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12 December 2024
Sales Channels for Dealership: Why is Diversification Important?
EUROCOC team
12 December 2024
10 min read
Diversification of sales channels has become a very important element for the success of a car dealership: with changing consumer habits and the rise of digital technologies, relying solely on the traditional showroom is no longer sufficient.
Today, customers use a wide range of tools to explore, evaluate and buy vehicles, from the dealership website to online marketplaces and social platforms.
In this context, diversifying sales channels per dealership not only broadens the reach of the car showroom, but also provides greater flexibility, resilience and adaptability to an ever-changing market.
But why is it so important to adopt a multi-channel strategy for a dealership? In this article we will look at the main reasons why diversification in sales channels is a key strategic choice to remain competitive in the automotive industry.
Before we begin, please note that you can also promote the purchase of vehicles from another European country through this strategy. In this case, however, be sure to include the certificate of conformity among the various sales documents, as this will be required by the DMV in order to complete the new registration. This, in fact, will allow the new owner to circulate indefinitely within european territory.
One of the easiest and quickest ways to obtain this certificate is through the service offered by our EUROCOC website with which you can make the request conveniently online and receive the document at your dealership within a few working days.
What are the Sales Channels for Dealerships?
Car dealerships today have a wide range of sales channels at their disposal to reach their customers and maximise sales. Traditionally, the main channel was direct sales at the dealership, where customers physically visit the showroom to see vehicles, talk to salespeople and test drive cars.
This method still retains its centrality, especially for those who prefer a more personal experience and want to see the product before buying it. However, with the digital evolution, many dealerships have started to invest more and more in their online presence.
A well-structured website is a key tool in this context: within this portal, customers can explore the inventory, book test drives or request quotes, and in some cases even have the option of completing the purchase directly online. This not only makes the process more efficient, but also offers greater convenience to potential buyers, who can view offers from the comfort of their own homes.
To support these sites, many dealerships also use online marketplaces such as Autoscout24 or Autoproff. These platforms make it possible to significantly increase the visibility of cars for sale, reaching potential buyers on a much larger scale.
Another key aspect of modern sales strategy is social media and digital advertising. With platforms such as Facebook, Instagram and LinkedIn, dealerships can promote the sale of new and used vehicles, post special offers and interact directly with customers. The use of targeted advertising campaigns, e.g. through Facebook Ads or Google Ads, makes it possible to reach exactly the desired audience, thus maximising the effectiveness of ads.
In addition, the important contribution of leasing and long-term rental programmes should not be forgotten. These services, often operated directly by dealerships, offer an alternative to traditional purchase, allowing customers to enjoy the benefits of a new car without necessarily having to acquire ownership. This type of service is often advertised through direct agreements with companies, which can take advantage of company fleets or offer their employees convenient leasing plans.
Dealerships can also exploit relationship marketing strategies through email marketing and the use of CRM (Customer Relationship Management). This allows them to maintain constant contact with their customers, offering promotions, reminding them of scheduled maintenance on vehicles already purchased or signalling the arrival of new models.
Finally, the importance of automotive events and trade fairs should not be underestimated. These situations provide excellent opportunities to display vehicles and create direct contact with potential customers. Off-site test drive events can attract new buyers, giving them the opportunity to test drive cars in environments other than the classic showroom.
Why Is Diversification in Sales Channels Important for Dealerships?
Diversification in sales channels offers a number of strategic and operational advantages for a dealership that help improve its performance and adaptability in an increasingly competitive market.
1. Greater Audience Reach
One of the main advantages of diversification in sales channels is the ability to reach a wider and more diverse audience. Each person has, in fact, a different way of approaching the process of buying a car, and using multiple channels allows these different preferences to be met.
For example, there are customers who appreciate the direct and personal interaction they can have by physically visiting a dealership. These potential buyers want to see and touch the car with their hands, perhaps take a test drive, and speak directly with a salesperson to get a tangible experience before making a decision.
At the same time, there is a growing number of consumers who prefer a more convenient and faster shopping experience using digital channels. These customers search for information online, compare prices and models, and may be more inclined to buy a car or at least start the process directly via a website, a marketplace such as Autoscout24 or even via social media.
By diversifying sales channels, therefore, a dealership can intercept both those interested in traditional purchasing and those who prefer a digital experience.
2. Reducing Risk
Relying on a single sales channel exposes a dealership to significant risk, especially in a changing economic and social environment. Unforeseen events, such as an economic crisis or a pandemic, can heavily influence consumer behaviour and render a single sales channel ineffective.
