The COVID-19 pandemic has hit many of us very hard. From healthcare workers on the front lines fighting for supplies to keep their patients alive to restaurant and freelance workers who have lost their jobs with businesses closing or operating close to the bone.
If one business is dealing with this pandemic the best way they can, it’s the automotive retail and service sector. Already, they have been faced with some extreme challenges in order to stay in business.
Some states have deemed automotive businesses as essential. Therefore, anyone from the service bays to the showroom is available. There had been some adjustments to accommodate customers based on social distancing and self-quarantine rules in place by the government.
Yet, the challenges have been daunting. Automobile manufacturers have reported that their March sales have taken a hit of over 37 percent compared to the same month last year nationwide. First-quarter sales also dived for most manufacturers, with March deliveries contributing to their losses. This also affected first-quarter earnings at many manufacturers.
How have these events affected the automotive retail business in our area? We asked Bill Bertrand, the General Manager of Morrie’s Chippewa Valley Mazda in Chippewa Falls, Wisconsin that same question. In one example, Bertrand explained that he had “20 salespeople on the show floor two weeks ago.” He had to furlough some of his staff but allowed others to stay “home to be with their families.” Bertrand further explained that “the number of people that we had working in the store, I think we just felt it wasn’t a good move to just keep the doors open.”
To adapt to state-mandated orders for people to stay home to flatten the curve on COVID-19 cases, automotive-related businesses had to adjust the way they did business. Some even had plans that were considered years before. Colton Ray, the Chief Merchandising Manager at the Walser Automotive Group, said it was a “great time to launch” the company’s “Walser To You” program. Instead of having to go to the dealership, the Walser to You program brings a specific vehicle you chose on their website to your home, office, or a neutral location whenever convenient. There, you can test drive the vehicle, make the sales agreement, and sign all of the paperwork right on the spot.
Prior to the sale, the sales staff at a dealership will communicate back to you either by phone, e-mail, or text. Ray pointed out that a customer can get a video of a “virtual walkaround by a salesperson.” That way, a vehicle the customer wants is shown as not only available but to see if there are any visible issues with that should be pointed out by the sales staff.
In Minnesota, you can complete most of the paperwork electrically. Ray said that Walser is equipped with a device that has a DocuSign-type of interface along with mobile printers for their staff to “print on the fly.” Walser’s strategy as a one-price dealership makes it easier for the customer to simply, as Ray states, to “click and order” on the vehicle details page. A customer can unlock the price on the car through the “click my deal” function.
However, Bertrand said that, because of Wisconsin’s laws, “there’s pieces of that include [a] paper transaction. There are safeguards online to verify. Most importantly, there’s a few areas of responsibility. There are just [some Federal Trade Commission] red flag rules that we have to follow, to verify that person’s identity. And all of that, really can be done online and over the phone. There is a paper part of that transaction. But in the particular case of the Chippewa [Mazda] store…for example, when we do a delivery like that, a sales manager is actually the person that’s going to their house.”
Walser, Morrie’s, and other area dealerships and service centers have been offering a similar service when your vehicle needs maintenance or repairs. A service employee will come get your vehicle from your home, office, or neutral location, and swap you with a service loaner until the vehicle is ready to be delivered with the work finished. Bertrand said that “probably 50 percent of our [service] appointments are drop off and pick up at this point in time.”
There are safeguards that had to be implemented by these dealerships in order to function through the pandemic. All of the dealerships and service centers stated that they were following the guidelines of the Centers for Disease Control when they work and clean each vehicle, as well as customer social distancing upon “contact.”
Ray explained that Walser has their service technicians perform a “video walkaround of the multi-point inspection and servicing.” The service department will send that video to the customer. Walser and other dealerships and service centers will text or call their customers to offer updates and even take payments on service as a way to keep the process contactless.
Why did it take a health crisis for the automotive retail business to start these initiatives towards contactless sales and service methods? Dayna Landgrebe, Manager of Corporate Communications at the Walser Automotive Group pointed out that “auto [retailing] has been a little slow to adapt” to this way of business. Landgrebe added that “many dealer groups assume the customer is changing, but we recognize the customer has already changed. We plan to incorporate Walser To You into our regular sales and service cadence to serve customers the way they want long after the challenges of social distancing and COVID-19 are past us.”
Today, these practices are now in place by the industry as necessary to stay in business as an essential service.
Perhaps the lessons these companies will learn from the COVID-19 pandemic will form the basis of the future of the automotive retail business.