Is your inventory like a fine wine aging to “perfection?” The word “age” and the word “inventory” used in the same sentence in our industry spells COST- to you!
My job is to go through dealer’s websites and analyze their web presence, the “stickiness” of its visitors and the websites general effectiveness as it relates to ecommerce efficiency and inventory management.
I have noticed over the last 2 months a phenomenon as I visit hundreds of dealer websites a week- less than 20% have advertized updated specials for their aging inventory- and typically the ones that DON’T have the oldest inventory. As a matter of fact over 50% of the sites visited had NO advertised specials at all. I found quite a few dealer sites that had large amounts of inventory that had been sitting on their lots for two, three and four hundred plus days! Yes you read that right. One particular site showed an average of over 200 days in stock for well over 40% of their total inventory.
In tough times we are going to see these numbers increase- but what baffles me is the majority of stores do nothing to merchandize the aging inventory aggressively through their website capabilities or their inventory management tools. Plain and simple, they do very little if anything to get the word out to move the inventory. There is no excuse for inventory of this age in these numbers sitting on a retailer’s lot, especially in the age of the Internet.
Your website is the place to feature the inventory that is costing you money with every day that it sits there-SPECIALS. With the features available to you through your website provider and/or inventory management systems you are only (or should be) a click away from pushing the old stuff to the front of the line so your store can wave it’s arms alerting shoppers of your eagerness to deal on these units. There are no excuses anymore for not advertising specials because it has never been easier. A well managed website, with a constant eye on inventory is all you need to tackle this problem.
Well Managed Website
This means make sure you have someone who really knows how to navigate and maximize your website from the back end and utilizing all features. This doesn’t mean that just because your cousin’s brothers girlfriend is out of a job and “is really good on the computer” she is a “really good” candidate for the job of your ecommerce. Neither is an existing porter who “wants to move up and is good on the computer”. Make sure you have the right person and then turn to your web provider to provide training and support for this person. Use this aspect of their services- it is there (or should be) and it is invaluable to you.
(Make sure that who ever is going to be responsible for the management of your website has examples through references of his or her work and involvement with past employers eCommerce and webmaster tasks.)
Quite often dealerships throw the responsibility of managing their website into the job description of their Internet or BDC Manager. Quite often these people are not qualified in the areas that one needs to be qualified in order to effectively manage a stores marketing through the website. Most of the time a good Internet and or BDC Managers area of expertise is process management and people skills (or that is where it should be). That is where their efforts need to remain. Outsourcing for the management of the website from a merchandizing and marketing standpoint quite often is the most effective approach. Allow your Internet and/or BDC Managers to do what they do- manage the various sales opportunities you hired them to manage.
I am not saying here that there aren’t people out there who possess the skill sets required to be successful Internet/BDC Managers AND eCommerce webmaster experts who merchandize and market your inventory effectively- but there are two opposite skill sets required for these jobs that are not usually found in the same person. Personality competencies alone for these two job types are typically opposite ends of the charts- so it is hard to find a person who possesses both. Not impossible, but unlikely.
Constant Inventory Management
It needs to be part of your stores daily process to review your inventory through your inventory management system. This needs to be done by sales management FIRST, with instruction to the eCommerce webmaster SECONDLY as to what needs to be moved and at what price. If you coordinate sales management (new and used) to work with your Website manager (master, administrator etc.) daily at the beginning of each shift the process will take less than 15 minutes per day once you have dialed into having specials managed effectively.
Your inventory control system should provide you with all that you need to monitor and track every aspect of your inventory. Reports are but a click away as is the ability to feature inventory that needs to move. If everyone is doing their jobs correctly, all data is being entered as it should be, every shift should be looking at real time available inventory and specials that are designed to get the inventory off the lot. Once a week a queue can be done to run a report to see what worked as far as how things were “specialized” and what didn’t work. Moving forward, you will have a plan with proven successes behind you to put into place each time a vehicle hits that “dinosaur” status.
Incentivizing your sales, BDC and Internet personnel is also an effective way to move old product. Spiffs that make it worth while for a rep to “feature” a special when talking to a customer will dramatically shorten a vehicles shelf life. If you have a sea of vehicles on the lot and no one knows what is 200 days old- then how can you expect people to emphasize a “special”.
An Internet shopper can more easily be appointed if during communication with him/her your people are able to stress to them that the “special” advertised on the website is on the lot ready for them to see. Then make sure you have a sign on that “special” vehicle coordinating with what was said about the vehicle on your website. The days of mystic secrecy of “Internet Deals” need to come to an end. They are confusing to your staff, the customer and counter productive for your store as a whole. How many times have you heard either a client OR one of your employees say “I didn’t know that this vehicle was offered as a special on the Internet?” If you are going to advertise specials then advertise specials- so everyone knows, not just the Internet shopper and the Internet department. Lack of communication is what causes discrepancy within a dealership with both disappointed shoppers and employees. Loose loose.
To sum this all up, a bit of familiarizing or re-familiarizing yourself as well as your sales employees with your websites capabilities in merchandizing and inventory control through the help of your website provider is key to moving old inventory.
Committing to a 15 minute daily regime with the joint involvement of your Webmaster, Internet/BDC and Sales Management staff will allow you to create the consistency required to manage inventory and greatly reduce the problem. Using the features of your webs eCommerce capabilities, along with pulling your staff together you can painlessly correct this problem with resources you have available to you at no additional cost.