How to Protect Your Dealership from the Retail Crisis

For the past few months, we have seen evidence of declining consumer confidence in the retail industry, with big names, such as Toys R Us and Maplin falling into administration, Mothercare issuing profit warnings, Jamie’s Italian and Prezzo facing closures and New Look and House of Fraser looking to shore up their finances.

While used car sales volumes have been positive in 2018’s first quarter, the decline in new car sales may be an indication of buyers reducing their spending, signifying tough times ahead. There is no need to panic, although vehicle dealers may want to sharpen their focus and prepare for the worst.

Embrace the Future of Retail

Part of the reason why a lot of retailers have been experiencing financial difficulties, is that they refuse progression. Before going into administration, Toys R Us still used old methods like layaway schemes and the company neglected to evolve into an online retailer, which is widely believed to have played a major role in its downfall. Rather than getting stuck in the past, your dealership should try to embrace new digital retailing technologies.

Pay Attention to the Market

Another criticism of Toys R Us is that it failed to adapt to its target market. Kids have changed, and they no longer spend as much time playing with old-fashioned toys, they are more interested in digital apps and tech. The key to a successful business is placing customer desires at the forefront of your development strategies and staying in tune with the dynamic marketplace.

Be Open to Increased Acquisition Prices

Used car sales are expected to increase in popularity this year, and the disadvantage of this is that stock acquisition prices are also likely to rise. Where you may have turned down certain high prices in the past, they may now be worth consideration. Although this will put pressure on margins, there are ways to make up for the shortfall, perhaps with finance and extras.

However, try to maintain competitive screen prices, as this will always entice consumers, especially at a time when they appear to be moderating their spending.

Keep a Close Eye on Stock Turn

Aged stock management is going to be a major performance indicator this year, so it is vital that you have processes in place to measure days in stock and take action to prevent vehicles from staying on the forecourt for too long.

For more information about our online retailing platform, ClickEngage™ or our Aged Stock Management Services, get in touch today by emailing marketing@clickdealer.co.uk, calling 01782 478 220 or via our contact page.