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What Dealers Want From Their OEM Programs

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Automotive manufacturers create programs for their dealers to improve operations, drive up sales, and increase customer loyalty. But how successful are these programs in actually driving results for the dealers? RevolutionParts conducted a survey asking hundreds of dealers how effective they thought their OEM programs were and what areas they felt needed the most improvement. As a whole, dealers who adopted their OEM programs generally liked them, which is great news for manufacturers. This means their dealers see value in adopting and running these programs. Currently, OEM programs permeate the entire dealership, but more so in the parts department than anywhere else. In fact, a whopping 84% of dealers use OEM programs in their parts department. The three most significant considerations dealers take into account when deciding whether to adopt an OEM program are:  The overall cost of the program Overall sales impact and life directly from the program The success of other dealerships using this program Although dealers were generally satisfied with their OEM programs, they also reported that they wanted these programs to provide more resources and incentives to help drive their sales more effectively. More than half of them also felt like the program was designed to be more beneficial for the manufacturer than for their dealership. Areas of Improvement for Manufacturers One of the biggest concerns among dealers was program communication. Up to 50% of dealers reported that manufacturers needed to improve communication around their programs to help and provide more employee training and support. Nearly 45% of dealers said that manufacturers needed to expand OEM programs to better reflect current and future business models.  When asked what manufacturers needed to work on, dealers said they wanted:   Easier to use programs (especially for online sales) Higher-quality training for employees Better customer service support Consistent inventory tracking Offer higher-value incentives for dealers to drive sales Improvements made to each of these areas will help dealers improve their eCommerce sales, help them engage with their customers more positively, increase customer retention, and build customer loyalty.  Dealers Want More eCommerce Support Today, most dealers understand that the way people do business is changing, as more people are going online to shop for cars, parts, and accessories, and to schedule service appointments. Dealers today are looking for eCommerce solutions to help them expand their business online and reach their overall goals, an area most dealers feel their programs are lacking.  While most dealers are willing to adopt their OEM programs to support their eCommerce goals, dealers felt that these programs could use some upgrades. This is a big opportunity for manufacturers to change along with their dealerships to offer better eCommerce solutions.  Get the Full OEM Program Satisfaction Survey Results The RevolutionParts OEM Program Satisfaction Survey gives insight into the needs of dealerships across multiple areas of OEM programs, overall OEM program satisfaction, and what OEMs can offer their dealers to help drive their business growth goals. View the full report here .
Lockdown Spurs Growth of Streaming Video, Driving More Opportunity for Local Dealers

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The COVID-19 pandemic has changed many aspects of our lives, including the way we work, learn, shop and communicate. In regards to consumer video consumption, the pandemic hasn't so much changed the paradigm as it has advanced significant trends already in motion, mainly the impacts of cord cutting and streaming on the growth of digital video and the continued audience erosion of traditional TV.  BIA Advisory Services (a recognized media industry consultancy) labeled OTT and connected TV as "game changers" citing "advancements in ease and ability to purchase fragmented inventory and more advanced audience targeting" in releasing its forecast for U.S. local advertising in 2021. According to BIA's Rick Ducey " (the) local viewership shares gained in Q2 and Q3 of 2020 (are expected to) be maintained and expanded" According to eMarketer research , connected TV (CTV) audiences have now surpassed those of cable TV. Simply put, the audience growth that has occurred as a result of the lockdowns is here to stay.  OTT's growth, along with advances in data integration, provides new opportunities for dealerships to use more personalized TV advertising to deliver targeted video ads. Advertisers are now able to layer in-market data from first-party and third-party vendors to target in -market buyers based on make/model or class of vehicle. It is now possible to deliver, on a local level, specific unique commercial messages by household or even individual viewer. This means that different creative messages can be delivered to different people viewing the same content at the same time based on a number of household demographics or characteristics.  There are also continued advances in attribution. By adding a tracking pixel to their website, advertisers can more easily track and manage the performance of their OTT campaign(s) to ensure they are driving traffic that converts to actual vehicle sales.  