate team members. This process works through the deployment of intelligent messaging bots via website chat, SMS text, and social media messengers. The bots can respond to customer inquiries within seconds, so if salespeople are tied up with in-store customers, or it’s after business hours (say, 10 p.m.), leads are still nurtured and pulled deeper into the sales funnel. The level of sophistication available in some of today’s top intelligent messaging platforms can solve 80% of customer questions, according to a recent study by Accenture. Businesses are using AI to communicate with their customers in new ways, and consumers are OK with it. According to our 7th Annual Automotive Social Media Trends Study of 4,000 car buyers and service customers, 70% of people ages 18 to 44 have used AI-powered messaging tools to contact a business, and 87% classified the experience as positive. Additionally, 82% are willing to use messaging tools to get information about a business, and 88% would book appointments through the technology. These early-stage interactions can easily be handled by AI-powered bots and deliver information to customers 24/7. Not only do intelligent messaging platforms make operations more efficient, but their 24-hour availability has also been shown to improve customer satisfaction. Forbes recently reported that 75% of companies using AI have seen customer service ratings increase by an average of 10%. This increase in satisfaction can be the difference between closing a sale or losing a customer to a competitor. Simply placing the right chat feature on a dealership website can increase website to lead conversions dramatically. State-of-the-art intelligent messaging platforms are already helping dealers sell more cars and schedule more service appointments. “The AI technology communicates with our customers who message us through Google Text My Business and on Facebook Marketplace, and then directs the conversation to a team member when they are ready to buy,” says Brett Boatright, general manager of Arizona Dodge and Winslow Ford. “The fact that the leads are sent directly to our CRM makes follow-up much more efficient. [The platform] also sends vehicle price quotes — without getting salespeople involved until they're needed,” continues Boatright. This not only makes capturing leads easier, it also provides a solution for dealerships that lack the resources to stay engaged with consumers around the clock. Now is a critical time for dealerships to prepare for leads from car shoppers via messaging. AI enhances the customer experience and makes businesses more efficient. Technology trends come and go, but some are more disruptive than others. This one is destined to change the industry forever. Interested in other automotive industry trends? Get the results from our latest Social Media Trends Study at digitalairstrike.com/trends . Alexi Venneri is co-founder and CEO of Digital Air Strike — a leading social media and digital engagement and intelligent messaging company that works with thousands of businesses worldwide, and creator of the Response Path intelligent messaging platform. Alexi has more than 20 years of experience in marketing and is a pioneer in digital response, social marketing, and online reputation management. Alexi has a BA in marketing from the University of Calgary, and is an accredited trainer at the University of Washington as well as the Pacific Institute. She supports numerous charitable organizations and works closely with ARME and the Beagle Freedom Project, nonprofit organizations that rescue and rehabilitate animals.