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Car Dealers Innovate – and Fast

Six auto retailing steps to take now to meet the challenges of the moment – and beyond.

Some months ago, vehicle home deliveries, aggressive digital retail and online sales would be services more likely attributed to auto retail start-ups than to established OEMs and their dealer network.  

But today the impact of COVID-19 has made it just as likely they are services offered by traditional auto dealers.

Industry Voices bug (002).jpgIncreasingly, traditional dealers are exploring and, in many cases, executing creative options that also include contactless transactions, more flexible pricing and discount programs. 

These choices are designed to accommodate consumers’ evolving car-buying needs and help dealers survive and eventually thrive in the current environment. Dealers and automakers have adjusted their business approach seemingly overnight to meet the commercial challenges of the moment. 

Such speed and focus on creativity beg the question: Are traditional auto dealers becoming leading innovators in their own right?

In the past, dealers found it difficult to keep pace with constantly evolving technologies that could be used in the dealership. Today, many are making progress.

Since the onset of the pandemic dealers seem increasingly resourceful, creative, and agile in responding to radically changed demand.

This willingness to be more flexible and innovative will be key to succeeding during and post the pandemic. It will be crucial to overcoming a range of challenges ahead for dealers and the entire auto industry.

Mobility services represent the wave of the future, and the industry’s newfound willingness to innovate more will be a basic requirement for achieving success in this new market.

Major disruptions propelled by four megatrends – connectivity, autonomous, shared and electric driving – will shape the future mobility reality.  This means that dealers and automakers must not only contend with the effects of COVID-19 but will need to face the challenges of an industry in transition. There is a way to do it.

Building a Foundation

There are several actions dealers specifically can take now, if they haven’t already, to build that foundation and be prepared for the recovery and a mobility services transformation. 

  1. Digitally Connect. Pursue technologies that will fully digitally connect the dealership with consumers, coordinating the process with automaker partners. This includes developing or continuing to fine-tune marketing and online sales and channel capabilities. 


  1. Be Data-Driven. Use advanced analytics to continually gauge the pulse of changing customer shopping behavior and car-buying preferences. Also use the technology to identify potential new customers.


  1. Follow up Pent-up Demand. Proactively contact customers that may be undecided about resuming their purchasing journey until the crisis subsides.  As part of the follow-up, promote safety measures the dealership can provide, such as contactless transactions; online sales and home delivery for test drives and vehicle purchases.


  1. Continue Engaging Customers. Contact them through online and mobile channels – especially homebound customers.  Also consider marketing aftermarket vehicle service at the homes of customers. Be prepared for the possibility that customers may want these changes to become permanent.


  1. Re-evaluate Pricing Strategies. Adjust incentive and discount programs based on changes in the sales environment.  This should include planning strategically for pricing adjustments associated with an eventual rebound that also could include a second wave of pent-up demand.


  1. Prepare for Mobility. Plan for the mobility services transition. In addition to pursuing online sales, consider other mobility options such platform business models designed to meet demand for online shopping and vehicle subscription models that enable customers to pay a recurring fee to have access to various models that are not owned, but are at their disposal.

No Turning Back

brian irwin cropped.jpgThe pandemic has greatly added to the disruption that auto retailing already was experiencing. But this time of heightened uncertainty also has inspired traditional dealers to innovate more and re-imagine how to succeed in an auto market that has been upended. (Brian Irwin, left)

As the industry moves beyond the current situation and closer to mobility there will be no turning back. Such resourcefulness and innovative thinking will be needed in a profoundly changed market.

Brian Irwin, [email protected], is managing director at Accenture and leads its Automotive and Mobility practice in North America.

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