COVID-19 and The New Face of Retail

By AM Strategies Founder & President, Kathy Cunningham

Given the recent warped-speed changes in marketing conditions due to COVID-19, and my recent podcast discussions with Allyson Witherspoon, Vice President of Marketing for Nissan USA, I thought it was appropriate to update my blog from late 2019 on the customer experience with new insights into the tectonic shifts marketers must master to survive in this COVID-19 era.

I learned from Allyson how Nissan came together as a team using ingenuity and a scrappy, can-do attitude to support the nation and its customers. And how skunkworks type projects gave way to radical innovation in a time of crisis to quickly retool and produce Personal Protective Equipment.

Nissan’s example of leadership and nimble problem-solving shows the importance of cutting through the normal layers of management and react quickly to take advantage of opportunities during a crisis. We are experiencing an exhausting pace of change. Marketers will need to adapt and retool their strategies to prepare for a robust future.

Nothing has been more top of mind in the automotive industry than the customer experience. The recent government lockdown has forced an accelerated ramp-up of digital retail tools to survive the times. As a thirty-year veteran of the industry, I can attest to the urgent need for change and the danger in holding on to old ways of selling anything moving forward.

Modern Strategies – The Future of Consumer Experience

Not only is the consumer in the driver’s seat, but now with concerns about social distancing, we have the perfect opportunity, or the perfect storm, from which to embrace the types of strategic experiences that will engage the new customer in a post-pandemic world.

Strategies like live online events and individual messaging using personal data will replace traditional gatherings and guerrilla marketing techniques. Showroom conversations will be replaced with omnichannel communications, video chat, virtual walkarounds, transparent price negotiations, aftermarket shopping baskets, solo test drives, and at-home deliveries.

But more importantly, these modern tools and consumers will require modern-thinking leaders who will build modern teams. And develop new processes to properly handle the follow-up and engagement of the new normal. Modern tools in the hands of old-school management will squander the opportunity and waste a lot of time and money. It only makes sense that the modern salesperson should be more adept at listening. Follow the prospect’s pace and preferences. Pick up on sublet ques, and assist in the shopping journey rather than dictating the process.

What Consumers Want, Consumers Get

Let’s look at the new retail customer. Marketing Over Coffee Podcast​ talks to the author of Flip the Script and Pitch Anything by Oren Klaff. “People don’t want to be sold to anymore, he says. They want to shop and gather the information themselves. Compare and verify it, and then come to you.”. When consumers decide on their own, you are the best choice for their shopping experience; they are much more likely to close a sale with you and then also refer their friends and family to you.

So, in general, the retail customer is in control. And automotive brands that embrace the power transfer will develop a business plan which focuses on a unique buying experience and brand promise rather than around the price. Why? Because players like Amazon, Tesla, and Carvana are disrupting the automotive industry and reshaping customer expectations in a big way. The shift that began to gain momentum last year has now reached a tipping point because of COVID-19!

Challenging the Traditional Role of the Middleman

Just like in the travel and taxi industries, new players are entering the space, and the middleman is getting squeezed out. Franchise laws protect the new car dealers’ position between the manufacturer and the customer. However, with the increasing availability of information, online consumers are well-versed in what car dealers are selling, making, and not disclosing to the public.

Even though they are armed with knowledge, consumers sometimes feel they have no power and no alternative options for buying a car. That feeling creates a space for companies like Carvana, Tesla, and Roadster to disrupt the ecosystem. Providing shoppers with an alternative digital experience that empowers the consumer with new tools to control the buying process themselves. Which begs the question, if you could buy a car without going through a traditional dealership experience, would you? More and more consumers are saying, yes!

This traditional model has meant that the retail dealerships have control over the vehicle transaction and use a high stakes pricing strategy to capture shoppers’ attention and win sales from the competition. Focusing solely on price, over time, drives profits and brand value down. It drives up competition between dealers, and sets the consumer up for a stressful negotiation of, “If I could/would you today?”

The New Retail, A Look Back into the Future

There is a tremendous opening for the first dealers to take advantage of the opportunities to fill the giant hole in the customer-centric dealer space and add value to the coveted middleman position in the transaction.

