If you need convincing that digital transformation is real, just take a look at the evolution in the big shopping malls near you.
Dozens of malls have closed in the last 10 years, and many more are at risk of shutting down as retailers like Macy’s, JCPenney, and Sears — also known as anchor stores — shutter hundreds of stores to staunch the bleeding from falling sales.
The commercial-real-estate firm CoStar estimates that nearly a quarter of malls in the US, or roughly 310 of the nation’s 1,300 shopping malls, are at high risk of losing an anchor store.
When anchor stores are boarded up, traffic to the retailers in the middle sections of malls tends to decrease. That has been happening at shopping malls nationwide, and now many retailers are going out of business and closing their stores as a result.
Within the last couple of months, several mall-based stores — including American Apparel, Abercrombie & Fitch, The Limited, Bebe, BCBG, Michael Kors and Wet Seal — have announced mass closures.
Automotive retail is not immune to this retail apocalypse.
As someone who’s been an attentive observer of the retail automotive business – first, because I managed dealerships and, of late because I provide dealers with profit performance advice – it’s fairly easy to see that the days of big automotive dealerships and auto malls are not long for this world.
What will replace the experience of a behemoth store with a sleek, technology-driven experience?
It’s difficult to say exactly what it will look like but the ONE thing you can count on is that customers will still expect dealers to accommodate their needs.
Most dealers agree that a digital transformation is necessary to remain competitive, keep pace with disruptive technologies and evolve with shifting consumer expectations. Still, many are unsure of how to start the process, or even what it entails.
eMarketer defines digital transformation as the process by which business leaders harness the capabilities and advances of emerging technologies to digitally reinvent their company’s operations, products, marketing, culture and goals for future growth.
95% of pre-purchase research begins online.
The phrase “digital transformation” can conjure up a lot of apprehension and fear. It doesn’t have to if dealers and manufacturers pay closer attention to the evolving consumer preferences.
As it stands today, dealers can accommodate customers preferences by meeting them where they are with original, helpful, high-quality content via their websites and social media.
Where should I start when considering digital transformation for my store?
The sad state of user experience on dealership websites must be addressed.
There are some really poor dealer websites out there and I hope yours isn’t one of them.
FACT: Your store is not the hero, your customer is.
According to ChartBeat, dealers have between 5 to 30 seconds to hold the attention of a buyer. In other words, if you can’t communicate your value in less than 30 seconds, you’re losing out on a sale.
2. Social Media and Content Strategy.
Social media strategy defines how a dealership will use social media to achieve its business goals, including the supporting platforms and tools it will use to achieve this.
At a basic level, it’s a statement of intent, outlining the goals and measurable objectives for using social media, and the target outcomes you want to achieve.
3. Operational Restructure.
Every dealership of the future will be a social business. Steps must be taken to adapt the “bricks and mortar” mentality into an e-commerce model. Every position at the dealership should be examined for viability in the digital transformation.
Employees are integral to digital transformation.
- Restructure processes that meet customer expectations.
- Frictionless transactions.
- Engage employees in content creation
- Supply a workable social media policy
4. Examine Out-Dated Processes Impeding Performance.
Let’s face it – retaining profit has never been easy.
I can remember back in the late nineties when I managed a group of high-line stores, we were up in arms about the factory squeezing margins and it’s not really changed since then. What has changed is the pressure on the dealership business model.
With changing consumer preferences, and digital properties even more relevant, it’s never been more crucial to restructure out-dated processes and adhere to dealership profitability best practices.
The customer is in charge and they’re looking for frictionless experiences. The auto industry has now had nearly 10 years to listen to consumer preferences and has done very little to adapt and accommodate. Disruption is at the door and now it seems everyone is scrambling.