Throughout the COVID-19 pandemic, we have monitored its impacts on retail—a sector that’s faced substantial challenges over the last few months. Knowing automotive sales is often a leading indicator of where retail is moving, we recently conducted a survey of dealerships around the country. We asked them about what changes they’ve made over the last few months that they plan to continue with moving forward, how their relationships were with their OEMs during the shutdown and what they need in order to be successful in this new post-pandemic environment.

When non-essential brick and mortar stores were forced to close their doors during the pandemic, shoppers had to turn to e-commerce for their purchases. Even those previously resistant to online shopping had to overcome that barrier, resulting in greater numbers of people now turning to virtual storefronts. 

Like most retail businesses, automotive dealerships had to begin using alternative ways to sell and service their products. Most, if not all, have turned to technology. Virtual platforms have allowed customers to shop for and purchase cars without stepping foot in a dealership showroom. Online vehicle walkarounds, personal test-drives, video conferencing with salespeople, online credit processes and electronic document signing have all been implemented. Service departments have responded as well with valet options that offer home pickup and delivery of vehicles. It has resulted in a more convenient, efficient process for both customers and dealerships.

When we asked dealers how likely they are to continue focusing on online sales and service, 60% said they were very dedicated to this approach, while 40% were reluctant or very much against it. While these results are split nearly down the middle, the case for this new digital retail model is a strong one. 

A study by Capgemini showed that 64% of potential car buyers now prefer to complete their purchase of a vehicle online rather than in a dealership. This is up from 39% pre-pandemic. It further solidifies the likelihood that dealerships will continue to focus on virtual sales platforms. Tesla was ahead of the game on this, implementing an online-only sales model in 2019, transitioning the customer journey to all digital.

As automotive dealerships face the challenge of changing their retail model to meet the buying preferences of customers, they indicated in our study that they need sales, service and technology training from their OEM partners to succeed. When asked to rate their overall satisfaction with the training provided by their OEM partners during the COVID-19 pandemic, dealers responded with an average score of 2.5 out of 4. At a time when many people were working from home, it was seen as a lost opportunity to engage and educate dealership staff.

Support is another area that was lacking, according to our survey. When asked to rate their level of satisfaction with the support provided by their OEM partners, dealers responded with an average score of 2.6 out of 4. For the most part, it appeared OEMs were caught off-guard, like many companies, when the pandemic struck. 

While satisfaction with training and support is low, other scores have not been negatively impacted during the pandemic. When dealers were asked to rate their level of pride in representing their OEM brands, we found they are taking even more pride in their brands, compared to the study we did in September of 2019. Dealers responded with an average score of 3.5 out of 4 on their level of OEM pride.

In our survey’s direct feedback, many dealers indicated they see the pandemic as an opportunity to make changes moving forward. As non-essential businesses were forced to close their storefronts, many dealers saw how productive they could be working remotely with only part of their staff. Some said they would continue with a smaller team of dedicated employees. Others see the possibility of reducing their standard hours of operation, but offering appointments for customers at any time.

While the retail landscape continues to change, possibly for the good, our study revealed automotive dealers have remained positive and resilient. If we have learned anything from the pandemic, it is to be as nimble as we can, and be ready and willing to change when the unexpected happens.Discover more about our study and the future retail experience in our whitepaper, Retailer of the Future

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