3 Things The Auto Industry Can Learn From Blockbuster

The year was 1997. 

Blockbuster looked down from its throne to scorn the new court jester. The jester danced with enthusiasm and grit, smiling warmly at the King of Video Rental. Blockbuster rolled its eyes and signed off on a late fee for Titanic. With few details to spare, the King later died a tragic death. The jester took the throne, and quadrupled the kingdom. The jester was Netflix, and his legend is clear: don’t get too comfortable or the joke will be on you.

Blockbuster enjoyed total dominance for years after explosive growth in the late 1980s—until Netflix came on the scene, poised to adapt to the times. In 2000, Netflix approached Blockbuster about forging a new path together, and Blockbuster quickly declined—only to end up filing for bankruptcy in 2010. 

If the rubble from a bulldozed Blockbuster could talk, it would issue a stern warning to your dealership....adapt or die!

Here’s what the automotive industry stands to learn from this tale:

Meet Customers Where They Are

One year post-COVID, Urban Science and The Harris Poll reported, "One-third of consumers (36%) agree that there is no reason ever to visit a car dealership again." In a lot of ways, car buying did return to the original method, yet key differences stuck around from shutdown.

For one thing, customers increasingly spend a large portion of their car-buying journey in the online research phase. Copious amounts of time on your website translates into moving the car-buying needle to digital retailing, and for most customers, abandoning that process at some point to go into the store. And once the customer hits your dealership, the in-store time decreases from multiple hours to roughly 90 minutes. 

Digital retailing has been a widely available option since COVID shutdowns, and now AI is creeping into the dealership model. Yet, somehow, many stores haven’t adapted to what’s now a five-year-old technology and aren’t poised to embrace what’s on the horizon.

Blockbuster ignored the dawn of streaming services despite its customers' changing interests. Today, kids don't even know what a Blockbuster store is. Could there be a generation unfamiliar with buying a car the way we know it today? Your customers are spending much of their shopping experience online. Make sure your entire inventory, of vehicles and accessories, is readily available in that space. 

Adapt

Mark LaNeve, former head of sales, service, and marketing for Ford, gave The Detroit Bureau a sobering perspective. “As we begin to see how the pandemic has changed society”, LaNeve says, "the shift to online car buying is at least three years ahead"...of where he expected it to be. 

With that in mind, dealers have no reason to think a heavy AI presence in the showroom is years down the road. Blockbuster made the mistake of thinking consumers would never abandon the old method of watching movies. You can call it nostalgia or stubbornness, or you can just call it closed for business. Consumers, particularly of the next generation of car buyers, rapidly adapt to new technologies and your store has to as well. 

Dealerships can adapt preemptively by focusing on creating exceptional customer experiences both online and in-person, with seamless transitions.

Be Willing to Change Everything

A word to the wise from Blockbuster's demise: hold your brick and mortar loosely. Embrace changes and technological advancements to position your dealership to thrive. 

OEM Consultant, Jason Ludwig, recently attended NADA and remarked on the changing nature of the industry. “AI was everywhere. One could imagine that any day now, car buyers will sign into dealerships at touchscreen displays, accessing transactions born from AI-driven resources. With one final vehicle inspection, finalizing their transaction might be done by touching an icon and accepting the keys…from a robot. An overdramatization, yes, though not by much. Still, it’s an image far removed from what we see in our daily interactions with dealerships all across the country. What we see more closely resembles 1980 than Stardate 41153.7,” Ludwig concludes. 

“The identity crisis is coming to an end very soon. The balance of consumers invested in connectivity-based car-buying has yet to outweigh Baby Boomers and Gen X, though I predict the shift will happen overnight.”

Can you hold on to your paper and pencil way of selling cars? Sure. The question is, at what expense?

Insignia Group Can Help

Today, accessory sales are better positioned for success as customers research their options. The ability to add an accessory to the car digitally and view it from multiple angles is more attractive than ever. Customers can toy with accessory packages without pressure from a salesperson. Presented correctly, accessory sales will skyrocket along with online car purchases. 

Our integration with major digital retailers covers all your bases and allows for a seamless transition when customers decide to come into the store. Schedule a discovery call with us today to see how Insignia Group can support your accessory content today.