The larger an organization is, the more important it is too see what the market will look like in the future. Size can cause an organization to lose its ability to change quickly, so it must see farther and more clearly. While some organizations do serious work on 50 year plans, it seems to me 5, 10, and 20 year plans make the most sense for auto retailers. These plans require a little knowledge in forecasting.
The most important thing I ever learned about long-term forecasting came from Jeff Bezos, CEO of Amazon. He said it was more important to start with the things that will stay the same then to focus on what might change. Here are some of the things I think auto retailers can rely on for the next 20 years.
- The dealer’s online domain will remain a critical marketing tool. Today, this is limited to the dealer’s website(s). This may seem obvious, but it is worth noting since the same cannot be said of interruption advertising, tools like newspaper, television, and radio. Nor can one be as certain about any particular 3rd-party site (e.g. Edmunds, AutoTrader.com, Cars.com, or kbb.com). The dealer’s website is the one place the dealer can post all the information they think will aid in the auto shopping process. Much of this data may be sent to other places, willingly by the dealer or unwillingly through scraping it, but consumers will continue to view the dealer’s online domain as the original source direct from the dealer.
- Many shoppers will still choose to transition from an online conversation with technological touchpoints to a human touchpoint. An increasing number of shoppers may purchase their vehicle with no human interaction, but it will not be all shoppers and may not be most shoppers. Today, these forms of human-to-human contact are email, chat, text, video chat, phone, and walking in (face-to-face). Email may decline in importance and video chat may become a leading form of human-to-human conversation. What will not change is the dealership’s need to be expert at communicating in all the ways shoppers wish to communicate or contract out that function to someone who can.
- Demonstration of the vehicle’s interior will continue or grow in importance. This may happen online, in the store, and probably both, but the portion of consumer benefits being derived from the interior will not diminish. The less important driving the vehicle becomes, the more important it will be to be productive, relaxed, and/or entertained inside the vehicle. Even where the driver maintains the full driving process and rejects all outside stimulus other than the road and its surroundings, the ability to switch over to a fully connected platform will be a standard feature. The importance of the exterior appearance and/or performance may diminish for many shoppers. This seems likely, but the importance of the interior with all its comfort, convenience, and communication features will not be diminished. Many stores have had a difficult time keeping up with the growing functionality within the interior and will need to step it up.
- Consumers will demand credible information about the vehicle and the deal. I doubt anyone thinks consumers are going to become less demanding in the amount of information they require. Every shopper is different, but most shoppers today would not spend $20,000 or more on a vehicle with the kind of information they were given 18 years ago. Information demands will not slide back even to the point they are today.
This is not an exhaustive list. What things do you see staying the same over the next 20 years?
Note: I will be giving a provocative, detailed presentation at DrivingSales Executive Summit on the way automotive retail will be conducted in 2018.