Traditional car retailing may soon change forever

For a car dealer a buyer who wants a new car can be a fairly straightforward transaction, although it may involve quite a wait but with used cars, on the other hand, due to their uniqueness, this is not always quite so easy.

Dealers have traditionally tried to stock their forecourts with a selection of their chosen product with the understanding that some will be more popular models than others. Independent dealers probably have a tougher task due to what may be in vogue and sought after today may be yesterday’s news very quickly.
As a result making the best use of funds and having the correct balance of stock both in terms of price range and model mix is an extremely tough job and requires skill, knowledge and above all experience.

Today of course this task has become even harder, the fact that cars marketed on the net can be seen nationally and therefore a model or colour, which may traditionally be seen as unpopular, may be just what a particular customer is looking for. So a dealer has to change with the times to keep up with the competition.
I was speaking to a sales manager recently who runs a volume franchise in south London and has been at the helm for nearly 20 years. When I used to work alongside him this particular dealer would sell between 70-100 used cars every month, now however he is grateful to sell 40.

There are many reasons for this decline in trade. The competition has improved, there are more dealers in his area and maybe, as he has been taken over by many different companies over the years, the expectation level has changed. I also believe that as buyers are now more switched on and will consider many makes of car that they are not as loyal to their local dealer as they perhaps once were and often feel that in the absence of a good service they would rather shop on price via the net.

An example of this is e-bay where colleagues have told me that unless you can sell cheap there is no point being on it because everyone is just out for a bargain, which stands to reason but I’m not entirely sure this view is totally correct.

It may not be quite as simple as that because buyers can source more unusual quirky cars and enjoy the excitement of being involved in a live auction and they don’t even have to visit a dealer to participate.
What these things do tell us is that by analysing what models sell the best and at what price range, dealers in the coming years will be far better equipped to cater for the needs of more buyers and at the same time become more efficient at stocking the right profile of car to cater to the biggest possible audience.

Like many things however this will never be an exact science because there is no way you can ever second guess consumer buying habits exactly because they are always changing and subject to so many different factors not least economics.

If I had a pound for the amount of times I had a little run on a certain model, and stocked up with them on the strength of that trend only to see 2 sell and the rest go over-age I would have, well, lots of them.

The other factor to consider is that as the profile of sales staff changes and they become more like customer service agents rather than traditional sales people, they will be less likely to possess the skill to be able to switch a customer from their first choice and offer viable alternatives. It is more likely that dealers could become more of a car finding service, and, as we are seeing, more and more wholesalers in the form of rental companies, re-marketers and manufactures are giving more dealers access to their stock enabling them to offer cars without even owning them.

We may even get to the stage where a customer can sit in the showroom with a salesman and view cars on line which will bear the dealer logo giving the impression that the cars are part of their stock, and the dealer is able to place an order without having to pay for the car until the customer has.

The question is although this could be great for buyers to locate exactly what they think they want, it certainly takes away the interaction and inclination to try before buying in order that the correct car is bought. In other words why have a salesman when you can choose straight off the screen what you want, how much you pay and when you can have it.

I’m not really sure if this will be a great tool for buyers or add more confusion to what is an emotional purchase at the best of times.

What this may mean for the future of car retailing as we know it, only time will tell.

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