The use of artificial intelligence (AI) in the automotive industry has become commonplace in the 21st century. Whether it’s Japan using robots in their manufacturing processes or the United States developing self-driving cars, AI in the auto industry is a worldwide occurrence.
Recently, Canada’s Used Car Week conference took place, and AI was a topic of discussion. Ray Gil, Executive Sales Manager at Impel, an AI-powered customer management system serving over 5,000 car dealerships, spoke about dealers being more open to using AI in their business. He also provided proven examples of dealerships successfully using AI, which we are going to list, and explain the importance each benefit can have on your dealership.
How Does AI Benefit Car Dealerships?
There are 6 benefits AI offers car dealerships:
- Personalized customer experience
- Lead generation and management
- Web chat
- Enhanced vehicle imaging
- Inventory management
- Customer outreach
Personalized Customer Experiences
The first step in a car buyer’s journey is the research phase, when they’re browsing different dealerships and deciding which one has the right car for them. According to Gil, one of the biggest advantages AI offers car dealers is its ability to deliver highly personalized customer experiences. AI-powered systems can analyze the customer data platform (CDP), which is software that creates a complete view of all customer activity and interactions with your website throughout the entire customer journey. This allows dealerships to adjust their marketing efforts and sales strategies to meet the specific needs of each customer.
This means that AI can recommend vehicles to customers based on their past search history, which makes the shopping experience more relevant and engaging for them.
Lead Generation and Management
Once you have a potential customer showing interest in your inventory, your next step would be to turn that lead into a sale. The biggest benefit AI has on lead generation is being able to respond to customers after work hours and on weekends. Depending on the situation, the sales representative might be away from the office and unable to respond until the next day or Monday (if done on the weekend.) If you're using an AI-based lead response system, you’ll be able to respond to customer inquiries within a few minutes via text and email.
Ray Gil provided an example of a dealership who had staff members say they couldn’t make phone calls to leads because they were busy replying to other emails and texts. After using Gil’s Impel AI system, the AI system responded to all texts, allowing sales reps to contact other leads through phone calls.
This is good for sales reps, as it helps them reach more leads than they could before. They can make phone calls to other leads, while AI responds to texts and emails. It's basically like having an extra sales rep on your team.
Customer Outreach
Another benefit Gil highlighted was AI’s ability to reach out to people who showed an interest in your inventory. He said, “It's not a great feeling to have to reach out to somebody 7 times before they end up responding. But the great news is AI doesn't have feelings or cares. It's just methodical about its process and making sure that it's engaging customers as much as it can.”
This basically means that AI has no issue sending multiple reminders because it has no emotions. Its only focus is getting the job done. While we may not like to double text someone or feel like we’re bothering customers, AI systems don’t care and will do the task for you.
Web Chat
When you visit a website, a pop-up box will appear and ask if they can help you with anything. You can type your question in the chat box and receive a response almost instantly. AI-powered chatbots and virtual assistants can engage with potential customers in real time, answering questions, scheduling test drives, and even assisting with the beginning stages of the car buying process. This improves the efficiency of the sales team and also ensures that there are no leads left unattended.
AI web chat systems are also capable of translation. According to Ray Gil, his AI system (Impel) is fully translated. “If you speak Punjabi, whatever language, it will come back and actually respond back accordingly for sales. If the customer does inquire in a different language, then it will respond back in that language as well.”
The overall use of AI chatbots is great for sales representatives, as it allows them to focus on other operations while AI responds to all inquiries. The AI system will send the inquiries from the chatbot to the sales reps, allowing them to reach out as soon as possible.
Enhanced Vehicle Imaging
As the saying goes, “A picture is worth a thousand words.” This is especially true when showcasing your inventory. Unless you have a professional photo studio at your dealership, you’ll more than likely have to take photos of your vehicles on your lot.
AI photo editing tools can be used to edit photos of a vehicle that was shot in an area with a crowded background. Gil states, “We really need to put our best foot forward when it comes to actual vehicles on the website. So now you can actually start to do things like taking a vehicle that shot outside with a lot of background clutter and distractions, and by leveraging computer vision AI, you can do things like edit out backgrounds, put it on a nice, clean, consistent environment.”
This is great for dealerships who have nice looking vehicles, but might not have the best looking lot. AI photo editing tools can get rid of other cars in the background, items on the floor, or anything that gets in the way of a perfectly nice photo.
Inventory Management
Inventory management is crucial for car dealerships, and AI can significantly simplify this process. AI systems can analyze market trends, customer preferences, and historical sales data to predict which vehicles are likely to be in high demand. This allows dealers to optimize their inventory, ensuring that they have the right variety of vehicles on their lot to meet customer demand.
This helps reduce the risk of overstocking certain models and maintains a balanced inventory, which may lead to improved profitability.
Should My Dealership Invest in AI?
The use of AI in car dealerships offers a large amount of benefits. Although Ray Gil is using examples of dealerships benefitting from his AI system, there are numerous AI systems like Fullpath, DealerAI, and Numa that offer similar benefits.
While car dealerships can greatly benefit from AI, you also need to consider pricing. You’ll need to spend a good amount of money on these systems, and if your dealership is tight on cash, you may want to hold off on investing.
You might also just be a traditional dealer who likes to do things the old-fashioned way. In that case, AI might not have a place in your business. However, as AI technology continues to evolve, dealerships that embrace these innovations and stay up-to-date may be in a better position in the competitive automotive market.
Whether you’re interested in investing in AI or not, one thing you should invest in is your inventory. If you’re a dealer looking to buy or sell vehicles, you can click the button below to speak with our dealer registration specialist to get you registered with Big Valley Auto Auction.
Not ready to talk? That’s okay! First, learn more about what it’s like to buy and sell at Big Valley Auto Auction by clicking the image below:
