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Dealership death knell? Not for any we know.


I was reminded of Mark Twain’s adage about the exaggerations of his demise when I read this Forbes article the other day.

Discussions about the “death of the dealership” are almost legion, with pundits weighing in from all sides.

As someone who works with the leading automotive dealerships in the U.S. and Canada every day, here is my assessment: Automobile dealerships aren’t going anywhere. 

Which is largely what Mr. Singh, the article’s author, a senior partner at analyst firm Frost & Sullivan, and one of the leading voices on automotive trends, is saying.

We all agree that automotive retailing is changing and I believe for the better. In many cases, much better.

Singh is largely positive about the survival of franchised and independent automotive dealerships,  and outlines several key findings from a recent Frost & Sullivan research report, “Executive Outlook of the Future of Automotive Retail.”  The report discusses what the analyst firm believes the industry needs to do in coming years to continue to grow.

To be clear, many of Singh’s recommendations are major investments, either by the dealership or the OEM. They include significant capital investments geared to providing a premium consumer experience, an increased use “big data” analysis to better understand consumer behaviors, and a wholesale shift from OEMs simply selling cars to “thinking of (selling) cars as a service model.”

One key piece of Singh’s argument addresses something we’re well aware of here at DealerRater. That “staff will always play a crucial role in any sales environment…(and that) training needs to focus on using digital retail tools effectively…”

Yet, while OEMs and dealerships have spent considerable sums on product, on research, and on stores and websites, they have invested comparatively little marketing the sales and service personnel that customers will be working with once they arrive at the dealership.

I believe that marketing individual salespeople is going to be as important as putting a picture with a car on an inventory page. That incorporating the type of digital tools that Singh speaks of can allow dealerships to showcase their top employees and allow them to connect with in-market shoppers earlier in the sales process than ever before to build trust, lower apprehension, and accelerate successful showroom visits.

Increasingly, dealers I talk to understand completely the need to bring their collective games up, which is really what Singh is hitting on.

What’s most interesting to me is that more and more dealers realize that focusing marketing dollars promoting  top-performing and highly-reviewed employees will allow them to reap real benefits in the months and years ahead.

Here’s to the continued importance of the automotive dealership as a critical piece of the car-buying journey.