20 June 2018

Reinventing the Dealership? A Matter of Remix and Balance

Italian dealers find themselves in pole position to face the great industry changes. They are in pole considering the number of intermediate vehicles, more than 80% of total market, but also on the information level. The recent Quintegia study shows that the 65% of people collect information by visiting the authorized dealerships, that stand out among other sources for their combination of penetration and relevance. Transforming starting from these strong basis means understanding how to remix the level of attention oriented to several functions usually managed by business intermediates, that are: information, promotion, negotiation, payment, risk management, physical distribution, storage, economy of assortment, transfer of ownership, after sales assistance and, in the specific context of car distribution, the retirement of used cars.

The complexity and speed of the context require the comprehension of which functions have the greater added value and need more focus: in our opinion especially these four.
The first is promotion, that is the ability to express a real grip on the target market. It’s important to understand if the dealership has the real active strength (control of the digital space, growth of a Business Development Center leveraging on clients already acquired) or it only acquires leads intermediated by others.
The second is risk management, in other words the trading capability that consists in a mix of strength and speed to intercept the opportunities of purchase and resale, often acting as a space-time lung of productivity.
The third concerns economies of assortment in other words being ‘window’ and ‘shop’ meaning having what the market wants, contextualizing it, developing up-selling and cross-selling while conquering the customer portfolio. This asks for the ability of display, merchandising, curatorship.
The fourth is after sales assistance that in a context evolving from product to service becomes always less ‘after’ and always more customer care, that is the constant ability to listen and talk through more frequent and differentiated touch-points.

This remix of focus must be done by balancing human, digital and business factors. The human factor is related to attitudes and behaviors: interesting fact that, according to the recent customer study of Quintegia, in visiting a dealership competence and politeness of staff are more important than pleasantness of the location. This proves that customers are more interested in the ‘soft’ components of the interaction. The digital factor entails the ability to foster a physical-digital synergy. Data show that a significant share of clients would like to do some activities online, such as booking a test-drive (33% of customers), verifying the actual availability of a specific vehicle (26%), asking for a quote (24%). Just think that over two-third of customers would be open to a mainly online purchase, and in this opening carmakers and dealers are among the top preferences. The business factor concerns the necessity of switching from a logic of product to a logic of service, with the construction of a different posture (processes, people and so on) joined with a different system of indicators. The real revolution lies in the ability to remix the business rather than turning it upside-down, managing to guide the entire organization towards the wished direction.