While the automotive industry is experiencing digital innovation, research still suggests that consumers like visiting dealerships. A recent study indicates that 75% of car shoppers believe visiting a dealership to test-drive a vehicle is essential in their buying process, and 69% prefer to negotiate on price to receive the best deal.
Why is this important to know? It’s simple—the in-person dealership experience still provides immense value. However, that value is only associated with specific tasks. That means your dealership should continue to focus on and enhance particular parts of the face-to-face interaction. But for many steps in the car buying process, you must start considering the role technology should play.
Several automotive technology trends are shaping various parts of the sales and marketing process. If you want your dealership to remain competitive, you need to keep an eye on the tools changing the way you do business. For insights on the top innovations impacting your industry, here are five automotive technology trends to remember.
1. Online sales are increasing
This trend shouldn’t be too surprising. There are hundreds of articles explaining the growth of online car sales, but that’s because this trend continues to make positive gains.
According to a recent study by Cox Automotive, 55% of customers have transitioned to an online car-buying process. Over time, that number will increase, especially as CarMax and Vroom grow in popularity. So, if you want your business to attract some online car sales, you should start taking steps to handle the digital sales process successfully.
2. Personalization is a priority
Another study by Cox Automotive reveals that 72% of U.S. auto dealers and 67% of car buyers think personalization technology, such as automation and artificial intelligence (AI), will enhance the car-buying process. Targeting consumers with personalized recommendations is in such high demand that, despite people’s weariness of providing their personal data, 68% of consumers surveyed said they wouldn’t mind dealerships using personalization technology if it leads to a better car-buying experience.
The only problems hindering dealerships from moving forward with automation and AI are employees who are resistant to change, processes that aren’t set up for personalization technology, and a high price point that doesn’t seem worth it. These obstacles may be thwarting you, too. But if your dealership wants to sell more vehicles, you must overcome these challenges. Around 76% of car buyers expect auto dealers to know something about them before they hit the showroom floor, and failing to do so might cost you money.
3. DMV tasks are happening online
What’s one place most people dislike dealing with or visiting? The DMV. Completing anything at the DMV takes a while. Typically, you have to stand in long lines, find the right forms to fill out, speak with unenthusiastic workers, and wait weeks until you get what you need. This process is complicated not only for car buyers but also for dealerships.
Trying to complete the paperwork for a customer’s license plates, vehicle registration, and tags can take what feels like ages. And car buyers are typically not happy about the long wait time. That’s why dealerships are starting to complete their DMV tasks online by working with private DMV services companies like Barry Risk Management.
These types of businesses approach the DMV digitally. For example, when a dealership makes a sale, private DMV services companies will gather and complete the necessary forms to retrieve the customer’s license plates, vehicle registration, and tags—and they’ll do it all online.
This digital process speeds things up significantly so that customers get what they need in a timely manner, and it empowers dealerships to work on more critical tasks while the private DMV services company handles the paperwork auto dealers don’t want to touch. So, if your auto company wants to make the DMV experience great for customers and your sales team, using a private DMV services company should be your next priority.
4. Cybersecurity is gaining momentum
Since many processes are shifting online, cybersecurity upgrades have become more and more essential. Online commerce means there’s an increased risk of fraud, hacking, and cyber threats, and that risk affects dealerships and customers. Decreasing the potential of nefarious activity has led many dealerships to partner with cybersecurity experts, who help ensure auto dealers have safe, protected digital transactions.
One tool that’s been beneficial, in particular, is secure payment processing solutions—these offer fantastic security features that protect businesses and consumers. Other tools gaining traction are touchless payments and PCI DSS compliance, both of which deliver additional security for transactions. Having all these tools in place is a great way to give your team and customers peace of mind during a sale, so take time to beef up your cybersecurity if you haven’t already.
5. Electric vehicles are in high demand
One tech trend that’s impossible to ignore is the demand for electric vehicles. These cars continue to increase in popularity and gain market share. In Q1 of 2022, electric vehicle sales in the U.S. hit a record high of more than 200,000 vehicles. According to Experian, registration for electric vehicles also surged 60% in the first three months of 2022, and consumers’ interest in purchasing an electric vehicle has increased by 70% since January.
Some factors driving this interest in electric vehicles are improved performance, clean energy, and high gas prices. Experts predict the demand will continue to remain high, so much so that 70 million electric vehicles will be on the road by 2023. If your auto dealership wants to cash in on this market, you should start putting more electric cars on your lot.
The Next Level
Every business has to evolve to keep up with consumer and industry trends, and your dealership is no different. To continue succeeding in a competitive environment, your team must implement the latest technologies shaping your industry. Only then will you reach a new level of business where sales are consistent, car buyers are happy, and your company is equipped to deliver the best experience possible.