How does OTT compare to television, YouTube or social video platforms? In comparing OTT and programmatic advertising to index-based broadcast or cable TV; comparing the cost per thousand (CPM's) of impressions each media delivers has been the traditional approach. Other factors typically considered in this type of analysis are factors such as age, sex, geography, rating survey area, live versus delayed viewing. Here you might see comparable CPM's for a linear or traditional TV buy when compared to OTT. However, this level of analysis fails to account for the targeting advantages OTT delivers in the ability to target in-market shoppers. Assuming that 11.51% (14.8 MM SAAR projected for 2020) of U.S. households plan a new vehicle purchase within a year, and assuming a three-month purchase cycle, counting only those "in-market shoppers" would result in an adjusted broadcast/ cable CPM easily in the $500+ range vs. a $30-40 CPM for OTT. While this analysis assumes that 100% of the OTT campaign is in fact targeted to in-market shoppers, the magnitude of a 10-fold difference in effective reach vs. cost builds a strong case in favor of the OTT model. OTT advertising also offers some key advantages compared to other digital platforms such as YouTube and Facebook. While both YouTube and Facebook offer the target ability of in-market shoppers, the granularity available in the attribution of OTT campaigns is currently not easily duplicated in either of those media. Another advantage unique to the OTT platform is the high completion or view thru rate of the video campaigns which often exceed 95%. This means that OTT video messaging has a high completion rate. Compare this to YouTube with a view completion rate in the 31% range ( bigcommerce.com ) or Facebook, where the scrolling nature of the format also translates into a low completed view-thru on the video ads. In Conclusion The pandemic has accelerated consumption of on-demand content while, at the same time, the capabilities of OTT advertising continue to evolve. While this will eventually be a crowded field, similar to local search advertising, right now there exists a unique opportunity for savvy automotive retailers to use video to position their dealerships with greater local competitive dominance and drive tangible and measurable incremental store sales.
How COVID Is Reshaping Car Shopping and What It Means for Your Dealership

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When Covid came crashing onto the scene at the start of 2020, it brought disruption across almost every industry, including automotive. Dealerships were forced to close their doors to in-person visits, OEM plants shut down, auctions moved online, and consumers stayed home.  Nine months later, dealers have shown incredible resilience and flexibility in adapting their marketing and retailing tactics for success. The  most recent update  of our ongoing CarGurus COVID-19 Sentiment Study shows dealers aren't the only ones acclimating during this challenging time, though. Here, we break down our latest consumer sentiment data — and what it means for dealers. Car sales are lagging, not lost While the pandemic's reality has caused some to delay their vehicle purchases, 71% of people who plan to purchase by the end of 2021 are already actively researching vehicles online, according to CarGurus' November study. Of those who bought during the pandemic, half said they purchased when planned because they had an immediate need for a vehicle. For other purchasers, necessity wasn't the issue: 27% said they were motivated to buy because they wanted a vehicle for personal travel, leisure, hobbies, or projects. Vehicles offer a sense of escape and fun during this challenging time, which may be one reason why 30% of those who bought in 2020  weren't  planning to do so before the pandemic. For dealers, it's important to remember that consumers' need and desire for vehicles aren't likely to go away any time soon.  Limited vehicle selection is driving consumers to be more open Shoppers had felt the pandemic's impact on both selection and price, though the impact varies depending on when they bought. Those who purchased a vehicle during the early months of the pandemic — March through June, when dealers were trying to offload vehicles — were nearly 2x more likely to say prices were much lower than normal, compared to those who bought from July through November (31% vs. 16%) when many dealers are experiencing a shortage of quality inventory.  Like consumers, dealers have also started to feel an inventory crunch in recent months. The good news for dealers is that shoppers are staying more open-minded about what vehicles to consider: 62% are considering more than one brand, and 42% are considering more than one type of vehicle. This leaves room for dealers to sway shoppers toward their available vehicles. Still, dealers will have to get creative and use tools and data to ensure their lots are stocked with in-demand vehicles that will sell.  Demand for financing continues to grow Affordability remains a concern, with 44% of shoppers saying they're less confident in their ability to afford a vehicle due to the pandemic (down slightly from 48% in June). Consequently, demand for financing has grown. Before the pandemic, 48% of shoppers were planning to finance — now, 62% plan to (or did).  