CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
In general, car dealers are not known for adopting new technologies that can help them do their business more easily and more efficiently. For example, dealerships have not been too keen on embracing the Internet, one of the greatest inventions of our time, and use it to increase sales and provide a better service for their customers. But, like with almost any other business, the Internet can be of great benefit to auto dealerships, which can take advantage of the seemingly endless possibilities it offers, in order to adjust to the ever-changing needs and preferences of customers, and make the sales process more convenient for them.
However, it seems that they have started to realize just how helpful the Internet can be, and many dealerships are now aware that a vast majority of consumers nowadays use it to make all sorts of purchases, and that popularity of online shopping increases at a pretty fast pace. Today's buyers like the convenience and the simplicity of online shopping, and they don't care for that face-to-face approach at dealerships that has always been one of the most important parts of the whole car buying experience. They want to be able to take a look at the cars they are interested in online, see their specs and compare prices, and only go to a dealership after they have decided which car is right for them. They don't want to waste time and go from one dealership to another just to see what a certain car costs, if the Internet allows them to do that from the comfort of their homes. This way, buyers only have to go to a dealership to take the car they have chosen for a test ride, and negotiate over its price, which is far more practical.
What dealers can do to take advantage of the Internet is provide customers with as much information as possible through their websites or mobile apps, letting them know when they have special deals on specific models, or offer discounts to those who download their smartphone apps and shop with them frequently.
Additionally, if customers can buy a car online, it will reduce dealerships' operating costs and fees significantly. For instance, they could streamline the sales process and make it faster and more efficient, conducing all transactions online, eliminating the huge stacks of paperwork that are created after each sale. By digitalizing the filing system and computerizing the process of categorization of all sorts of documents, dealerships will be get a chance to increase sales, as well as profits from a more efficient service center, that allows customers to make an appointment online and can diagnose a defect and resolve it more quickly by retrieving information about a certain vehicle from a digital archiving system.
To sum up, dealerships need to accept the fact that technology can help them keep their customers and avoid losing potential buyers, because of their inefficiency, and the inability to speed up their sales and service processes.