It's no secret to anyone that the automotive industry is a hugely significant aspect of our national economy.  In the wake of the horrible natural disasters our country has been enduring since August, the Dealer.com team wanted to take a look at the link between these natural disasters and car shopping behavior.  It turns out that car shopping can tell us a lot about how a local economy is reacting and responding to these tragedies.  

First, we looked at the Houston area immediately following the landfall of Hurricane Harvey on August 26th.  In the days following the hurricane, we saw a significant drop in both traffic to our websites as well as leads submitted to dealerships.  However, that drop was immediately followed by a spike as people bought new cars to replace those that were damaged in the storm.  About a month later, things returned to normal levels.  

The situation in Florida following the landfall of Hurricane Irma on September 11th is similar, but slightly different in an important way.  In Florida we saw a steady drop in web traffic and lead volume leading up to the hurricane's landfall and a subsequent return to normal levels about 5 days later.  What we didn't see was the same spike of demand, which suggests that the damage in Florida was a bit less severe. 

In Puerto Rico, the data tells a completely different story.  Hurricane Irma hit Puerto Rico on September 6 and hurricane Maria ravaged the island starting on September 20th.  The recovery of web traffic in Puerto Rico was considerably slower than in both Florida and Texas, with things starting to return to normal 9 days later, only to fall again sharply as preparations for Maria began.  The devastation following Maria is clear.  After 3 weeks, web traffic was still only 17% of normal, with no spike in leads.  It's not at all surprising that shopping for a car isn't top of mind for the citizens of Puerto Rico, but the data does further emphasize the point that these hurricanes have substantially damaged the homes, property and economy of the Island.  

I first fell in love with the Automotive industry the first time I took a camouflaged prototype Cadillac on a 3 day road trip while working for General Motors.  Since then, I've grown to appreciate the impact that our industry has on the hearts, minds, wellbeing and economic security of people all over the world.  The impact of these natural disasters is horrible, but I'm proud to be part of a company and an industry who will be on the front lines of restoring normalcy and security to the areas hit hardest by these disasters.

Cox Automotive has numerous relief efforts in place to assist our dealer clients and partners impacted by these disasters. The Critical Event Management (CEM) team was formed within our Client Success group.

If you know of a dealership or related-business impacted by the hurricanes, please advise them to contact the Cox Automotive CEM team at HurricaneSupport@coxautoinc.com.

 I'm also going to make a donation to support recovery in Puerto Rico.  

James

The data in this article is based on visits to Dealer.com hosted websites. 

For dealers and OEMs alike, holiday weekends have become synonymous with increased shopping activity, bigger ad spend, and typically an uptick in sales. Think of all the advertisements you’ve seen tied to Presidents’ Day or Memorial Day weekend promotions; it certainly doesn’t hurt to capitalize on the extra day.

However, according to new data from Dealer.com’s DataView index and Dealertrack’s Credit Application Network, this Columbus Day weekend bucked the holiday trend—we witnessed a five percent drop in dealership visits, a one percent drop in vehicle detail page views (VDP), and a six percent drop in unique credit applications processed compared to the previous six weekends.

It wasn’t just this past 3-day weekend that hit a car-shopping rock block: Labor Day weekend also digressed from the usual uptick in shopping activity seen during three-day holiday weekends, with a three percent drop in dealership visits and only a slight increase in VDPs compared to the six prior weekends.

Long-weekend holidays earlier in the year sang a very different tune however. Both Presidents’ Day weekend and Memorial Day weekend delivered noticeable upticks in car-shopping activity, with a thirteen percent and four percent increase in dealership visits respectively. The downward trend we are currently seeing can be linked back to the four following factors:

Natural Disasters

Between the North California wildfires and Hurricane Nate, not to mention continued clean-up efforts from Hurricane’s Harvey and Irma, buying a car likely was not top of mind for a large number of Americans this past weekend. However, expect a demand for vehicles to rebound; Cox Automotive data indicates that damage from Harvey and Irma has created a need for 600,000 to 1 million replacement vehicles.

Over-Incentivizing

Dealers are currently struggling to increase demand further than they already have and, as a result, are offering incentives at significantly high rates. However, with so much incentive activity taking place daily, holiday weekends and the deals that go with them are understandably becoming less and less novel. With not enough foot traffic and too much inventory, dealers need to focus in on having a strong Q4 and cleaning out their inventory.

End of the Year

It’s mid-October and with this year’s lower SAAR on top of mind, dealers have their eye on reaching their end of year numbers rather than another holiday weekend. At the same time, school is back in session and families are focused on spending money on items other than a new car. Thus, holiday weekends, especially those later in the year, don’t seem to have the same charm they used to for both the dealer and the consumer. The only holidays that can likely crack this end of the year downward trend? Perhaps Black Friday and Cyber Monday.

The Day Itself

Yes, Columbus Day is a holiday weekend, but we have to take into consideration the fact that not everyone actually gets this holiday off.

While three-day holiday weekends provide unique windows to move metal, dealers need to be focusing in on having a strong end of the year and ensuring that they are investing in the right places, particularly when it comes to marketing. Many dealers are throwing money into all different promotional channels, from digital to traditional marketing spend in hopes that something will stick, but this is often an ineffective and expensive strategy. Dealers need to remember that it is about quality not quantity.

There are plenty of tools available to help dealers measure the quality of their marketing efforts to see if their investments are actually paying off. Advertising and offering incentives wisely will be key to finishing out the year with a bang—which will give any dealer a reason to celebrate.

Anyone who has heard me speak publicly in the past 18 months has heard me talk about the importance of Quality over Quantity, or finding the Quality IN the Quantity.  They've also heard me talk about Dealer.com's commitment to analytics transparency and building and maintaining the trust of our clients in terms of the data we share with them.  

On Wednesday, an article was published here on Driving Sales claiming that Dealer.com was corrupting client's Google Analytics data. The article was the first we heard of this issue and we immediately investigated and root-caused the problem as a misbehaving 3rd Party Integration on 16% of our sites. We shut off the integration and performance was restored. We're working closely wth the 3rd Party, which is a respected brand in the industry, to make sure things are fixed and we can restore their access to our platform.  

We remain committed to analytics quality and transparency across our platform, and we'll continue to take action to ensure that clients can trust the data they're getting from us and can accurately measure the performance of their Digital Marketing efforts.

Dealers should investigate the quality, performance and data-usage of their 3rd Party integrations to make sure the exceptional quality of their Dealer.com websites is maintained.  3rd Party Integrations can cause your site to load extremely slow, share you data in ways that you aren't aware of, and negatively impact your dealership's brand.  As with data, I encourage dealers to focus on the quality of the 3rd Parties they allow to have a presence in their digital showroom.  

As always, I'm thankful to the team at Dealer.com for jumping on this recent issue with passion and expertise and quickly taking action to protect our clients!

#ddcftw