Dealerships will likely evolve as Canadian customers do more of their own research at home and expect quicker and more transparent sales and service processes, recent data from Deloitte showed.
“Do we need the dealer palace, so to speak, anymore?” asked Ryan Robinson, automotive research leader at Deloitte, a speaker the Sept. 28 edition of the Automotive News Canada Retail Forum: Dealer Discussions digital event.
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“It’s getting increasingly difficult to make that kind of functional argument, if you will, for those giant dealerships, when consumers don’t have to be in the dealership anymore from either the sales or the service perspective,” Robinson said.
Customers are spending less time than ever in a physical store, said Robinson. According to Deloitte’s 2021 Ontario Automotive Consumer Study, more than four in 10 consumers who bought their current vehicles from dealers did so after only one visit. And more than half didn’t visit any other dealers.
Dealer websites, safety-related websites and manufacturer websites all ranked ahead of dealership salespeople when Deloitte polled consumers about what information sources have the greatest impact on their choice of vehicle.
Still, the vast majority of survey respondents said they would prefer to acquire their next vehicle in-person. The study showed that 79 per cent of respondents would want a face-to-face interaction at the dealership, compared with 18 per cent who preferred a “partially digital process” and three per cent who want a completely digital sales process.
But as customers do more research and other parts of the shopping process online, showrooms are beginning to change, often becoming smaller, said Silvia Carfora, CEO of the Weis Group, a Toronto-based automotive retail architectural firm.
“It’s becoming more of an experience center than it was a sales and information gathering place,” she said. “And we are seeing a lot more digital elements where customers can come in and customize their vehicle. So, it's a digital, interactive space.”
Michael Wyant, COO of the Wyant Group in western Canada, said that while showrooms will remain important moving forward, what customers see as they walk into them could change.
“Do we need to have showrooms built to accommodate every model of every vehicle that we sell? Or should we be doing things to enhance the customer experience when they arrive?” Wyant asked. “We know the vehicle that the customer's looking at before they arrive at our dealership. It's probably not the one that's sitting in the showroom. And there's a lot of things that that we could do to enhance that customer experience that [is] not part of our design today.”
Likewise, the service experience for customers could also evolve. The Deloitte survey showed that just 27 per cent of respondents indicated that amenities or experiences such as a kid’s playroom or coffee shop were important aspects of the service process, trailing far behind offerings such as rapid check-in and checkout and real-time updates on vehicle service.
Shahin Alizadeh, CEO of the Downtown Auto Group in Toronto, said one of his luxury stores was outfitted with a lounge and chef’s kitchen about 10 years ago, “in anticipation that there would be a trend” toward those amenities becoming standard. They haven’t, he said.
“I didn't, quite frankly, see the traction,” he said. “I didn't see people flocking to our lounge and saying, you know, give me your latest and greatest recipe of the day… I think maybe a dozen years ago, we all thought that was the trend. I no longer believe that there is any value in that.”