Automotive News Canada - April 2020 - v2 - 4

* APRIL 2020

Retail's seismic shift
CONTINUED FROM PA GE 1

with cafes and lounges." But in the aftermath of
the pandemic, "There might be some thought to
resizing dealerships. How big and comfortable a
store do you really need?"
This shift is especially important in large
urban centres where real
estate prices are high,
said Aziz Ahamed, president of the five-dealership Destination Auto
Group in Vancouver.
"Showrooms will
become smaller,"
Ahamed told Automotive
News Canada. "Land is a
precious commodity."
Dealers will increasingly experiment with
new models, such as
AZIZ
small retail outlets in
AHAMED
shopping malls, he said.
President
DIGITAL IN DEMAND
of Destination Auto
Group in Vancouver
Louis-Yves Cloutier,
president of the
360 Agency in Montreal, said that since
the pandemic hit, interest in his company's online-sales software has surged.
360 Agency provides it to about 800 dealerships across Canada.
Other major vendors include Cox Automotive
Canada and Edealer of Toronto. Some platforms
enable clients to conduct the entire buying process online, including negotiation, financing and
insuring the vehicle. Some offer e-signatures
that eliminate the need to physically sign documents.
"We've been telling dealerships of the need to
make the digital transformation for two years,"
Cloutier said. Now, his company is seeing a big
bump in interest.
"We sold 15 [systems] last week," he said in
an interview in early April. "They realize they
don't have a showroom anymore."
Cox Automotive Canada has seen similar
growth in interest, President Maria Soklis said

Showrooms
will become
smaller. Land
is a precious
commodity.

in a statement to Automotive News Canada.
"With most Canadians practising social distancing and no clear end in sight, we are also
seeing behavioural shifts in how dealers are
perceiving the value and importance of the
online-to-in-store experience and have seen an
increased interest in our digital retail tools,"
Soklis said.
This change in consumers' buying attitudes
has accelerated the transformation to online
sales by two or three years, Cloutier
said.

a long-term shift in buying habits.
"I don't think it will flip back once we get to
the other side. Once [dealerships] invest in the
new technology, this change will be the new normal."

THE DIGITAL DEALERSHIP

The short-term strategy of serving customers
remotely could also become ingrained, said J.D.
Power's Karwel.
"I think that's the big implication," he said. "If people get used to
not going to the dealership, then it
'PEOPLE ARE ADAPTING'
may become a permanent shift."
Although vehicle sales plunged
The dilemma for dealers is judgabout 47 per cent in March, according how quickly buying habits
ing to Scotiabank Economics, Cloutier
might change. "Old habits die hard,"
said online traffic has stabilized at
Karwel said. "We are creatures of
about 65 per cent of pre-pandemic
habit."
levels. Web traffic in Quebec, which
For many consumers, he said, the
has the country's highest number of
purchasing process is still emotionally driven by the excitement of pickCOVID-19 cases, is down by half, but
ing up a shiny new vehicle from the
Ontario is near 80 per cent of pre-pandemic levels.
dealership.
Maria Soklis says
"People are adapting," Cloutier
Moss, however, said the conveCox Automotive
nience of online buying will become
said. "Consumers have a lot of time at Canada has seen
the primary sales method as dealers
home. They're spending a lot "an increased
recover from the crisis.
of time on the Internet."
interest in our digital
"Every dealership now is looking
Vendors of online car-pur- retail tools."
chasing software are heavat online digFILE PHOTO
ily promoting their serital sales to
vices, dealers say. Dan Loewen, general manget things back on [an]
ager of Vernon Dodge in the interior of British
even footing," he said.
Columbia, said he has seen a recent "onslaught"
Dealerships across
of offers from such companies.
Canada have adapted
Johnston Automotive Group, which owns
in other ways since the
Vernon Dodge, purchased Roadster software a
pandemic set in, developing a broad palette of
few months before
innovations to protect
the pandemic set in.
clients and staff from
San Francisco-based
COVID-19.
Roadster has about
Destination Auto
1,000 dealership clients, primarily in
Group, for example,
the United States and
offers free pickup and
about 15 in Canada.
drop-off of vehicles at
After an initial
the owners' homes and
ROBERT
spike of consumer
offices for sales and serKARWEL
vice, Ahamed said. He
Web traffic when the
J.D. Power
intends to keep the sercoronavirus emerged,
vice after the pandemic
traffic to Roadster's
threat eases because he has read of U.S. dealersite is down seven
ships that have seen revenue jump well above
per cent because buyers are nervous about
the cost of providing the service.
making purchasIt will be
es right now, Chief
especially valuMarketing Officer
able, Ahamed
Michelle Denogean
said, since the
ANDY MOSS
told Automotive News
coronavirus
CEO of
Canada in a joint
threat is expectRoadster
ed to last for
interview with CEO
months.
Andy Moss.
Karwel can
Soklis of Cox said that while portal traffic has
also foresee
declined, "We are seeing higher buying ratios -
strong demand
meaning that while there appear to be less customers coming to buy a car, those that are in the
for at-home
market are the strongest purchasing intenders."
vehicle servicDealership and manufacturer interest in
ing, such as oil
online systems is at an all-time high, Denogean
changes and
said.
other minor
Moss said the market has been trending
service, in a client's driveway.
toward online sales, and Roadster had projected that it would be three to five years before the
But the deciB.C. Dodge Dealer Dan
"bulk of the market" favoured that process over
sion whether to
Loewen has received
conventional in-dealership sales.
make
the large
an "onslaught" of offers
"It flipped overnight," Moss said. "Now every
capital investfrom vendors of online
dealership feels they need to have that capabilment to fully
car-purchasing software.
ity."
equip mobile
PHOTO VIA DAN LOEWEN
Added Denogean: "We've seen the [online]
units now is a
industry accelerate five years."
difficult one, he said.
To date, Moss said, the interest has not paid
Cloutier of the 360 Agency said it is a smart
off because his sales staff has been unable to
time for dealers to review all facets of their operations.
visit dealerships to conduct training. Roadster
"Those who use the crisis to make changes
pricing starts at US $995 a month. In Canada, the
internally will be the rock stars of the future."
price is Cdn $995.
However, Moss thinks COVID-19 is propelling
- ANC

COVID-19

Louis-Yves Cloutier of the 360 Agency
says interest in his company's online-sales
software has jumped because dealers "realize
they don't have a showroom anymore."
P H O T O : G I A N C A R L O PA W E L E C

I don't think it
will flip back once
we get to the
other side. Once
[dealerships]
invest in the new
[online] technology,
this change will be
the new normal.

If people get
used to not
going to the
dealership [for
service], then it
may become a
permanent shift.

Automotive News Canada - April 2020 - v2

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