Adapting to online sales can mean more than just digital updates

Dealers’ increased ability — and willingness — to sell vehicles online and remotely is itself a significant change for auto retail.

But the notion of providing a seamless e-commerce experience is relevant to considerations dealers have to make about other operational changes beyond the upgraded technology and organizational processes required to make it happen.

Like the size of showrooms. Or how many employees are needed to sell cars.

Automotive News has written about these topics during the past year as we covered the ways the industry adapted to the disruption the pandemic caused to what used to be business as usual. My colleagues have interesting stories in this week’s issue that explore the same themes. (Give them a read.)

Larry P. Vellequette wrote about a $279 million plan to redevelop Toyota of Walnut Creek in California as the ground-floor tenant of a mixed-use building with multifamily housing stacked on top. Proponents say the plan is one way to keep a dealership facility upgrade project affordable in a part of the country where real estate is expensive. A buy-sell expert said there may be places — urban areas, primarily — where these types of projects make sense. The pandemic has renewed debate on the size of a dealership footprint when more sales at least start online.

And David Muller, who occasionally writes for this newsletter, noted the increased sales productivity — selling more vehicles with fewer employees — that dealerships realized last year as discussed in our Retail Forum: NADA virtual panel last week. It’s against that backdrop, dealers and hiring experts said, that auto retailers will have to recruit new employees and develop the next generation of leadership.

How dealerships develop their digital retailing experiences is still unfolding. But what’s becoming clearer is that serving customers in the digital world will have far-reaching effects on the physical one.