The unique thing about the automotive industry is that it seems to change faster than most industries, despite being so often stuck in the past. Here’s what I believe we have in store, en masse, for 2022 in the automotive industry.
1. Brand Will Matter More Than Ever Before
In 2021, to the delight of many marketers, we saw more dealerships begin to embrace the value of nourishing their own brands. Not their OEM, but their individual dealership’s brand. In 2022, I expect to see this continue with the rise of more dealer groups buying up smaller properties, franchisees butting heads with their OEMs, and additional dealers realizing the importance of selling themselves: not just vehicles.
How to win: Create a transparent and authentic strategy that brings all of your most important channels together. Leverage content, SEO, and paid advertising to your advantage internally and alongside partners that have a proven track record in doing so (like Flex!)
2. Franchisees and OEMs will Butt Heads
Digital in automotive has always been a unique space when it comes to franchise rules and OEM mandates. In 2021, we saw more dealerships question if the OEMs had their best interests at heart when it came to mandates and changes. With more new digital retailing tool mandates that aren’t always consumer or dealer-friend and direct-to-consumer initiatives starting up (despite certain regulations), this will be the year of the franchisee uprising. Expect a revolution-style backlash against OEM mandates in favor of options that align with dealer and consumer best interests.
How to win: Stop putting co-op (if it even exists for your brand at this point) on a pedestal to get “free” placements. Choose a website partner and tools that are capable of creating the best solution for your market, your customers, and your business. Don’t blindly follow what the OEM is telling you to do. Yes, this may have repercussions. Yes, you can do so without losing your franchise agreement.
3. Dealers Will Cancel Digital Retailing Tools, Yet More Will Come
Leaving tool preferences out of it, I expect to see dealerships that clung onto DR tools in times of desperation and in hopes of a magic bullet canceling them. Indirectly, this lack of value is more-than-likely caused by a lack of process in the dealership than the shortfalls of many tools themselves. Despite this prediction, I also expect to see more DR tools continue to enter this still shiny and exciting space.
How to win: Focus on the process by creating flows that work for your customers and your dealership. Don’t blindly install tools with the silver bullet mindset. Choose those that enhance your business and make sense. Ditch those that don’t.
4. Google VLAs Will Take Over in Multiple Ways
Google VLAs (vehicle listing ads) is hands-down one of my personal favourite things to happen in the automotive digital advertising space in recent history.
Google VLAs are visual ads that appear as a listing in Google Search Results. They have vehicle images, pricing, dealership/seller name, and other information that connects shoppers directly to the VDP (vehicle display page) in question.
How to win: Start using VLAs (Google Vehicle Ads) as soon as possible through a Google Trusted Partner (like Flex!). Make sure to monitor your spending to VLAs in conjunction with your Google Search and Display spend amounts, as the three will require ongoing optimization to maximize their effectiveness.
5. Google VLAs will Cannibalize Part of Search Budgets
While I wouldn’t say there is enough proof to confirm my suspicions, I’d anticipate that the rise of VLAs will have an impact on standard Google Search ads for similar queries. We’re visual creatures - it only makes sense that we’ll click on a visual ad placement instead of a text-based one if it truly aligns with what we’re searching for.
The balance for search versus VLA spending will require ongoing optimization as individual dealers and their competitors continue to enter the VLA market.
How to win: As with all ads, optimization is the key to success. Monitor your budget closely and don’t be shy to spend on this new, yet trusted advertising platform. It’s a shiny object housed in a trusted and historically successful base.
6. OEMs Will Push Focus on Direct-to-Consumer Efforts
While the DTC path is blurred depending on state, province, and country, one thing is for sure: OEMs are going to make it happen.
Even if it doesn’t look like the oft-admired Carvana, OEMs will continue to push online orders, build and price, reservations, and tools that eliminate the dealership as a major part of the research and consideration phases of the funnel. Look to Europe to beat the trends on this one, with brands like Dodge and Chrysler being eliminated alongside dealerships in favour of a fully DTC model within the next 5 years.
How to win: Focus on your dealership’s brand, prioritizing your individual dealership, and a keen awareness of your local market. Use your own data to inform marketing decisions, not overall datasets from your OEM’s entire base of franchisees that are in markets nothing like your own. Create your strategy for your business and have partners that are experienced in doing so with all major channels – not just ads.
