2022 has been an interesting year for automotive dealers. We saw prices peak for used vehicles, we are witnessing an increasing availability of new vehicles, and we are seeing how interest rates affect buying behaviour.
But what about 2023? What will 2023 bring? Here are things that Leadbox is predicting to happen.
The car is the star. It always has been, and it always will be. However, during the inventory shortages caused by supply chains in the last 3 years, the car was no longer the star, but rather ‘availability’ was the star.
Availability was so bad in 2020 and 2021 that consumers were forced to ‘take what was available’ if they needed to buy a car. As we have seen, vehicle choice was so limited that used cars actually increased in value.
However, as more inventory becomes available and vehicle prices decrease, Dealers will need to revert to previous ways of advertising and marketing their vehicles, that is to say, showing the right car to the right person at the right time. And that’s what inventory advertising does.
Apple’s iOS 14.5 update was published in April of 2021, which was a blow to a Dealer’s ability to properly target in-market shoppers. Some would argue that the effectiveness of digital advertising targeting has never fully recovered.
It was so bad that Meta forecasted that the headwinds of the iOS 14.5 update would provide a “headwind on [Meta’s] business in 2022 to the order of $10 Billion.”
All this means that dealers will need to increasingly use their first party data to help with the targeting of new customers.
Fortunately, first-party data is readily available with Dealer’s CRM and DMS. We even wrote about how Dealers can get it and how Dealers can use it.
The deadline is set. On July 1, 2023, Google Universal Analytics will cease to collect any information, and Dealers will have no choice but to use GA4. On the surface, this may be a simple change of software. However, GA4 does not behave like Universal Analytics, and Dealers will have a learning curve.
Further, any reports or integrations that rely on universal analytics will likely have issues after the July 1 deadline. While many vendors are already prepared for this (like Leadbox), many of the Dealers’ self-created reports or integrations may need to be updated.
Lastly, migration from Universal Analytics to GA4 is not automatic. Events, goals, content groupings etc, created in UA do not automatically translate to GA.
The low inventory environment during the last 3 years has been a unique time for Auto Dealers. Now that inventory is refilling lots and increasing competition, Dealers will need to revert to strategies and tactics from pre-COVID times.
What this means is that Google’s Auto Shopping micro-moments from 2015 are back:
Tactically speaking, this means dealers will need to:
2022 was a unique transition year from the boom of loose monetary policy, low inventory and low-interest rates. One year later, the government has closed their wallets, inventory has begun to flow back to Dealers’ lots, and interest rates are higher than we’ve seen in many years.
2023 will be like a reversal to pre-pandemic operations. Dealers must remember how they used to operate with higher competition to succeed.
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