With affordability a concern, now isn't the time to pressure shoppers into a purchase decision. Instead, dealers should nurture shoppers down the funnel, keeping them engaged and answering their questions as they get closer to a decision.  Since 52% of shoppers would prefer online financing, letting buyers get pre-qualified online and then prioritizing those leads is another way dealers can get ahead. For example, CarGurus shoppers can submit a lead on a dealer's VDP and get pre-approved for financing by at least one of the lenders a dealer works with. All that's left for a dealer to do is customize and finalize the financing. This makes for both a happy customer and dealer, with less time wasted on the in-person deal.  Interest in digital retail remains steady November's study found 88% say it'll be quite a while, if ever, before shopping habits return to normal. As a result, more car shoppers than ever are open to — and even prefer — buying online. Only 35% of shoppers were open to buying online before the pandemic. Today, 60% are, and that number hasn't waned since June (60%) or April (61%) — despite dealership re-openings.  With consumers' preferences changing and digital retailing strategies advancing, savvy dealers should look to tactics like online price negotiation, trade-in valuation, and financing, as well as home delivery to win today's shoppers. The current health crisis has accelerated digital retailing trends that were already on the horizon — and they're likely here to stay now. There's reason for dealers to be optimistic, despite the pandemic The Covid pandemic has reshaped many parts of American life, including how people research and buy cars. Still, bright spots remain for dealers who keep up with their digital marketing efforts and promote their online and contactless services. By continuing to market to consumers, dealers will stay top of mind, consequently leading consumers to turn to their dealership when they return to the market — and they  will  return. Read the full study here .
Survey Reveals Car Repair Trends During the Pandemic

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COVID-19 has disrupted how consumers interact with businesses in several industries, and auto dealerships are no exception. The industry has had to adapt to how customers get repairs and shop for cars. With economic uncertainty looming, car owners are opting to make repairs to current vehicles now more than ever, both to keep it running for longer as well as increase the trade in value. Though fewer people are heading into work or school during the pandemic, cars are still being driven because people are avoiding public and mass transportation in favor of road vehicles.  Bottom line: People still need reliable transportation during a major public health emergency. How they prioritize their auto-related purchases — new or used vehicles, repairs, maintenance, accessories — continues to evolve. Similarly, dealerships need to evolve to be strategic and agile in communicating with their customers because of nerves associated with their health.  To get a better picture of consumer habits around vehicle repairs,  DigniFi recently surveyed  401 dealerships and auto repair shops across the country. The survey revealed some insights that can give auto marketers a new perspective on customers. Highlights include: 57.6% of dealerships and repair shops say customers are deferring car maintenance because of the pandemic  60.8% of dealerships report more customers need financing due to COVID-19 Dealerships and auto repair shops indicate a 62.3% increase in car maintenance in areas where shelter-in-place has been lifted Auto repair shops and dealerships shared some specific insights about customer behavior during the pandemic. The survey isolated five particular trends, which include: Financial hardship is big on people's minds  — "A lot of customers are holding off doing repairs or maintenance due to being furloughed." There are fewer collisions because there are fewer people on the road  – "I deal with collision. Fewer vehicles on the roads mean fewer accidents. Also, with fewer tourists, fewer rental cars to repair. Business has dropped noticeably." Customers need to know that a shop has clear safety protocols  – "Customers are much more concerned about COVID-19 cleaning processes and PPE while at the shop." People aren't using their cars as much, which leads to maintenance issues  – "We've noticed more minor repairs, probably from cars just sitting and more issues like battery failure due to vehicles not being driven as much." Consumers are reassessing when to get repairs  — "Routine maintenance is up. However, they appear to be putting off the larger repairs, even tires." Health officials have been warning of a possible surge in COVID-19 cases this winter, with local authorities loosening restrictions under public and political pressure to return to normal as the holidays approach. With more people gathering indoors, experts anticipate a spike in cases. All of this might lead to local or even statewide lockdowns designed to curb the number of cases that might overwhelm hospitals. If that happens, dealerships and auto repair shops will have to be agile enough to work with customers on their own terms, providing safe experiences, reliable services, and multiple financing options. Repair shops are going to continue to have a steady stream of business, and operators should be prepared for customers' current financial challenges.