Last October, Automotive News featured one of the first dealers embracing the new retail in an article, written pre-pandemic, about how ​Jason Quenneville, General Manager of White River Toyota, built a customer-centric sales process for his dealership that honors his employees and his customers by simplifying traditional operations. His dealership has:

1. Eliminated all but one lender from the finance process
2. Merged the Business Development Center and Sales departments, allowing salespeople to follow the consumer through the finalization of the sale
3. Recorded video tours of its cars so consumers can preview them online
4. Eliminated interest markups
5. Displayed vehicles in the lot by model
6. Closed the interest rate gap between Caucasian customers and minority customers

In addition to these unconventional administrative evolutions, Quenneville instituted a Master Key system. His salespeople supply keys to customers that will unlock any car in their lot so that they can test-drive any model at their leisure! As a result, White River Toyota’s sales went up 63% from 2014. The dealership made more money than the average in the area. And salespeople were employed longer than the average salesman in the industry. Quenneville addressed the major pain-points in dealerships and cultivated a comfortable environment for his staff.

This kind of disruption, a year ago, took tremendous courage and leadership. And having personally gone through a similar change, I know it also takes a strong team commitment to leave behind the traditional ways of the automotive world.                           

Ask yourself this – what changes are you making at your dealership that make the buying process more customer-centric, fun, fast, easy, and transparent?

The New Face of Retail Sales

One way to change the buying experience is to hire a different kind of salesperson. I recently attended a conference for Women in Automotive, which featured the fabulous women who work, thrive, and love the industry just like me. Almost a thousand women gathered in Orlando, Florida, in June. I had the honor of interviewing Amanda Hoffman, the Everywoman Award Winner, who represents the new generation of automotive salespeople.

Amanda talked about how she fell into an automotive sales position coming from corporate America. What’s fascinating about Amanda’s story is she had the skills, drive, desire, and the need to make a living in the automotive industry. However, her sales floor story began with the rejection she felt from an all-male staff and how they mocked her appearance, sales experience, and courage to be a top performer. One veteran salesperson even wagered his entire year’s salary that she would never beat him in sales. It did not take her long to prove him wrong and become the top salesperson in the dealership.

Amanda wasn’t burdened by any old fashion ideas on how to sell cars. She brought her personality and her experience as a mother to the selling process. Focusing on personal relationships first and sales second. She also brought a youthful energy to the process, taking advantage of social media and texting, to open new lines of communication with her customers and make them comfortable with the sales process. As a result, she sold cars to people who the number one salesman wouldn’t even have talked to. This kind of authenticity, coupled with her commitment to working hard every day, helped drive her exceptional results. I think she’s proving how you can disrupt the industry from the inside.

Marketing a Customer-Centric Omnichannel Brand

When I first wrote The New Retail: How Customer-Centric Experience is in the Driver’s Seat, in October 2019, about opportunities the automotive industry and what other retail marketers should prepare for in the new normal, I had no idea how prolific my thoughts would be.

I said, “today, marketing is an omnichannel game. It must be branded throughout all touchpoints, but also fluid so that a customer’s experience can transfer seamlessly from your website to your brick-and-mortar dealership. The customer’s experience should be the same whether they choose to complete the sale online, or in your store. And their information needs to travel with them so they can pick up where they left off in the purchasing journey.”

Those who got a head start on developing a customer-centric process, hired the new face of retail, and embraced e-commerce and digital shopping tools are better equipped to kick into crisis management mode and adapt their marketing and messaging in real-time. They are the marketers that will survive this pandemic and thrive in the new normal.

Could you use some guidance on the development of your customer experience post-COVID-19 from the Internet to the showroom? At Advanced Marketing Strategies, we’ve been there and done that, and already seen the revolution in action. We helped shape a customer-centric experience from branding and marketing – to the showroom floor and guided the development of one of the most revered automotive brands in the country. If you’d like to hear about how we can help lead your team through the process of changing your customer journey and build a marketing strategy with omnichannel brand experience, give us a call.

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