Order-and-wait process for new vehicles will become the new normal, analysts say


Order-and-wait practices have become the norm during the current vehicle-supply crunch and will become the way most people buy vehicles in the future, auto retailing analysts say.

Automakers have been forced to restructure inventory management as customers wait weeks, months and even years for their preferred vehicle. In the process, companies have learned that having a leaner inventory can be more profitable than the old norm, they said.

“Get used to it,” said John Bardwell, an automotive product strategist at Bond Brand Loyalty in Toronto. “This is not going to go away. This is how Apple and Tesla have become so profitable.

“They are selling maybe a few less vehicles, but they’re making full margin on every one.”

Buyers have learned from industry disrupters such as Tesla, Rivian and Lucid that they should expect to wait for their vehicle, said Jeff Williams, president of Absolute Results Productions Ltd., an automotive sales training and marketing company. Once the inventory shortage has eased, dealers of legacy automakers should plan to have a six-month backlog of orders in the pipeline, Williams said on the June 24 Automotive News Canada podcast. Every order ensures a future sale and that the customer will not defect, he said.

“If you don’t have a pipeline of orders, you are failing for tomorrow,” Williams said.

Dealers can expect to benefit from smaller, less expensive dealership buildings and from reduced carrying costs by having a much smaller inventory, Bardwell said. The trick, he said, will be to find the sweet spot of smaller supplies while being able to deliver a vehicle for customers who can’t wait.

A FRIEND, NOT A CLOSER

Bardwell and Williams both said the key skill for sales staff has shifted from the ability to close a sale to nurturing long-term relationships through gaining and retaining the trust of every buyer.

“Now, it really becomes about relationship management,” Bardwell said.

Although order-and-wait is a “completely new experience” for automotive retailing, he said, it is common in other sectors of the economy. “Think about what people do [when they buy] condominiums, what they do for sofas [when they choose fabrics and then wait],” he said. “The ordering becomes an event.”

“The thing you want to do is to keep the excitement high.”

A digitized ordering process opens the door to greater transparency, Bardwell said. Buyers could be given the ability to track their order rather than call the sales consultant — perhaps even enabling the buyer to see the status real time, he said.



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