The auto industry has always been resilient through challenging times, mainly because of the people. It’s an industry that you just can’t keep down. Second-quarter earnings calls from many of the publicly traded dealer groups showed as much with earnings that exceeded expectations despite an extremely challenging quarter dominated by COVID-19.
Automation and tech made their place well known on those calls, though. Jeff Dyke of Sonic Automotive, Roger Penske of Penske Automotive Group, and Earl Hesterberg of Group 1 Automotive all made mention of automation and innovative tech that have streamlined processes and necessitated fewer team members in their dealerships. Fewer salespeople and fewer front-line service staff.
Overall, Penske is making furloughs permanent for 14 percent of their workforce and others are at similar rates. Is tech and automation in dealerships actually taking away jobs?
In the service drive, there will be service advisors and BDC staff that won’t have jobs to return to because they’ve been replaced by automation. Examples include online appointment scheduling and service kiosks to check in vehicles for those appointments.
But there’s a problem. Research by Treasure Data as recently as last fall shows that only 1 in 5 customers prefer AI to human interaction in customer service. Only 20 percent. For many, the interaction with AI is only a stopgap for communication while real live people aren’t available.
Eighty percent of customers prefer talking to a warm, friendly body rather than a machine or software. And the dichotomy occurs because the two are not independent, but complementary.
A machine is less able to relate to a customer the benefits of completing maintenance or repairs, potentially resulting in an increase of deferred or declined services. But a human can’t work 24/7. Together, they work well at improving efficiency as dealer groups are saying, but trimming the workforce is not a popular or effective strategy.
It places extra pressure on the remaining staff and reduces the ability to cover staffing shortages due to illness and vacation. And in an industry that drives the US economy, it puts people into the unemployment line.
There’s certainly a place for tech and automation in service departments in dealerships. An online appointment scheduler helps alleviate calls to the service desk and BDC. Chatbots can engage customers when the store isn’t open. Increased technology in the shop ensures safer repairs.
But it’s the people that make your dealership what it is. Customers want to interact with other people. The proof is with self-checkout kiosks at Walmart and grocers worldwide – there are always more people who prefer to cash out with a person. I choose a personalized service over automated checkouts whenever possible, and I’m not that unique.
For dealers, it’s as much about social responsibility as it is about generating more revenue or streamlining efficiencies. Embrace the tech, but find other roles or responsibilities for the people it affects rather than trimming positions. Tech is an opportunity to grow with the people you have.