The National Association of Minority Automobile Dealers (NAMAD) show in Miami, Florida was an enormous success, and if you attended, you know exactly what I’m talking about. The energy was electric, because the potential for independent, local dealers is so great at the moment. Certainly, the market is changing, and various forces and technologies are disrupting the market. But that doesn’t have to be a bad thing. If you watched Game of Thrones, you may remember Littlefinger’s philosophy: “Chaos is a ladder.” He was a cynic, but the point holds true. When disruptive forces change the status quo in a market, it can be nerve-wracking, but it’s also a tremendous opportunity.
At NAMAD, a recurring theme emerged from my conversations with auto dealers, and even some OEMs, the automotive industry is experiencing a significant shift towards online car buying. This trend is gaining rapid momentum as consumers increasingly prefer the convenience and efficiency of digital transactions. Notably, the younger demographic shows a strong inclination towards this modern approach to vehicle purchasing.
Recent data underscores this growing preference for online car buying. A 2023 survey reveals that 80% of car buyers are now open to purchasing vehicles online. Furthermore, industry projections paint an even more dramatic picture of this shift. According to a study by Astute Analytica, the global online car buying market is expected to experience exponential growth, reaching an estimated $885.1 billion by 2032, a remarkable increase from $304.7 billion in 2023. This substantial growth forecast highlights the increasing importance of digital platforms in the automotive retail landscape. Today, many buyers know the exact vehicle they intend to buy — not just the make, model and color, but a specific car, truck or SUV — and exactly how much they’ll pay for it long before they set foot on the showroom floor.
Additionally, though interest rates are coming down, dealerships say they’re still high, which is driving many potential buyers to hold on to their current vehicle in hopes that rates will fall further. Meanwhile, margins have become compressed, so the dealership makes less money on every sale.
As a result, volume sales can no longer be the sole strategy for driving revenue. Walk-in customers are still out there, but they’re not enough. Dealerships have to build relationships with customers that continue to grow long after they’ve driven off the lot in their new vehicle. This encourages repeat sales, but perhaps even more critically, these relationships encourage customers to come back to the dealership for additional services like repairs, maintenance, and additional vehicle accessories.
Conversations and solutions: A mobile app for connected cars from Ikon
We heard from plenty of dealerships looking for solutions, and had plenty of conversations about how Ikon could help them:
- Overcome the challenge of compressed margins in a very competitive market
- Keep customers coming back for repeat sales
- Increase the volume of additional services
- Stand out from larger competitors with a branded presence on customers’ mobile devices
Ikon’s flagship solution is a connected-car app where the dealership’s name is right there on the customer’s phone. Given how often consumers use their mobile devices, this could mean as many as 15 impressions per month for the dealership — imagine how much advertising you’d have to buy to reach that level of awareness. And the great part is, these consumers already have a relationship with the dealership.
Consumer services from the app
Why would a customer want to download your Ikon-powered app onto their device? There are many reasons:
- Stolen vehicle recovery protection: Ikon can help consumers recover their stolen car, and, if that’s not possible, there’s a $10,000 warranty that’s paid out on top of whatever insurance will provide.
- Track key indicators like car location, speed, mileage, trips and more: Customers will never again spend hours searching for the place they parallel parked in a strange city, and they’ll know exactly how their children are driving the vehicle.
- Roadside assistance: Whether the vehicle has broken down, flattened a tire, run out of gas or any other emergency, Ikon’s app connects the customer to roadside assistance.
- Service reminders: When it comes time to service the vehicle, the app sends a reminder to the customer and makes it simple to schedule an appointment.
Of course, dealerships benefit, too. The brand awareness, alone, is extremely valuable, and the customer service reminders will drive additional sales. Perhaps most importantly, all the data created by the app belongs not to Ikon, but to the dealership. OEM apps keep all that data. Dealers can use it to build powerful, targeted marketing campaigns, identify new services and products and improve sales strategies.
NAMAD was an amazing show, but if you didn’t make it, that wasn’t your only chance to talk with us. We’re available anytime.
If you’re keen to learn how we can help your dealership rise to the top in uncertain times, contact us.
