Innovations Expected to Reshape Dealerships

From self-driving cars in the service lane to paper-free processes, get ready to embrace the auto dealership of tomorrow. In many cases, tomorrow is already here.

Some auto makers and suppliers are experimenting with autonomous vehicles. When they hit the market, will they drive themselves to the dealership after onboard telematics systems signal it’s time for service?

More to the present, some dealers now use paperless technology to replace the mounds of paperwork required for selling and servicing automobiles. Service-drive technologies using smartphone appointment-setting and mobile write-up and walk-around tools are growing in use.

Expect a different breed of car buyer who wants a more hands-off, yet transparent, way to engage with the dealership. They will rely more on mobile devices and other technologies that allow them to conduct business from a distance.

These and other emerging dynamics are expected to disrupt traditional ideas of what a brick-and-mortar auto dealership is and how it delivers products and services to consumers, which experts stress and many service managers already recognize, is a shrinking pie.

“The future holds challenges for dealerships as service work declines due to improved vehicle quality and longer maintenance intervals,” says Rich Appleby, a former dealer principal and now a fixed-operations consultant with Performance Management Training in Virginia Beach, VA.

“So the only way a dealership will make money is if it works on more cars,” he says. “The only way to handle more cars without adding more people and associated expense is to make people more efficient so they can handle increased volume without missing key process steps.”

Marcey Uday-Riley of IRI Consultants in Detroit agrees. She likens dealerships using paper-free systems to the medical field shifting to electronic medical records. The change has revolutionized healthcare because the technology makes it possible to access patients’ records at every approved point in a hospital or doctor’s office.

“Tools that consolidate repair order data as EMR does patient data are cutting  edge, because a big issue in dealerships is the paperwork and its communication with the OEM and the customer,” says Uday-Riley. Streamlining the dealership means “identifying technology solutions like this.”

Dealers will need to improve workflow from department to department, Appleby says.

“Most dealerships today are significantly ineffective in how work flows through them, and the need is to speed up processes without skipping the steps that add value to the customer,” he says.

To achieve this, dealership management must take apart traditional processes and rebuild them to be more streamlined, transparent and convenient for customers.

John Mantione, vice president and general manager for Fields BMW of Florida, says the 4-store dealership group installed Canon’s Intelligent Dealership Archiving System (IDEAS) with a scan-less automatic filing engine two years ago. 

The paper-free process captures, categorizes and indexes repair-order documentation, without the need to print and scan the documents. 

Warranty documentation is validated to ensure all the information required by an OEM is present before a repair order is committed to the archive.

This process has helped Fields reduce warranty chargeback costs, Mantione says.

“Our big challenge was the nightmare of paper storage, onsite and off-site, plus lost files,” he says. “Some of our repair-order files can be 25 or more pages of paper, which we now avoid having to print, scan and store.” 

Another downside of the old manual filing system was that repair orders sometimes disappeared due to human error, says Peggy Gill, who administers Field’s warranty program.

“IDEAS has had a large positive effect in the way I now do my job,” she says. “It is so much less stressful having a reliable single source for document retrieval.”

Technology is streamlining the service write-up process, too. For instance, many service advisers now use mobile devices to immediately retrieve customer and vehicle information, conduct vehicle walkarounds and write repair orders.

“There’s a revolution going on in the car dealership as they adapt to embrace what is going on in other industries, which are using technology to improve results,” says Dave Waco, president of MOC1 Solutions. “A few dealers are leading this charge and others are entering it.”

He envisions dealership service advisers of the future relying less on personal knowledge of technology and more on personality to interact with customers.

“These individuals won’t need mechanical knowledge because the tools they’ll use to interface with customers will provide that to them,” Waco says. “What these individuals will need to bring to the service drive is personality, great communications and charisma.”

Appleby adds: “Mobility tools will come equipped with drop-down menus of questions to ask the vehicle owner and for capturing their answers. We’re seeing this already, as OEMs like Chrysler and others nudge their franchises in this direction.”

The use of telematics in the vehicle itself rapidly is reshaping the service department. Many OEMs are building these devices into their vehicles and others are available aftermarket.

Telematics inside the car read engine performance data from the car’s OBDII computer, translate into English and communicate owner-actionable information to the vehicle owner’s mobile device, email or dash device. At the same time, it is communicating the codes to the owner’s vehicle service department.

Telematics reporting engine and other systems diagnostics directly into the service center streamlines the ultimate customer experience.

Because the telematics device has reported the data to the service department, when the customer arrives for that service, the diagnostics already are done. The customer is saved the time typically spent waiting to hear what service work a car may need.

The industry already is working on in-vehicle telematics using speech-recognition technology to “hear” drivers and “speak” to drivers – and their dealers – about the operating condition of their vehicle.

Voice maintenance promptings are achieving 20% to 30% consumer response rates in market testing, says Gary Wallace, vice president-public affairs for Agero, a telematics provider.

Systems can ask motorists survey questions as they drive, obtaining real-time product use and satisfaction information throughout the ownership of the vehicle.

“Dealers tell us customers like tools like this because the car spits out data messages to them in real time,” Wallace says, adding that it is “perceived more positively by younger owners.”

Such technology enhances the credibility of an auto maker and dealership service department and speeds up problem resolution, he says.

“The younger generation is increasingly focused on technology, and OEMs and dealers must appeal to the generations growing up in the digital age,” Wallace says. “These people do not want to shop at physical stores, preferring to shop and do business online where they can.

“It is no different with the service department. If they can download or send service-related information by phone, for instance, they like that because that’s the way they like to receive service.” 

Will all this emerging technology replace humans?

“Having humans in the service department will always be required for maintaining the relationship with the customer,” Waco said. “Yet to maximize profits, the dealership is going to have to focus on maximizing efficiency, as Generations X and Y want information at their fingertips.

“It is going to be a necessity of the car business going forward to do business with customers through apps and downloads, as people value their time, especially in the after-warranty experience, where greater efficiencies set the dealership apart from the independent garage.”

Technology helps the dealership provide a consistent and predictable experience for customers and dealership employees alike, Appleby says.

“For instance, when advisors use a tablet to write up the customer, management can configure the tablet so it will not permit advisors to issue a repair order until they have done the correct writeup and walkaround,” he says.

Dealers recognize the inevitability of relying more on technology, Waco says. “All dealerships agree where they want to head. The question is when will they implement these changes in their stores.”

Jim Leman, who acknowledges his desk is cluttered with paper, has been writing about automotive retail practices and technologies for 20 years.