The future of auto retailing is more technology, but also more human contact.
Consumers want to handle the unpleasant parts of the car buying process, such as obtaining financing, through programs rather than people.
Chris Macheca, chief operating officer for PassTime, said he foresees a time when consumers use a kiosk at the dealership to handle everything from obtaining insurance to making payments.
Despite all the talk about a cashless society, these machines will take cash for payments just like an ATM.
“No one wants to handle cash any more,” Macheca said.
That will be good for dealers because they can employ less staff and avoid the hassles that come with handling cash.
“You’re seeing more streamlining of customer service,” Macheca said.
Streamlining doesn’t mean eliminating people from the process, but rather focusing them more on what really counts for customers.
A study by Autotrader.com on what consumers want from dealerships found that 84 percent of consumers still want to buy a car from a person.
“It’s not that they want the brick-and-mortar dealerships to go away,” said Michelle Krebs, senior analyst for Autotrader. “But they do want a lot of changes.”
What they want from dealership staff is guidance.
“They want salespeople to be more consultative about the products,” Krebs said.
This is especially true for younger shoppers. About half of Millennials surveyed by Autotrader said they are more likely to rely on a dealership for education about vehicle details, special offers, warranty and service information, financing options and just finding the best vehicle fit for their lifestyle.
Krebs said the best example of this kind of retail experience is the Apple Store, a place where people go to learn as much as buy.
Some dealerships are already offering classes on topics such as setting up an in-car infotainment system.
This can pose a challenge for used-car dealers as they have to keep track of a wide array of products from dozens of manufacturers.
Krebs said one way to address this challenge is by looking for staff from non-traditional sources. The local Best Buy might prove a better source for employees than another dealership, for example.
The industry also needs to promote auto retailing as a place where tech-savvy young people want to work. This might mean creating a different atmosphere than the traditional dealership.
Dealers might not need to go as far as putting foosball tables in their stores, but they’ll probably have to offer more flexible hours.
Another main demand from consumers is they want more test drives.
“They don’t just want the salesperson to take them around the block,” Krebs said. “They want more extensive test drives and they want to test drive competitive models.”
Technology will help dealers provide those test drives. Macheca said dealers will use the devices from companies like his to track vehicles and turn them off if necessary for more than just collections.
These other uses can include test drives, but also short-term rentals and car sharing.
There are already European firms that finance vehicles based on how they are driven.
Good news for used-car dealers is that tomorrow’s consumer will probably be even less brand conscious than today. This creates an opportunity to gain customers by offering better service and more education about technology.
The biggest cost for creating the dealership of tomorrow then is hiring the right staff. This doesn’t require tearing up the bricks and mortar, but it might require tearing up the employee handbook.
Krebs is confident dealers can adjust to these new technologies and new ways of doing business.
“Dealers are adaptable,” she said.