Lori Wittman, Cox Automotive’s president of retail solutions, grew up on a Kansas farm where her father raised crops and dabbled in new technology by installing electricity-generating wind turbines on his spread.
On her own, the former farm girl has forged a career in technology and extols the benefits that auto dealers can reap by embracing data science and automation.
She points to the just-released Cox Automotive Forward-Thinking Dealership Study that finds dealers actively using such digital tools throughout their operations post profit margins above those of traditional auto retailers. The Forward-Thinking Dealership Study measures where dealers are investing in technology and processes, key performance indicators (KPIs) they are tracking and the impact these investments are expected to have over the next three to five years.
So-called forward-thinking dealers “are still in the minority, but it’s a growing group,” Wittman (pictured, below left) tells Wards.
Cox Automotive looked at a select group of 449 dealers for its study. Of that number, 18.5% are deemed forward-thinking and blazing trails to meet rising consumer expectations, sell more vehicles and make more money, the company says.
“The people piece needs to be there, but technology helps you have better human interaction with customers,” Wittman says. “You can have a better conversation when you know about people from information and personalization drawn from your CRM (customer relationship management system).”
Here are three highlights of the study:
1. A dedicated marketing staff and CRM investment are key.
Nearly two-thirds of forward-thinking dealers have a dedicated marketing staff and leadership team, including a chief marketing officer. That compares with 8% of static dealers.
About 75% of forward-thinking dealers, compared with 33% of static dealers, say they live by their CRM systems. Those contain an array of client preferences, buying history and information that aids personalization.
Approximately 82% of forward-thinking dealers mine their CRM to send out personalized emails to customers.
About 56% of forward-thinking dealers market their service departments to local car owners who didn’t purchase a vehicle from them, while only 17% of static dealers do so.
2. A long-term vision is essential for inventory strategy.
Nearly 60% of forward-thinking dealers are more likely to have long-term visions for inventory versus 12% of static dealers. Almost all forward-thinking dealers have dedicated resources that manage inventory.
3. Digital tools, presence and engagement are paramount.
About 70% of forward-thinking dealers have electronic libraries that automatically generate contracts and forms. That technology speeds the process and allows employees to quickly send needed information to lenders. Only 17% of static dealers have this capability.
Two in three forward-thinking dealers stay on top of search performance, providing advanced search filters on their website so shoppers can home in on a specific vehicle they’re looking for.
Speaking of the power of technology at dealerships is Tom LaPointe, internet director at Preston Automotive Group, which operates 15 stores in Maryland.
“Having all the data points at our fingertips gives us a huge advantage,” he says. Automation in inventory management and pricing allows Preston to “put deals together every day.”
Wittman adds: “New dynamics are in play that require dealers to be visionary, nimble and pragmatic about the role of digital technology.”
But technology has a price tag.
Stories circulate in the auto retailing world about some small operators who sold out because they couldn’t afford the technology that is becoming more crucial to doing business.
“I’m not here to say who’s going to go or stay,” says Wittman. “But scalability is one of the things we’re trying to make sure is top of mind. One size doesn’t fit all. We provide a menu of options.”