After years of sustained shortages, dealership inventory levels have started to normalize in 2023. In fact, advertised inventory increased sharply in recent weeks, according to S&P Global Mobility reports.
While 2023 model year inventories are decreasing, the 2024 MY inventory is growing at a faster rate than the 2023 model year sell-down, according to analysts. To maximize the profitability of their existing inventory and avoid paying floor planning fees, it’s critical dealers prioritize and proactively market the aging inventory sitting on their lot.
By leveraging predictive analytics to proactively market their aging inventory, dealers can increase their turn rate and:
Increase sales
Reduce costs
Improve profitability
Improve customer experience
Maintain a competitive advantage
1. Increase Sales
Why wait for buyers to come in and shop your dealership’s aging stock?
The obvious benefit of proactively marketing a dealership’s aging inventory is the opportunity to intentionally target prospective buyers. By leveraging predictive analytics fueled by comprehensive sales and marketing data, dealers can identify which customers are most likely to be interested in their existing inventory.
From here, dealers can prioritize and deploy personalized advertising campaigns that reach buyers at the right time, with the right messaging, enabling them to move aging inventory before it sits too long on the lot.
2. Reduced Costs
Reducing aging inventory is more than just clearing space – it’s a major cost-saving tactic.
Beyond just avoiding floor planning fees, dealerships can significantly reduce the costs associated with storage, insurance and depreciation by moving vehicles quickly off the lot. By proactively prioritizing their marketing efforts and identifying their best sales prospects, dealers can shorten the sales cycle and mitigate losses while improving their ROI.
Implementing this sort of data-driven, dynamic pricing strategy that adapts alongside market demands enables dealers to continuously maintain their competitive advantage while maximizing the profitability of their existing inventory.
3. Improved Profitability
With increased sales and reduced costs comes improved dealership profitability.
It’s easy to see how dealerships that integrate inventory management technology and sales forecasts into their sales process can optimize their inventory and turnover rates. By enhancing the efficiency of sales teams and providing them with higher quality leads more likely to convert, dealerships streamline their operations and grow their profit margins.
What’s less obvious are the additional profit opportunities associated with a three-car deal.
By taking a proactive approach, dealers can restock their pre-owned inventory by strategically targeting customers who are also most likely to trade-in their current vehicle. This enables dealers to move their existing inventory, acquire an in-demand trade-in and sell that used vehicle to maximize their gross profitability.
4. Better Customer Experience
Proactively marketing aging inventory doesn’t just boost sales opportunities, it also improves the dealership customer experience as a whole.
Staying ahead of buyers returning to market and tailoring the shopping experience with recommendations based on each customer’s behavior makes the sales process more personal and efficient.
Plus, leveraging the wealth of data you’ve collected to understand customer pain points and preferences enables sales teams to predict which vehicle they’re most likely to purchase, resulting in a sales experience that’s inherently more customer-focused.
5. Competitive Advantage
Maintaining a competitive advantage in the automotive industry requires agility and strategic foresight. Proactively marketing aging inventory is an excellent example of how dealers can stay ahead.
By anticipating market trends and consumer needs, dealers who focus on moving their older inventory can not only keep their lot fresh with new models but also prevent the buildup of models that may soon be out of favor. This approach allows dealerships to differentiate themselves by offering a data-informed, personalized shopping experience that many of their competitors lack.
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In today’s competitive market, forward-thinking dealerships know that aging inventory isn’t just wasted space – it’s untapped potential.
By tapping into their customer base and proactively marketing their aging inventory, dealers are empowered to increase their turn rate while simultaneously maximizing their ROI. With this data-driven approach, dealers can transform aging stock from a liability to an asset.
Want to learn how Mastermind can help your dealership take a targeted approach to selling your existing inventory while acquiring in-demand trades? Contact us for a free demo.
