Tag: Inventory Management

How to Thrive Against Top Dealership Challenges

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Do you have what it takes to thrive against the competition? With threats against your bottom line, people poaching your top talent, and inventory dwindling every time you take count, it might feel like the challenges facing your dealership just keep adding up! Discover the Top Seven Challenges dealers are facing and How to Survive Them. Here are just a few…

Supply Chain Shortages

It’s no secret that inventory is taking a hit from industry-wide supply chain shortages. But the real “kicker” is how it’s impacting buyer habits. Up to 48% of potential buyers are hanging onto their vehicles longer and longer and postponing their next purchase due to low vehicle inventory.

Consumer Data Challenges

You use data to uncover shoppers most likely to buy. Yet, outdated CRM data might just be your worst enemy to date. Find out how thriving dealers are utilizing the right data to match deal-to-buyer and win against their competitors.

Changing Buyer Habits

Two out of three buyers surveyed in our study are likely to buy their next car 100% online. The future of digitization in retail automotive is here. How prepared is your dealership, and your staff, to meet the needs of these new buyers?

Discover the Seven Tips for Surviving and Thriving—Learn How.

Yes, You Still Have Inventory Issues

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Inventory acquisition challenges were a huge headache last year. And, as luck would have it, they are a pain in the neck this year. Unfortunately, this industry-wide problem is still having a profound impact on profitability. And while some dealers are choosing to “wait it out,” smart dealers are finding strategic ways to succeed now. We’ve pooled the data from the past eighteen months that looked at best practices from thriving dealerships and practical solutions for inventory challenges. The resulting five operations strategies will help you and your entire operation overcome your inventory obstacles and supply chain challenges before it’s too late.

Operational Strategy 1 – Aim for Departmental Cooperation

Your target? Tear down the traditional silos creating division, confusion, and disconnection! Your best tools for this strategy are going to be communication and data to spot opportunities, target trade-ins, and acquire vehicles. Ask yourself, are you potentially missing opportunities because you’re not collaborating across teams? 33% of thriving dealerships use cross-departmental data to spot opportunities.

Operational Strategy 2 – Adjust Your Processes

It’s time to make a plan. Inventory acquisition goals need to be tied to details about pay structure and approaching customers. Rethink your current pay structure and set new, and exciting, goals around bonuses to help drive acquisitions for all team members who play a role in the process.

According to research from Cox Automotive, 50% of thriving dealers utilize activity tracking for customer web and search history.

Operational Strategy 3 – Create Useful Reports and Measure Analytics

The information you’re tracking can help your dealership succeed. According to research from Cox Automotive, 50% of thriving dealers utilize activity tracking for customer web and search history. Don’t just rely on your gut—use data to determine which used vehicles are in high demand. Then, share the data with your team to be on the lookout for these cars when they come across your service lane.

Operational Strategy 4 – Time to Team Up!

In addition to the very frustrating and very real issue of inventory shortages plaguing your business, you still have to deal with…well, your business. Retail automotive often faces more than one challenge at a time (like keeping your top talent and fighting the data war). So, your best bet is to partner with a provider who has your back. If you’re going to improve your numbers, make sure you’re working with an expert who can help you optimize your reporting and get to know your technology inside and out.

Operational Strategy 5 – Think Big(ger)

A simple shift in approach may not hit the mark. To overcome the challenge of inventory shortages, you’ll need to get your marketing, sales, service, and operations in sync. Cox Automotive delivers first-party transactional data from Autotrader and Kelley Blue Book allowing you to connect workflows across all departments. This dealership-wide approach ensures your entire business is protected from this—and the next—challenge.

To learn more about these strategies and other tips for acquiring inventory, check out our guide, “Operational Solutions for Inventory Challenges.”

 

 

 

Tips for an Ongoing Inventory Crisis Plan

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Sometimes, a threat emerges that takes everyone by surprise. You may have handled the past two years very well—and high customer sentiment is proof—but an ongoing inventory crisis is testing dealers like never before. So, what do you do when your lot is looking bare, your inventory is lean, and you can’t sell your way out? With car volumes at 43% below 2020 levels, it’s time to formulate a plan.

Tip 1: Use Data to Make Inventory Decisions

You’ve been in business long enough to understand the value of data when making important decisions. Data can help you know where to look for cars, which models to go after, and how to price used inventory. The data that your dealership already has on its previous sales and on shopper interest—search volumes on your own website, for example—will teach you which used cars are most popular and which could be most profitable.

Tip 2: Source inventory From Everywhere

Armed with the knowledge of which cars are in demand, you can use your database and your customer records to find current owners of those cars who might be motivated to sell. Specifically, look at upcoming lease expirations and reach out early to begin discussing trade-in options. You can also find inventory by mining recent digital retailing leads with trade-ins attached. Finally, look through your database of existing customers for repair-weary owners who might be ready to sell—those who have recently made service appointments or declined service recommendations, for example.

Tip 3: Rethink Your Marketing

During periods of lean inventory, many dealers decide to cut back on advertising or cut it out altogether. While it might be tempting to try and save some marketing money while you have fewer cars to sell, the strategy generally backfires. In fact, companies that cut their advertising during the pandemic saw a 7% drop in leads while those that continued saw a 2% increase. Instead of eliminating your ads, focus on adjusting the message to focus on vehicles with more availability. You can also pivot your promotions to cover used inventory, vehicle service, and “we’ll buy your vehicle” campaigns.

By now, you’ve learned to deal with just about every challenge this industry could possibly throw your way. The current inventory shortage, brought about by global supply chain disruptions, is also nothing you can’t handle. By following these tips, and by getting a little bit creative, you can develop a cross-departmental strategy that keeps your profits high even as inventory is low.

 

To learn more dealership survival tips, including more information about how top dealers are thriving in today’s environment, download our eBook, A Dealer’s Guide to Dealing with (Almost) Everything.