7. Content Will Re-Become King
It seems that content marketing ebbs and flows with market trends. When times are good, it gets neglected. When times are tough, the long game doesn’t look so hard. With more focus on brand, all-time-high prices on used inventory, and the world’s most unique supply and demand state, I expect more dealers to leverage content marketing to:
Inject themselves into the research and consideration phase of the buyer’s journey (as the OEMs try to rip them out of it)
Answer customer questions
Rank favorably in search engines
Enhance their unique brand
Catch their competition’s blind spots
How to win: Create content that caters to all points in the Google Buyer’s Journey, and do so in a way that is localized for your market. After all, there’s no point in a model landing page for the Rav4 that talks about how amazing it is in the snow if you’re in California, or a blog post that talks about how many ATVs a vehicle can tow if adventure isn’t part of the local lifestyle. We have ideas - let’s chat!
8. Used Car Prices Will Continue to Rise
Behind a record-setting 2021, despite all-time-high prices on used vehicles, we’ll see similar trends in 2022. There are still fewer new vehicles being produced and sold, so used vehicles will be:
Staying on the road longer than they historically have
In higher demand (thus, more expensive)
Acting in place of new vehicles, for those of recent model years
The first part of the independent used dealership’s rise to status
How to win: Source inventory and price it fairly. Plan ahead for inventory fluctuations and use a “better safe than without inventory” approach.
9. Independents Will Have their Time to Shine
That’s right: I think that independents will have their time in the spotlight. Independents have often been shoved to the side in favour of franchise dealerships for quality of service and inventory levels. That will be no more. The independents that are doing it right will have their processes of years passed to thank. Why?
They typically know how to source and sell used vehicles better than their franchise counterparts.
They’re the first rooftops that pop into a buyer’s mind and consideration set when they think “used vehicles”
Years of history with their SEO attention on used vehicles
More connections in the used vehicle sales + acquisition space from a different vantage point
On top of that: independents aren’t handcuffed with mandates the same way that franchisees are. They can do what they want, their way, and make it work for both them and their customers.
Yes, I believe that smaller rooftops will sell, but I believe the survival of the fittest will take those focused on quality leaps forward.
How to win: If you’re an independent, take advantage of the freedom you have that franchisees do not. Be extra authentic, be silly, and run promotions that are actually exciting and not the overused “25% off MSRP and 0% Interest for 24 Months.” Get active with content marketing through blogs and social media.
10. Another Round of Free Trials for Third-Parties
In both springs of 2021 and 2020, we saw desperate third-party vendors provide access to their tools for lengthy free trials. With so many new players and dealerships making changes, I expect to see another spring of trying to win a race to the bottom with tool placements.
How to win: Don’t install them all, please. Better yet, only install those that truly deserve a place in your arsenal and you would pay for it anyway, even without the free trial. If you wouldn’t pay full price for a tool, don’t use it for free.
11. Another Round of Handshake Deals for Mandated Tools on Mandated Sites
It makes me sick to type that, really. With Capital One (as a lender) getting their DR tool on many websites, I expect to see OEMs insist on mandates with certain lenders and other third-party tools for “consistency” across the brand sites.
How to win: Do your research and put yourself first, and consider the impacts of compliance from a fully-informed position.
12. EVs Will Grow, Slowly
I’ve seen mixed insights on this one, and I believe moderation is the most likely outcome. EV adoption has been increasing more quickly in recent years than ever before, but with changes in government, buyer sentiments, lobbying, and inventory levels, I expect to see growth continue, albeit slowly. I do not expect to see a drop in EV adoption.
How to win: Keep a reasonable amount of EV inventory available when possible to allow for ongoing alignment with the market. Find ways to educate buyers on EV technology and ownership to dismantle misconceptions and fear.
13. Adoption of New Media Channels Will Grow
Think TikTok, Reels, and unheard of channels. Similar to Instagram 7 years ago, these new channels were met with skepticism but eventually adopted. Where buyer attention is going is where businesses will flock to.
How to win: I cannot stress enough the importance of having someone on the ground (in-dealership) responsible for your social image. That person whose role is to understand TikTok, Reels, how to shoot them, how to quickly react to trends, and create social media content for your brand that aligns with the personality of your dealership. This is a full-time job and it deserves the credit of a dedicated staff member.
14. Attribution Will Change, Again
We’ve lived through no attribution, over-attribution, and 101 other types of attribution. The expectation of digital went from “everything is trackable!” to finally arriving at the acceptance of the intangible. The full funnel is being acknowledged as part of creating the sale: the digital footprints, their previous dealership interactions, the sales team, the finance process, their Google Buyer’s Journey, the follow-up, and beyond. Attribution will become more of a qualitative and insightful metric than a 1:1 attribution of a sale or lead, which is way too shortsighted.
