We are giving a lot of thought currently to dealer digitalisation – thinking primarily about integration of data processes and related IT, and exploiting that data and the broader digitalisation of the customer buying journey and online marketplaces to make better decisions.
That in itself is a significant challenge as most dealers are sitting on a range of legacy systems to which they have added various point solutions over the years, and then manufacturers have come along and ‘encouraged’ or mandated the use of other applications to meet their process and data capture needs.
The resulting picture is highly complex – one UK group identified over 400 individual applications within their environment – and deriving value from that in terms of better decisions or operational efficiencies is correspondingly challenging.
Dealers are at different stages of mastering that challenge. I am not suggesting that any (many?) dealers are still in the stone age, but there is undoubtedly a spread between those who still see IT as a necessary evil, and those who see how fundamentally it has increased their reach, opening up a digital showroom that one investor I spoke to included in his dealership count, and said that it was his most important.
In my view the distribution model is moving from one that is digitally enabled to one that is (or should be) digitally driven. That is not to suggest that people become unimportant or irrelevant, just that the data available gives the opportunity for your staff to be more productive, and for your customers to have a more tailored experience.
As society and business now seems to be moving on from ‘digital’ as the buzzword to ‘AI’, automotive retail needs to move on in turn.
It is easy to dismiss AI as just a fad, something that does not apply to your business, but it is not a choice that is entirely yours to make as a manager or even owner operator. The products that we sell are starting to incorporate AI in features like driver assistance, and it will become embedded in diagnostic tools that you use in your workshop – whether you choose to sign up or not.
Your employees will also be reading and experimenting in their personal life. I heard a news story this morning that over 90% of university students in the UK admit to using Chat GPT in some way to help with their studies.
That doesn’t mean that they are cheating – many will just see it as a way of improving their productivity in order to hit a submission deadline. However, when they join your business why should they discard a tool that has worked for them in the past, and is getting better with every month that passes?
You should not be passive with respect to the opportunities that are opened up through the use of AI in distribution in general or the dealer environment specifically.
There are some very specific tools that are emerging which are ‘AI inside’ rather than just a marketing label, and as with the evolution of man, you will be outpaced by competitors if you don’t embrace these new developments in an appropriate way.
When I have already suggested that some dealers are not fully utilising the basic potential of IT in their business, then adding an additional layer of who is exploiting AI adds a new level of complexity – but also suggests that the pace at which the best will open up a gap on those who have been slower to get engaged will accelerate. Whilst some are still walking, others might be running.
At the forthcoming Spring Members’ Meeting in a few weeks, we are pleased that MotorK, one of our members and familiar to many in the industry in a number of markets including their native Italy, will be presenting a ‘state of the nation’ view of where AI sits today and where it will develop in our distribution world in the coming years (or should I even say months…?)
We’re keen to get a baseline or where businesses sit today in terms of their use of AI in dealerships and what they believe it will do for business performance in future. It would be great if you could complete the short (9 question) survey and share your perspective.
You will find the survey here and we will share the results in the Spring Meeting and also on a later blog. (Please don’t cheat and use ChatGPT to complete it!)
Steve Young is MD of ICDP