The process of merchandising and syndicating online inventory tends to vary from dealership to dealership. Nevertheless, in today’s margin-compressed reality, the demand to quickly prepare a vehicle from lot arrival to front-line ready in a way that increases profit is shared by all dealers.
The 2018 Cox Automotive Car Buyer Study found that the time spent by shoppers in market and online when searching for a car continues to decline. In addition to compressed margins, this trend is creating even more time constraints, while reducing the number of opportunities to connect with online shoppers. To minimize the consequences of this trend, dealers need to execute an effective merchandising and syndication program predicated on speed and efficiency.
While this general advice might not surprise some dealers, the way this program relies on several functional areas of a dealership’s merchandising program could sound alarms. The best online merchandising and syndication programs are treated as a team sport, where various functions across the dealership work cohesively to conquest customers and conquer father time.
With this in mind, I’ve identified 4 key areas to help you connect the dots between effective online merchandising and profitable growth by making time your ally, and not your enemy.
Speed to Market from Auction to Online
Getting vehicles in front of shoppers quickly and effectively is essential for turning a profit. This can be even more difficult with a vehicle purchased in lane at an auction location.
After talking to a dealer in Texas a few months ago, we ran through an exercise that measured his holding costs as a function of speed-to-market. After making changes to his auction merchandising process, this dealership lowered pre-advertising holding costs from $4,000 down to $600 per month across their auction inventory by:
- Utilizing photos captured at the auction
- Automatically generated vehicle descriptions that notified shoppers the car was in-transit
- Changing processes to help staff price the vehicle in 1 day instead of 8
Use Real Vehicle Photos
Working with a shopper’s limited attention span and small window of opportunity to connect, photos can be the tool that differentiates your dealership from others.
A picture can be a major influencer due to their emotional pull on a customer. A recent Cox Automotive study found that 40% of car shoppers would buy a vehicle based on photos without ever seeing it in person first. That same study found used vehicles with custom images receive 349% more Vehicle Detail Page (VDP) views than those with stock images.
Stand Tall with Clean Photos
I’m still surprised to see billboards, dirt lots, and even dumpsters in the background of vehicle photos. This lessens the perception and takes away from the visual appeal of the inventory – which some even suggest might impact potential gross on a sale. With stiff competition and tightening margins, the last thing you want to do is jeopardize the desirability of a vehicle with distracting or poorly staged photos.
After looking at more than 1,600 Autotrader.com listings in 2017, we found a 3% to 5% increase from SRPs to VDPs for vehicles with clean backgrounds, compared to those without clean backgrounds.
Provide the Next Level Detail
Car shoppers know just as much, or even more, about your inventory because of the research they conduct online. If you miss valuable options and other details about a car, you can lose the opportunity to maximize per vehicle margins on your inventory.
Build data increases exact style matches when decoding VINs. When an inventory platform gets a VIN, a lot of times there are multiple styles that can be associated to it. Additional detail is needed to provide an exact style match. Receiving exact style matches makes your listings more complete and makes for an improved online search.
Looking at over 70,000 vehicles both before and after build data was applied, there was an increase in exact style matches by over 8%.
When you connect these elements, you give your business the best chance to captivate shoppers sooner, despite having less time than ever before. I’d love to discuss these topics further with you at NADA 2018 in Las Vegas, Nevada.
Register for a demo and stop by booth 3016C to find out how you can start connecting the dots between effective merchandising and profitable growth for your dealership.