How to win: Continue to track as much as possible, but work with experts that understand what the data means, how it relates to your market, and how to make future marketing decisions based on the data available while also considering external and internal factors.
15. Local Markets Will Shine
What does it mean for your dealership? Only your dealership and your partners truly know. There are 101 predictions here and within the market that should be considered: put yourself first in your analysis.
How to win: See #14
16. Some Tech Won’t Make it into the Club
Think voice search for such a research-heavy purchase: nobody is asking Alexa about how many cup holders their potential SUV has. They’re asking how to convert 2 TBSPs to TSPs, what the name of that actor is on a new show, and basic queries.
Think about Blockchain, NFTs, and other Crypto-spurred technology. We’re seeing dealerships follow the steps of Tesla in accepting Crypto as payment, sure. I don’t think we’ll see mass adoption in 2022.
No, your customers still don’t want that one-time-use app to buy a vehicle from you.
No, your customers don’t want to make all of their choices based on country-wide information about vehicles that has nothing to do with their actual lifestyle.
How to win: Consider where your market is at, and where it will realistically be in one year. Consider factors like tech adoption rates, as well as population and demographic data when deciding what tech to take advantage of. Work with agencies that have a wide variety of client types in different (rural, urban, etc.) settings that can provide a comparative analysis to help your decision-making.
17. Transparency Plays Will Win
Dealers that use tools like DealerFX (that very literally show customers what is happening with their vehicle while in the shop for service) that increase service transparency will grow and continue to build long-term relationships with customers. They will have a higher customer LTV (lifetime value) because they are more likely to return to the dealership for future visits.
Better yet, these customers that are exposed to a positive new experience are more likely to share that experience with friends and family, creating a word-of-mouth referral system for an industry that is rarely shared in a positive light amongst consumers.
How to win: Dealerships that share both their wins and failures publicly will build credibility online. Blogs that share what has happened, where they fell short, how they helped customers, and beyond should all be a part of your content marketing strategy.
18. Playing Nice Will Work
The automotive industry can be incredibly cutthroat, even in smaller areas. I expect to see dealers move back into dealer trades that prioritize the customer, fair pricing strategies, and shared marketplaces.
How to win: Put the customer first in everything that you do, in a way that aligns with your dealership’s values. Remember, people purchase multiple cars during their lives and they’ll remember how they were treated during these times.
19. Franchisees Will Create Additional Locations
Almost all dealer groups with franchised stores also have an independent used vehicle retail location as part of their store lineup. Those that don’t will see the writing on the wall and begin to create exit plans and “side hustles” that allow freedom and flexibility, while preserving profits and prioritizing their own needs.
How to win: If you’re a franchise owner, consider the long-term impact of recent OEM initiatives for your brand. If you’re an independent dealer, take advantage of being “first-to-market” in your local area. Focus on solidifying your brand’s value proposition (or USP - unique selling proposition) and making it known through awareness efforts.
20. Privacy Will Remain Messy
With 2021’s changes to privacy across Google, Apple, and regulations, we’re seen big changes in the way advertisers attribute and understand data from campaigns. With changes like this, it historically has taken 1-2 full years for the dust to settle before more changes start to hit.
How to win: I don’t want to say “bury your head in the sand,” but don’t overthink it. We’re still able to make ads, we’re still able to access a ton of tracking, and understanding mix media modelling is on the rise. Stay calm and advertise on.
21. Dealers Will Get Creative With Digital Delivery
Similar to the points I made above, digital delivery is going to change - especially for independent locations. Our friends over at Auto City Fredericton have taken a cool and localized approach to delivery, with VIP Driveway Drop-Off; their service doesn’t matter if they bought in-person or online!
How to win: Meet your market where they’re at with solutions that cater to their needs and wants, not to those of the entire continent.
22. The Market Will Accept COVID-19
States, provinces, and countries have all handled the ongoing pandemic differently. Regardless, I expect to see the overall market sentiment around COVID and its impact “matter” less. I expect more revolt and more acceptance that it won’t be going away. I can’t wait to see the data. How can you make this easier in dealership? We can help!
How to win: Leverage all of the insights from points 1 - 21 through the lens of your dealership, your area’s rules and regulations, and your experience. Trust your gut, and don’t be afraid to ask for help.