Digital Dealer - December 2017 - 32

COMMUNICATIONS

APRIL 21-23, 2015 * TAMPA, FL

DD24

APRIL 21-23 * TAMPA, FL

Are You Future Ready?
What will the auto
market look like in
20-years?

A NEW PLATFORM FOR DEALERS
TO EMBRACE CHANGE AND THRIVE
THROUGH CUSTOMER AND

Over the last 20
years, the on-demand
economy has made its
impact on multiple
industries:
 The online music
industry has practically
obliterated the market
for CDs and traditional
albums sold in brick-andmortar stores.
 The online travel
industry has largely replaced main street travel
agents with sites like
KAYAK and Expedia.
 Airbnb has completely disrupted the
hotel industry, challenging
traditional establishments
to rethink their place in
the market, their offerings,
and their value proposition.
These are just a few
examples of the impact of
the on-demand economy
on traditional, entrenched,
business models.
"Online" and "sharing"
megatrends have been
slowly making their way
into the transportation
world in recent years, too,
presenting the industry
with some of the biggest
challenges it has ever
faced. Information is now
symmetrical; customers
can get ratings, compare prices, and make
decisions without ever
visiting a dealership. New
32

DECEMBER 2017

EMPLOYEE ENGAGEMENT.
alternatives to ownership
are available, from rental
bikes in urban areas to
the growing dominance
of Uber, Lyft, and Gett
for just-in-time rides and
ride sharing. Add in the
soon-to-be reality of
autonomous driving, and
we are faced with the
need to address some
fundamental questions
about the relevance of the
traditional car dealership
and vehicle ownership in
general.
When combining these
trends with emerging
technologies such as
augmented reality, cyber
security, and the role of
data in the driving experience and the driver's life,
it is clear that car dealerships as we have known
them over the last several
decades are poised for
major redefinition. Dealership owners are facing
their biggest challenges
and opportunities ever.
In their current state,
car dealerships are arguably ill-equipped to deal
with these new trends.
The traditional dealership
business model centers
on "metal" - principally,
selling it and servicing
it. Dealerships have

D I G I TA L D E A L E R . C O M

operated on the premise
that customers will form
an emotional connection
to their cars and brands,
and they will always come
back. The products have
been at the center of
the relationship, and the
prevailing assumption has
been that car ownership
is a right-of-passage, a
staple of modern human
existence, and a mark of
success.
These assumptions no
longer hold true. People
no longer view ownership,
specifically car ownership, as a given. Make
no mistake: this is not
just a generational thing.
While millennials lead the
charge in the on-demand
economy, consisting of
49% of the total users,
adults between the ages
of 35-54 represent 29% of
the on-demand economy
users. Customers over
the age of 55 represent
22% of the total usage.
For those who had hoped
to lean on their baby
boomer customers for a
few more years, it's time
to revisit this assumption.
Or should we call it "unfounded hope?"
When distilling all the
trends and challenges

APRIL 10-12
ORLANDO

KEYNOTE
By Lior Arussy
Founder and
President,
Strativity Group

in the automotive world
into a single question,
car dealerships face the
ultimate inflection point.
The vehicle experience is
emerging at two distinctly
different extremes. On
one side are the "utilitarian transfers" and on the
other are the "rewards
rides."
On one side of the
spectrum, customers will
give up on car ownership altogether and treat
vehicles as basic transportation mechanisms.
They will be viewed as a
functional convenience,
to be rented or shared on
demand and at the time
of need. Customers will
avoid having to maintain
and park vehicles, and
they might not seek anything more than a basic
utilitarian tool.
On the other end of the
spectrum, customers will
cherish their rides. They
will view their cars as
extensions of themselves
and their life experiences. Their cars will be
expressive, individual,
and integrated into their
overall lifestyle.
The "utilitarian transfer" extreme will become
the staple of the sharing
economy, while "rewards
rides" will be the pinnacle
of the ownership economy. What will gradually
erode is the middleground as customers
decide where on the
spectrum they fall.
http://www.DIGITALDEALER.COM
Table of Contents for the Digital Edition of Digital Dealer - December 2017
