The COVID-19 pandemic has created a new normal for businesses, resulting in many independent dealers making adjustments to their sales strategies. One of the fastest growing adoptions for this group has been digital retailing which is currently being utilized by 47% of independent dealers.* This business model allows dealers to effectively manage their inventory while reducing the risk of exposure to COVID-19. Here are some tips for implementing digital remarketing tactics into your current business plan so you can continue effectively moving metal off your lot:
- Reduce cost by monitoring inventory – If you’re using a floor plan, keep an eye on the number of days your vehicles have been sitting on your lot. In doing so, you can focus on offloading aged inventory first to help reduce fees and optimize profitability. Ben Footh owner of Footh Auto Sales in St. Paul, Minnesota says that he used the pandemic to make some changes to his existing business strategy including his inventory, “While my goal is to be aggressive and get vehicles off my lot as quickly as possible to avoid having to pay for extra fees or curtailments on my floor plan, I also want to be able to source new types of inventory so that if there’s a shift in market demand in upcoming weeks, I’ll be ready.”
- Consider alternative ways to offload inventory – Dealers who previously relied on foot traffic are now considering new methods like wholesaling to offload inventory. Whether you decide to market a vehicle for wholesale or retail, you should be knowledgeable on the valuation of each of your vehicles and keep updated on any market changes due to increased competition. Being able to act quickly on a potential sale is a key tactic that dealers need to embrace to prevent inventory from sitting on their lot.
- Invest in online tools – Besides embracing online auctions and posting inventory on your website, dealers need to utilize tools like the Manheim Express app which allows them to quickly and easily list vehicles to Manheim’s digital marketplace which has the largest digital buyer audience in the industry. Apps like these widen your customer base and create a user-friendly method of creating a digital listing, including 360-degree images and detailed information on each vehicle, expediting the sales process.
- Keep an eye on vehicle demand – Consumers needs and preferences have shifted since the start of the pandemic. Vehicles that are priced $10,000 or less are expected to be in high demand through the summer as car buyers have become more budget conscious due to an unstable job market. Vehicles such as pickup trucks that consumers used to shy away from have also gained in popularity due to the significant decrease in the cost of gasoline over the past few months.
- Investigate new revenue streams – Now is the time to consider offering additional services that may have once seemed like a luxury to help increase revenue coming into your dealership. Customers who are cautious of venturing out will gladly pay extra for services like mobile maintenance which is currently being offered by only 11 % of independent dealers.* This service allows customers to get maintenance like oil changes done without having to leave their homes. Deep cleaning or sanitization services are also quickly growing in popularity and can be an additional sales enticement for customers who may be on the fence when it comes to purchasing a used vehicle due to health concerns.
By staying on top of the latest trends and research you can make informed decisions that will both give your customers some piece of mind and also increase your chance of running a profitable dealership during this uncertain time.
*Source: 2020 Cox Automotive COVID-19 Dealer Impact Study