The Role of Technology in Modern Auto Dealerships: A Case for Automation

In an industry traditionally hesitant to embrace change, modern auto dealerships are now gearing up for a revolutionary shift. Historically, the intricacies of buying a vehicle—from delivery logistics to the high stakes attached to each purchase—have made the automobile sector a laggard in tech adoption.

Unlike simpler commodities like books or electronics, cars posed a unique challenge for digital integration. However, the tide is turning. With millennials emerging as the largest group of new car buyers in 2020 over Boomers, closely followed by Gen Z, the industry is bound for tech-driven transformation.

This new generation of buyers demands a purchase process that is fast, easy, and digital. Auto dealerships that recognize and adapt to this shift by harnessing technology at every stage of the buyer’s journey will not only meet but exceed the expectations of their tech-savvy clientele.

Dealer Management Systems (DMS) and Customer Relationship Management (CRM)

Dealer Management Systems (DMS) and Customer Relationship Management (CRM) software are at the heart of technological integration in modern auto dealerships. Nearly all dealers use these systems to streamline their operations, manage customer data, and automate various aspects of the business. Despite their widespread adoption, many dealers express dissatisfaction with their current technology.

In a recent Lotlinx market analysis, sales volume data revealed insights into the performance of various car brands and dealerships across different regions.

For example, new inventory sales experienced a decrease of 2.7%, while used inventory sales dropped by 12.8%. Specific markets like Fort Smith/Fayetteville/Springdale/Rogers saw an impressive 16.4% increase, whereas Cleveland saw a 5.4% decline. Weekly results highlighted that brands like FIAT, FISKER, and FORD had eyebrow-raising changes, with FIAT sales increasing by 5.5% and FORD by 6.6%.

On the other hand, brands such as JAGUAR saw a 42.2% jump, while JEEP experienced a stark 40.3% decrease. These fluctuations in sales volumes across different brands and regions show that many auto dealerships are still falling short in their technological adoptions to identify and address pain points in their operations. They must update their current capabilities in order to better meet market demands and consumer expectations.

Lotlinx Sentinel: Merging with Your Existing DMS and CRM

Despite their widespread use, many DMS and CRM systems lack the real-time predictive capabilities and granular VIN-level insights offered by advanced platforms like Lotlinx Sentinel.

Lotlinx Sentinel, the VIN Management Platform, leverages machine learning and artificial intelligence (AI) to provide real-time insights. It pinpoints specific VINs (vehicle identification numbers) that need attention and ensures no wasted advertising spend. It monitors inventory 24/7 and uses over 24 billion data points to forecast risks and implement targeted corrective actions at the VIN level.

This results in faster inventory turnover, as vehicles spend fewer days on the lot. Additionally, Sentinel creates an individualized media plan for each VIN, optimizing exposure through tailored marketing efforts.

Its omni-channel approach connects shopper demand and buyer behavior at the VIN level, integrating across thousands of dealer websites and automotive publishers. This comprehensive, tech-driven strategy enables dealers to reach the right audience for each vehicle, ultimately improving inventory management, reducing costs, and driving profitable sales.

3 Core Benefits Of Automated Dealership Tech

1. Enhancing the Customer Experience

One of the standout benefits of technology in auto dealerships is its ability to enhance the customer experience. From online research tools that allow customers to explore options before visiting a dealership to immersive VR test drives, technology has transformed how consumers engage with car dealerships. Digital marketing strategies, including personalized email campaigns and targeted social media advertising, help attract and retain customers by meeting them where they are most active—online.

2. Automation in Dealership Operations

Automated processes in inventory management (like those mentioned above), finance, and compliance reduce the manual workload and minimize errors. Choosing the right automotive inventory management platform ensures these operational aspects run smoothly. 

Features like digital contracting and e-signatures streamline the buying process, making it quicker and more convenient for both the dealership and the customer. Automation enables dealerships to focus more on customer service and less on administrative tasks, improving overall efficiency and customer satisfaction.

3. Integration and Innovation

With technologies like machine learning (ML) and AI in auto sales, dealerships can predict customer preferences, optimize inventory, and personalize marketing efforts. Integrated systems that bring together various technological tools into a unified platform will enable dealerships to operate more smoothly and make data-driven decisions.

As many of us have already seen, AI seems to be in just about every headline, social media post, and podcast. But automation is not a trend — it’s the future. Dealerships that act sooner rather than later by taking advantage of automobile inventory management will get ahead in the competition. More importantly, AI will help you realize new, faster, and easier ways to maintain VIN inventory, track trends, and make great sales so you can continue to grow as a dealership tomorrow. Click here to read how the Lotlinx Advantage can help you make the switch to the future of inventory management automation. Request a demo today.

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