Managing the transition to online sales
The economic shifts occurring are creating interesting and exciting new opportunities for many industries, particularly as businesses transition to more or exclusively online sales. This shift has seen traditional brick-and-mortar showrooms, such as automotive dealerships, leap forward into online sales. With businesses everywhere feeling insecure about the future, and the financial impact of lockdowns and shutdowns, managing a foray into the digital marketplace requires some preparation and planning.
According to Statistics Canada, the number of businesses that made half their sales online has grown by 47%. Automotive dealerships are uniquely positioned in growing their online capacity for sales and service. Despite having been deemed essential and allowed to remain open capacity restrictions and consumer concern has propelled this traditionally “in-person” sales process into an online customer journey.
Many dealerships have adopted some aspect of online automotive sales with platforms that serve customers. From digital brochures and videos to fully interactive digital showrooms, customers can build new cars from the ground up including customizing the model, trim level, colour, and parts accessories online.
Not only for showcasing vehicles, but online platforms are also being increasingly utilized to discuss extended warranties, financing, trade-ins, and negotiate vehicle prices. Customer retention is becoming more efficient and effective through increased online engagement after the purchase with the option to select, book and cancel service appointments online.
For the dealer, establishing an online presence with increased capacity to manage the sales and service process online may require several new investments and increased operating expenses. Investments may include new computers, software, and training. Operating expenses may include digital marketing, website hosting, payment processing infrastructure, increased customer service, and IT support.
There are several tools available to assist dealer principals with managing the transition. These include advisory services in operational management, or virtual CFO as well as assistance with financial statements as expenses and overhead shift.
As businesses undergo the transformation from brick-and-mortar to online sales and service, there are going to face challenges in the set-up, execution, and maintenance of the required systems. Budgeting, forecasting, and planning have been difficult in the volatility of 2020 and 2021. Getting support from accounting professionals with industry experience will help businesses make the transition smoother.