Auto retail is very different from high street retail in many ways, after all the consumer only makes a purchase every three years or so but there are many useful techniques to be learned from the high street. Used car sales is going to play an increasingly important role as we go through the pandemic and come out the other end. You will need to get this right to do well.
Business Lessons for Car Dealerships
Consumer tastes change all the time, and the retailer must match these changes to maximise sales and margins. One of the greatest recent changes in used car sales has been the demand for lower priced cars in the range of £5,000 to £10,000. We are told this demand is from people that used to travel on public transport but feel unsafe to do so now. Were you stocked up with cars in this category as the demand grew?
The first to the auctions with the right shopping list got an edge on other dealers. A good high street retailer wouldn’t have missed this opportunity. They do this by tracking Top Sellers and Rate of Sale. If they didn’t have enough stock in the first place to see this trend in Top Sellers, then they track the rate of sale and higher rates of sales are highlighted. With automotive analytics this is possible for you to do too.
Learnings From The High Street and Car Sales Techniques
Cash is tight and you need to do everything you can to make it work for you. The best high street retailers are very good at dealing with slow moving stock. With dealer business intelligence you can do this job too. You are already good at identifying new vehicles that are near adoption but with the proper tool this becomes even easier to identify and action. Often, we find franchise dealers aren’t as good at identifying and dealing with used vehicles that have been too long on the forecourt.
One of the ways retailers manage this problem is they proactively move stock to where it is needed. The dealer management dashboard from Real World Analytics (RWA) knows how many spaces are available in the showroom and forecourt in every outlet. It knows what the rate of sale for every model is and suggests transfers to where the used vehicles are most likely to be sold - see transfer graphic in fig 1. Without this tool, too often one of the stores goes off to the auction and buys vehicles that you already have in stock elsewhere.
(Figure 1 - Transfer Potential)
You might think that stock management in Parts would not present many problems due to the short supply chain. However, following the installation of RWA’s automotive data analytics solution / system old stock is found lurking everywhere. Often a few high cost items that should have been moved to another garage are the culprits.
Fashion retailers are great at getting the right stock in for seasonal purchases. The Dealer Management (DMS) system was never constructed with this in mind. Your supply chain may be much shorter but when winter comes, do you have those parts that tend to need replacing then? A basic replenishment system such as pack replacement or setting minimum and maximum levels will cost you in cash when they are not needed and will cost you in sales and/or customer satisfaction when they are not in stock.
This is just a few of the areas that a high street retailer excels and there are others. There is always room for improvement in auto retail but in times like this when there is more change and a greater need to be more efficient, then you need to act. RWA offer a free data audit to CDK Rev8 and Drive customers. A free data audit is now available to Pinewood Pinnacle DMS users too. Call us today to organise your free data audit.
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Real World Analytics delivers the right information, at the right time, to the right person to make strategic decisions to improve overall efficiency and profitability in the business. Enabling automotive dealer groups to increase their profitability with cloud solutions by unlocking actionable insights using their data.