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.
Newly Released Research Reveals An Emergence of New Automotive Markets

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It’s Time to Act Fast. As a company that lives and breathes data, we turn to the numbers in times of uncertainty. When we need answers, we rely on data, not gut, to guide us for the smartest decisions. It allows us to gain full transparency into what’s working, and what's not, and in turn, act fast. In a world that has completely shifted to an online buying process, acting fast has never been more relevant. This shift in consumer behavior has highlighted for dealers and OEMs the splintered state of their digital infrastructure and placed a spotlight on solutions that serve a new wave of online shoppers. With digital sales in full motion, your dealership's website has become the most competitive space to win market share and shows that the battle for the sale, which used to take place in the showroom, is now taking place online. And we’re seeing this confirmed in the data.   New Market Segments are Emerging Post-COVID Interestingly, shopping engagement has remained robust during the 2020 pandemic. Specifically, new buying behaviors from markets that wouldn’t be looking for a car pre COVID-19, are now interested.  Here’s what we’re seeing: Single car suburban families may become two car suburban families With safety and hygiene top of mind, families that only owned one car will now be in the market for a second car so they can enjoy family trips in their private vehicle. Business commuters may return to driving for short-haul work trips With surveys showing that the majority of vehicle owners will rely first on their private vehicles for transportation, we can speculate that short distance business trips that used to be by plane will now be replaced with private vehicles. Millennials may buy a car earlier post-crisis Millennials are speculated to play a big part in automotive recovery from COVID-19. Millennials that hadn’t prioritized buying a car with the convenience of Uber or Lyft, are now looking into purchasing or leasing a car in the next five years.   These millennials, for example, represent 25% of the total US population , encompassing all those from age 21-38, a total of 82 million consumers . Car ownership in this demographic has been surveyed at 75%, with a skew toward non-urban consumers. The average first-time car buyer from this demographic is 29 years old and male . With a decrease in comfort with public transportation and ridesharing, it’s possible to envision an increase in buying interest from this demographic. A 5% increase in ownership would equate to approximately 4 million more shoppers in the market. Families may turn to road travel for vacations, rather than flights In a response to the psychological effects of COVID, families may be more inclined to avoid public transportation and take comfort in either taking a second car or using a larger vehicle - prompting them to update their current vehicle. According to a recent study by Cars, it's clear the industry is continuing in the stages of a rebound phase. Engaged shoppers in the final stages before making a purchase are up more than 5% week over week. This is not just hoping for a speedy recovery for the automotive industry, but it suggests that dealers need to prepare to engage these emerging markets. What worked pre COVID-19 will probably not be sufficient in a post COVID-19 era. How Will Your Dealership Recover? For many dealers, dominating your state by getting found online can become a complex operation, especially with a fluctuating market based on a number of factors including government rules, news coverage, CDC guidelines, and more.  With customers engrossed in an exclusively online research process -- even more than before--, your dealership needs to dominate the digital space. It’s about staying personal, staying present, and keeping up with your shoppers’ ever-changing interests. It will be critical for dealerships to intelligently identify, target, and engage online shoppers.  Out-adapting and out winning your competitors in this new space will require the most sophisticated, superior dealer technology.  Best Practices for a Quick Recovery  With emerging markets growing rapidly, traditional technology just won’t make the cut. Making data driven decisions no longer just means guesstimating where your marketing dollars should go, but really trusting automation and machine learning to bring your dealership to life in ways that a human simply will not have the bandwidth to maintain. Begin to utilize more with less While your advertising budgets may be limited, using AI-driven technology will do the dirty work of targeting your new shoppers effectively and efficiently - saving you time and money. Don’t let social distancing stop you Use the shift in consumer behavior to your advantage. Start investing in technology that facilitates a complete, seamless digital experience that your shoppers will already be expecting. With consumers becoming increasingly cautious and discriminating in how they choose to spend their time, make sure you act fast to engage these emerging markets. Access the full report here .