Have you ever seen an old picture or video of yourself from back in the day, and then try to justify your ridiculous outfit by saying something like, “well, it was the ‘80s!” Unless you’re still going for that look from several decades ago, then you know the importance of making changes.
Old habits die hard, yet they do eventually go away, and it’s usually for the best. When innovation flourishes, whether it’s through pop culture or industrial progress, it’s good to know when to make a change for yourself, especially if you’re a business owner.
Retail automotive operations are changing, and it’s time to take notice for the sake of your own auto dealership. If you haven’t taken the initiative to bring your dealership into the modern era of business models, here are three key indicators that it might be time for you to do so.
3 Key Indicators
1. Technology is Coming to Automotive Retail
More and more companies are investing in technology businesses entering the auto industry. According to a recent TechCrunch article, “There have been 33 major equity transactions and investments worth $35 billion in automotive retail over the last 18 months.” The same article goes on to mention that “…the influx of outside capital is a big game-changer for an industry that has been more akin to moving at a slow pace but must start gearing up for the inevitable havoc that mobile, social, and big data technologies inevitably bring to established business models.”
2. Demographics are Changing
This goes for both dealership customers and employees. TechCrunch says that “Millennials have spearheaded disruption in the automotive industry with a major focus on pricing transparency, a preference for the ease of digital transactions, and the fundamental expectation that their car should simply be an extension of their “always on” mobile lifestyles.”
Hireology has found that in 2014, 48% of all new hires were Gen Y employees. Millennials now make up 29% of the average dealership workforce—an increase of 6% compared to 2012.
3. The Traditional Dealership Model is Giving Way to Change
The dealer’s website takes on increased importance, and the best people within the store are the ones who understand how to work in conjunction with online content, not as an alternative to it. The right personnel are those who embrace the changing communications and effectively work with shoppers from a distance as well as face to face. The best managers are often those who can hire the right people for the system shoppers want. The old days of shoehorning shoppers and employees into the sales process that managers demand are quickly fading away. The sales process needs to make it easy for shoppers to find the right vehicle online and in the store. That requires the right technology and the right people.
What to Do
For starters, get the right people on board at your location. High turnover is a well-known issue for the auto industry. Here’s what Hireology has identified as crucial problems facing dealerships and staff:
- People are the number-one cost for dealerships
- 75% of dealers report having trouble with hiring
- Hiring the wrong manager can put a dealership behind 6 months
- The cost of replacing a bad hire is between 3 and 10x compensation