Over the last few years, major shifts in the automotive space have accelerated, ultimately leading to more change for the industry and its players in the past three years than the last three decades. Major change is largely a result of shifts that were beginning to occur in the years before the COVID-19 global pandemic and subsequent disruptions hit.
As a result of the fast succession of changes, automotive players have had to be innovative when acquiring and selling vehicles, meeting customers where they are and adjusting to rapidly evolving standards. Logistics has played a critical role in remaining competitive in such a fragmented space.
The ACERTUS team has broken down the most significant shifts, both pre- and post-COVID, and what they mean for vehicle retailers looking to compete.
In early 2020, the unprecedented COVID-19 global pandemic spurred many new auto-industry disruptions: large-scale shifts around digital retailing, lagging new vehicle inventory, slowing sales momentum and changing consumer preferences. But many changes to the industry were well underway pre-pandemic.
Prior to the onset of COVID-19, the industry was seeing seismic consumer behavior shifts, such as an increasing number of customers choosing to go online to purchase their next vehicle while others were opting for more of a hybrid car-buying experience. Those that chose an omnichannel approach to car buying could complete much of the initial vehicle research online but still have a traditional brick-and-mortar dealership experience for checking out vehicle features, completing test drives, financing and finalizing their purchases.
Up until this point, ecommerce had been dramatically changing nearly every industry, but many auto retailers were against creating a digital customer experience that didn’t require in-person interaction. However, this created a white space and gave rise to digital-platform retailers like Vroom and Carvana, which relied on smart vehicle logistics to offer their customers a fast, convenient way to shop online and have vehicles delivered directly to their driveways.
As these digital retailers took off, many dealers struggled to keep pace and meet the demand of changing consumer preferences. Some retailers even resisted this trend due to concerns about a potential loss of control over their vehicle sales or sales-team job security, while retailers that were willing to adopt this new trend really struggled to implement logistics solutions to successfully execute out-of-state sales with home-delivery options.
While shifts in consumer behavior and digital retailing were already taking place before COVID hit, the fast spread of the virus led to even more consumers demanding the ability to shop for and purchase a vehicle from the safety and convenience of their homes. Just as customers could easily order items like groceries, restaurant food and pet food and request to have it delivered at their door, customers expected safe, remote and contact-free options when it came to larger purchases like vehicles.
ACERTUS conducted an independent study to examine shifts in consumer preferences and behaviors both before and after the pandemic. The report found that 80% of car shoppers were open to purchasing vehicles online – a 50% jump from pre-COVID numbers – pointing to a fast acceleration of already-existent consumer shifts.
As the pandemic progressed and consumer demand for vehicles rose once again, the auto industry faced a new set of challenges when it came to vehicle production. While, early on in the pandemic, the shutdown of car manufacturers led to the drastic decrease in new-vehicle inventory, as plants began to open, a shortage of critical vehicle parts and supply-chain disruptions caused further downtime. In particular, the lack of semiconductor chips has caused serious delays in the vehicle production-to-market pipeline.
With consumer demand increasing, and a lack of enough new vehicles to meet the existing demand, competition around sourcing used-vehicle inventory has now surged, as well. Vehicle retailers have had to find creative ways to locate and acquire high-quality used inventory, including going to consumers themselves and purchasing from multiple sites or other retailers, auction houses and rental-car companies. Fortunately, innovative methods like these have helped retailers, and the industry at large, keep up with consumer demand at a slightly better pace.
However, these new methods of sourcing inventory mean vehicle logistics is more critical than ever for retailers working to meet consumer demand. While speed is everything, carriers are having to make more frequent stops along their routes to acquire vehicles from multiple sites. Add to these challenges the realities of increasingly high fuel prices and a widespread driver shortage, and all of this has created unprecedented conditions with some of the tightest carrier capacity ever seen. A more limited and constrained carrier network means that now, two years since the pandemic hit, the industry is facing obstacles when shipping vehicles and getting them to market with speed and efficiency.
ACERTUS as a Logistics Partner
The auto industry, and particularly vehicle retailers, are navigating many different challenges, changes and disruptions as they source inventory and move their product. In this new environment, it’s more critical than ever that vehicle retailers have access to expert vehicle logistics they can leverage to stay competitive. ACERTUS has logistics solutions that can help level the playing field for dealers, so they can compete and even expand their operations to sell across state lines.
In fact, ACERTUS is uniquely equipped to help retailers operate in the industry’s new state of normal. With the largest carrier network in North America, ACERTUS can scale up or down quickly and on-demand. Additionally, ACERTUS’ drive-away service delivers high-touch customization, and its hub-and-spoke infrastructure allows for storage and reconditioning services. Plus, ACERTUS’ technology platform delivers visibility into every aspect of the vehicle journey and data-driven learning, ensuring retailers have the critical information they need to improve their performance.
ACERTUS can handle the entire vehicle journey with the only truly comprehensive approach to automotive logistics and the ability to move, store, recondition, title and deliver finished vehicles wherever and whenever needed. This start-to-finish service is driven by a transformative combination of technology, people and experience, ensuring ACERTUS can turn logistics into a competitive advantage for retailers and all companies looking to move vehicles.
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