For example, during the Covid19 pandemic, many dealerships that relied exclusively on showroom sales faced a drastic decrease in customer flow due to health restrictions and changing buying habits.
Diversification of sales channels balances these risks: if one channel, such as the physical shop, suffers a slowdown or downturn, other channels can compensate for the loss of sales. This flexibility helps reduce the impact of unforeseen events, as the company does not depend exclusively on a single source of revenue.
3. Better Adaptation to Market Trends
The automotive market is constantly changing, driven by various factors such as technological innovation, new consumer habits and evolving purchasing patterns.
Customer preferences are constantly changing and are influenced by factors such as the availability of new technologies, access to detailed information online and the increasing demand for flexible solutions. For example, whereas in the past, buying a car was almost exclusively through a visit to a dealership, today more and more people feel comfortable doing extensive research and even buying a vehicle completely online.
Diversification of sales channels therefore allows a dealership to adapt to these changes and seize new opportunities. One obvious example is online car buying: many dealerships are investing in digital platforms where customers can explore available vehicles, compare prices and features, and even complete the entire purchase process without ever physically visiting the showroom.
This not only responds to new consumer needs, but also increases the reach of the business, allowing cars to be sold to customers who may be geographically far away from the dealership.
4. Increased Visibility and Brand Awareness
When a dealership uses multiple sales channels, it significantly increases its visibility, as the brand appears in different contexts and platforms, reaching potential customers on multiple fronts. This process of repeated exposure is key to creating a connection with the audience, as the more times a customer comes into contact with the brand, the more likely they are to develop familiarity and trust in it.
For example, imagine a customer who is looking for a new car. He might start his search on an online marketplace such as Autoscout24, where he finds several vehicle options offered by a particular dealership. Then, during a browsing session on Facebook or Instagram, he sees an ad from the same dealership promoting a special promotion or a new model. Subsequently, perhaps he or she visits the dealership’s website to view the inventory and get more details.
This contact across different channels not only reinforces the brand’s presence in the customer’s mind, but also builds a sense of trustworthiness.
The repetition of these interactions on multiple platforms creates familiarity: consumers tend to feel more confident buying from a company they see regularly and that appears present and active on various channels. This psychological mechanism, known as the ‘exposure effect’, leads customers to perceive the brand as more trustworthy and competent. Consequently, the likelihood that they will choose that dealership to purchase increases, as they already feel ‘connected’ to the brand.
In addition, more exposure helps to improve the brand’s positioning against the competition. If a dealership is visible on multiple channels, not only does it become more memorable, but it also appears more accessible and modern, in line with the expectations of today’s consumers who want immediate and easily available information.
5. Operational Flexibility and Cost Optimisation
Some sales channels, such as online platforms, offer a significant advantage over running a physical showroom in terms of operating costs. Running a physical dealership involves several fixed expenses, such as space rent, utilities, sales personnel and infrastructure maintenance. These costs can be high and strongly affect profit margins.
In contrast, an active online presence drastically reduces these expenses. Operating a website, posting ads on online marketplaces, or using e-commerce platforms for vehicles does not require the same level of physical resources as a traditional car showroom.
A digital platform can be maintained with much less investment, both in terms of space (no need for a building) and personnel, as management can be centralised and automated. For example, inventory can be updated in real time, customer enquiries can be managed via CRM systems and transactions can take place online without the need for direct staff intervention.
Another advantage of online sales is the ability to operate without time limits. Unlike a showroom, which has specific opening hours, a website or marketplace is accessible 24/7. This means that customers can view, compare and purchase vehicles at any time, even outside traditional business hours. This increases sales opportunities and allows you to capitalise on buyers who may not have time to physically visit a dealership during traditional business hours.
In conclusion, diversification of sales channels per dealership is an indispensable strategy for car showrooms that want to thrive in an increasingly competitive and dynamic market. Offering multiple modes of purchase, ranging from the physical showroom to digital platforms, not only broadens the pool of potential customers, but also provides greater operational flexibility, reducing fixed costs and allowing them to operate without time constraints.
The presence on different sales channels makes it possible to reach customers with different needs and purchasing habits, improving brand visibility and strengthening the relationship of trust with the consumer. Furthermore, diversifying allows minimising the risks associated with market fluctuations, making the dealership more resilient and able to adapt to the challenges and opportunities of the future.
Adopting a multi-channel strategy is not just an option, but a fundamental choice to remain competitive in the automotive market and ensure sustainable growth of the dealership in the long term.
