Is there a “new normal” for dealerships?

Ian Reilly
Vice-president, sales, Reynolds and Reynolds Canada

The quick answer to the question in the headline is, absolutely.  But the reasons behind the answer may be even more revealing than the answer itself.

During the recession, vehicle sales in Canada fell by more than 10 percent and more than 300 dealerships closed.  In fact, had the industry continued to sell at its annual pre-recession rate of 1.67 million vehicles, dealers would have sold an additional 400,000 vehicles during the downturn.  

At some point, that pent-up demand will work its way through dealerships. That demand, coupled with the gap between the number of dealerships to serve a growing consumer market, will put additional pressure on dealers to handle the increased wave of sales and service volume.

The gap also points to other implications for dealerships.

First, dealers I know don’t want to simply hire more people in order to serve more customers. They want to become more efficient and productive in everything the dealership does.  

Second, it’s not just a matter of serving more customers; it’s also a matter of what customers now expect from retailers.  

Today, consumers and smart devices are continuing to change the retail experience, including automotive retailing, with access to information anytime and anywhere. And consumer experiences at other retailers are now applied to buying and servicing a car, which raises the bar on the customer experience with the dealership.

Third, the gap provides a big opportunity for a dealership to separate itself by winning the retailing battle inside the four walls of the dealership and by connecting with consumers in the ways they prefer to be reached outside the four walls.

Looking at changes in the market from the perspective of the gap, it’s easy to appreciate the pressures that are beginning to bear down on dealers. It also becomes apparent that traditional tools and services used in traditional ways in dealerships may not be sufficient to capture the opportunity ahead and to thrive in this “new normal.”

As we look ahead, we see the dealership management system evolving into a retail management system. It’s a comprehensive set of solutions that enables a dealership to manage every aspect of its retail operations – both inside and outside the dealership’s four walls to change how work is accomplished, to change how consumers experience the dealership, and to deliver the best results from both for the dealer.