The industry has discovered its Achilles heel – vehicles so heavily reliant on processing power that they are literally immobilised by the scarcity of semi-conductor chips, causing a huge impact on the new vehicle supply chain.
At the same time, increasing consumer confidence and unexpected access to cash from savings during lockdowns have combined with low cost of credit and caution around public transportation to create high demand for vehicles.
Throw into this mix the customer newly comfortable with researching new brands and buying online, it is easy to see why some dealerships are struggling to keep up in a quickly changing environment.
One thing that these issues demonstrate is the strategic importance of effective retailer stock management throughout the process.
Acquisition of the right used car stock plays a fundamental part in the success or failure of any dealer group. When the supply of used vehicles is restricted, and competition for them reaches new heights, from traditional competitors and online disruptors, this becomes a huge challenge.
Switched-on dealers are using this as an opportunity to review their, often long-held, vehicle acquisition strategies and to question whether changes are required to maintain sales volumes and margins.
Some of the tactics being employed include:
- Stocking brands and/or vehicle types that have not traditionally been part of the portfolio
- Retaining part-exchange vehicles which would normally have been disposed of through wholesale channels
- Being open to retailing older, higher mileage vehicles that are still attractive to the right retail audience
- Seeking out unusual vehicles or unique specifications for high-value, niche customer groups
The key message to take away from this is ‘agility’. Being keenly attuned to changing customer preferences, and the availability of vehicles that meet these, is paramount. And, while experience and close customer engagement play a key role in this, important acquisition decisions should be made with the benefit of data-driven insight into current consumer trends and which vehicles are achieving the shortest turnarounds at the highest margins. An effective, system-based stock control process will form a central source of this understanding.
If acquiring the right stock has something of the artform about it, management of the stock on the books is hard science. But what seems fundamentally quite simple; knowing what vehicles are in stock, at what location, and at what stage of the sales process, can be fraught with problems.
Common examples are:
- Vehicles missing from inventories (and therefore sales channels) due to process inefficiencies
- Location data being incorrect leading to a poor customer experience, missed sales opportunities and increased logistics costs
- Inconsistency in stock information being collated from many different data sources
- Stock data rapidly degrading in a fast-moving environment
These problems have very significant implications for dealer groups, that go beyond the general impression of incompetence that they might give to prospective customers:
- Wasted sales opportunities as customers cannot get a complete view of all available stock and its location
- Reduced cash flow and unnecessary borrowing as stock turnover is impacted
- Loss of funder confidence as their audit processes highlight discrepancies with dealer-provided data
- Regulatory compliance issues and opportunities for fraud based on poor MI and reporting
Leading dealer groups have recognised these shortcomings and have been moving away from manual, paper-based stock inventories, embracing technology that allows them to gain an instant, ‘helicopter view’ of all their vehicles across multiple sites. From a logistical perspective, this means always providing the customer with the right information about vehicle availability and being able to manage stock accessibility across group sites. These systems also enable the reconciliation of stock data from a number of different sources and encourage good record-keeping practices.
With days in stock averages falling sharply in recent months, simply keeping track of vehicles across the group has become even more important to successful sales management, and an even greater challenge.
CheckVentory Audit’s cloud and app-based solution delivers a group-wide view of the whole vehicle inventory on a continual basis, while consolidating data-feeds from multiple sources to give a complete and validated appraisal of your portfolio.
This level of insight enables a more proactive approach to stock management; maximising sales opportunities and allowing better-informed management decisions. It also provides invaluable input for governance and compliance requirements, as well as helping to secure lines of credit by building greater trust and collaboration with funders.
We are proud to offer a cloud-based solution that helps dealerships manage their vehicle inventories in this disrupted market.
CheckVentory Audit is proven as a highly effective tool for managing your dealer stock effectively, driving better results with less effort.
If you would like more information on how we can help optimise your assets, you can read more here. With our app-based platform available 24/7 from any device, it has never been easier to keep on top of your stock management.