The days of management by gut feel are over
Amid all the change, there are a few key trends that we’re focused on, and where we can bring insight and improved business performance:
- Digital, everything, everywhere, 24/7
The automotive retail industry is embracing digital tools to provide shoppers and owners with an omni-channel experience, allowing customers to engage with dealerships on their terms. Some of this adoption was accelerated by the pandemic, but the underlying customer demand was already forcing this transition. OEMs and retailers need support with digital transformation — everything from process design to training to establishing KPIs and measuring effectiveness, to new job roles, required skills profiles and related pay plans, to recommendations of which tools deliver the best ROI and how to implement them effectively.
- Customer and employee experience, the new competitive battlefield
With product quality approaching parity across manufacturers and the size of both the new vehicle and service/parts markets approaching “peak auto” in mature markets like North America, the ability to attract and retain the best staff and customers will be the key to dealer profitability in the coming decade. The empowered consumer, the shift from ICE to ZEV and connected vehicle technologies like OTA updates necessitates an evolution in the form and function of the dealer’s role in the automotive value chain—from “seller” to “facilitator”. For example, the emphasis on hiring salespeople on a commission-basis is evolving to a new model which emphasizes digital, client service and consultative skills. And in service, software and electronic diagnostic skills are fast becoming table stakes.
- From automotive ownership to mobility services, the game is changing
While it is understood that our industry is experiencing the most significant transformation since the internal combustion engine, many organizations are uncertain of how to respond to these disruptive forces — seemingly on every front — product, retail, and the business model itself. As influential HBS professor Clay Christensen articulated, disruption displaces an existing market, industry or technology and produces something new, more efficient, and worthwhile — it is at once destructive and creative. New disruptors like Tesla, Rivian, Lucid, NIO, Apple and Waymo are encroaching on turf occupied by established automakers. The question is not whether ZEV will replace ICE, or whether autonomous technologies will be adopted to move people and goods. The key questions are when, how and who will find the best solutions to deliver on customer expectations for safe, clean, and affordable mobility?
- Data is the new oil
The days of management by gut feel are long over. In a complex and rapidly changing world, organizations must leverage data — their own and data available from trusted partners — to inform decision-making in real time. Keeping abreast of how customers are experiencing your product or service is a key organizational imperative. And this is especially critical in the automotive and mobility worlds with rapid technological change and customer expectations which are evolving daily, shaped outside our industry by shopping and ownership experiences with leading brands like Amazon, Starbucks and Shoppers Drug Mart.