Study: Dealers and Car Buyers Want New Tech, Dealership Staff Resistant
A Cox Automotive report finds high demand for automation and AI technology among dealers and their customers. But dealers cited cost and their staffs’ inability or unwillingness to adopt new tools and update processes as major obstacles.
Dealership managers and staff may fear the growing reach of automation and AI could add responsibilities while reducing headcount.
Photo courtesy Cox Automotive
3 min to read
ATLANTA — According to Cox Automotive’s recently released Technology and Transformation of Retail Study, the majority of U.S. auto dealers (72%) and car buyers (67%) believe personalization technology, driven by automation and artificial intelligence, will improve the car-buying process. Nearly as many customers (63%) believe personalization technology will improve car ownership.
Advancements that allow systems to make predictions and decisions and work more like a human brain are transforming many industries, including automotive retail, said Marianne Johnson, Cox Automotive’s chief product officer.
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“Automotive retail is going through a period of transformation right now. AI is not just a buzzword. It’s already impacting the way consumers gather information about cars, learn about which car to purchase, and decide when to interact with a dealer. Artificial intelligence is also helping dealers become more efficient and transparent and deliver a better consumer experience,” Johnson said.
Cox analysts say the adoption of technology is accelerating, a trend not limited to any particular age group.
Analysts noted some consumers are leery of privacy issues related to personal data. However, 68% of consumers surveyed indicated that they don’t mind dealers using personalization technology if it improves the overall vehicle-buying experience. In fact, 76% of consumers expect their dealer to know something about them before they walk onto the showroom floor.
Nearly two-thirds (63%) of dealers agreed that adoption of automation and/or AI is necessary to adapt to changing dealership pressures. Only about half of dealers know “a lot” about these technologies, making adoption more challenging, analysts noted. The top challenges cited were “not worth the cost,” “staff resistant to change,” and “wouldn’t fit in current process.”
Importantly, the survey indicates that 72% of dealers see AI technology as a tool to help improve efficiencies and provide time for staff to focus on other areas of the dealership. Conversely, only 28% of dealers believe adoption of AI will lead to staff reductions. Slightly more than half of dealers surveyed indicated that adopting automated processes can help them deliver a better customer experience and improve retention and loyalty.
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“Having the right data at the right time to be relevant instantly is paramount to successful personalization.”
Staying in touch after the purchase is important as well, analysts added, noting than eight in 10 consumers want to hear from their dealership in some capacity after a vehicle purchase, a process that can be automated with AI technology.
“Customer interaction must be carefully managed,” cautioned Lori Wittman, senior vice president of Cox Automotive Dealer Software Solutions and general manager of CRM provider VinSolutions. “This new study clearly underscores what we see with CRM usage every day: New-car owners do not want to be spammed or stalked by their dealership. Having the right data at the right time to be relevant instantly is paramount to successful personalization.”
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