The Automotive Industry might just be the bright spot for the economy in 2023 according to a Bloomberg analyst Connor Sen as he sights the potential effect the rebound will likely have on the country’s GDP through the next several quarters.
Jonathan Banks, vice president & general manager of vehicle valuations at J.D. Power issues a warning to Dealers to freshen up their customer engagement skills as the supply situation loosens up
Tiktok just released new Audience Insights in Tiktok Ads Manager where advertisers can now drill down into a good number of categories to glean insights such as:
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Kyle Mountsier, Paul Daly
Paul Daly 00:18
Good morning, it is good to be home. Home studios today, it's Thursday, November 17. We're talking about automotive as the economy's hope. Dealer customer experience atrophy and tick tock growing up. People really want to work. Abbreviated them when I put them in the actual show notes. When you say the whole thing, it just gets gets a little marble the mouth if you know I'm like, tip of the tongue teeth of the lips. Well, we're both home after spending felt like a really long time in a really short time, all at the same time. All at the
Kyle Mountsier 00:55
same time. I'm telling you what I was actually I was in the airport yesterday, getting ready to head home sitting there with the family and a couple representatives from Audi shift digital. Were sitting there and they were like, Yo, this conference goes hard. We know never been to something like this. Hey, we, we didn't realize it was gonna be like 730 to 630.
Paul Daly 01:20
Every Yes, yeah. Yeah, like Workday. It's a different way of going hard. Right? It's like when people say this conference goes hard. Like if it's in Vegas, or someone else we were like, wake up tired. No, you'd like you wake up tired because your brain was on for 13 hours the day before. And it's about to be off for another 13 hours. And probably worse than going out and staying late and having too many cocktails. in Palm Beach. When you go out. It's just like, pounds of very rich, delicious food. So it's more like just a volume problem.
Kyle Mountsier 01:53
Everybody's like, where did you go last night Meat Market? Yeah, that just sounds like a hurtin.
Paul Daly 02:00
Unbelievable. It's unbelievable. But it was really great to just see so much energy. And just so much intentionality. In the automotive space. We know we have so many friends out at use car week right now. little tear, we couldn't make it all work and be out there with you. So we're watching your LinkedIn and Instagram, etc posts with much envy. But please keep posting stuff because I searched used car week as a hashtag. And I was a little disappointed that I didn't see more on there. So hey, if our people are out there, we need to know what's going on. And the only way we know what's going on? Is is your
Kyle Mountsier 02:31
thing. Add the Add add to the LinkedIn FOMO comm Yeah,
Paul Daly 02:35
yeah, we need give us some more FOMO a couple of things. We are going to be taught giving some more details about sweet, you're in extravaganza, how much should we talk about this?
Kyle Mountsier 02:46
We've talked about it. I mean, you know, for you, we'll have a way to register the whole nine yards, we're gonna push it everywhere, it's gonna be a ton of fun, we might invite a few of you if we really, you know, if you beg if you plead all of those type of things. So come on.
Paul Daly 03:02
Very nice. Yes, we will be talking about that. Also have a webinar, our very first a soda webinar coming up. Give me more about that. So too, let's talk about some news. Give me a little bit of a broader view today. So automotive industry might just be get this the bright spot for the economy in 2023. According to a Bloomberg analysts, Carson as he cites potential effect of a rebound. And what that will likely have on the country's GDP through the next several quarters. So basically this, we know the there was a massive volume deficit as we struggle with supply, right. And that actually affected the economy substantially, you know, because even from a production standpoint, the cars don't count until they have a chip in it. So it can be fully built. It doesn't count until it's actually wholesaled to a dealer. So that hurt us the increase in pricing because
Kyle Mountsier 03:48
lots and lots of cars sit and shipped. And I'm just sitting there so it's
Paul Daly 03:52
people that told us I can't remember. And even if I could remember I probably wouldn't say it on the show. But people have told us like they literally are looking at like stadiums and football fields and big acreage so full of vehicles. Oh yeah, better wait
Kyle Mountsier 04:02
for chips, Kentucky the like Kentucky Motor Speedway is just like, a treasure trove of them. So yeah, it's
Paul Daly 04:10
and so so basically, most apply, the increase in the pricing of new and used cars accounted for 10% of the overall consumer price index increased. So the consumer price index is when they take a bunch of things, random things that people would have in their daily lives and are like, Hey, this is how inflation is working. This is how the index is growing. Automotive contributed 10% of the whole index, which is pretty substantial. Another thing owners holding on to vehicles longer means higher repair bills, higher repair expenses, insurance premiums, I didn't realize this could continue are affected by that as well.
Kyle Mountsier 04:42
So like your whole ecosystem grows in, you know, the pricing of a month of understanding like how much you're paying or putting out it's unbelievable. Yeah. And
Paul Daly 04:53
so basically the good news is is that as that reverses, which we know is always happening can supply starting to change the river versus true as well. So if output in November in December remains consistent just with what it was already in October, it's going to translate to a 10% quarterly jump, which could actually move the GDP like one to two points, which is awesome, because they're only expecting about four points. Automotive is going to be like. So, it also as that happens, inflation is ease which in turn, encourages the Fed to stop raising interest rates, which is good for everybody. So he says, there's still room to go with the auto industry is the best reason to hope for an economic growth for economic growth and inflation surprise over the next several months. Well,
Kyle Mountsier 05:38
we've been talking about this, that that automotive may not feel the recession, as, as as much as a lot of other verticals. And it looks like our economy is going to be helped by that, because of this waning supply issue. That is that is still like, we're still not all the way through, and that there's still enough pent up demand enough available resources, and especially, you know, clientele that are in the upper percentage of credit tiers, as well as income tier. So there's still a lot to be had from, you know, from an economic standpoint. So I think that the economy is actually kind of waiting and holding and it could be a reason why the economy stays strong a little bit longer. And auto maybe doesn't feel the recession as much as some other verticals.
Paul Daly 06:21
Yeah. I mean, what was it it was probably last year at modern retailer was called triple as we were talking to Alex Vetter about automotive is such a leading indicator that we don't really have a leading indicator to watch as the auto industry. So this is another example of that as supply increases, consumers are going to come back and you know, probably see a little bit different of an industry speaking of consumers coming back to a different industry. Segue Hold on. Hold on, Jonathan. Big surprise coming in three, two, right. Jonathan banks, Vice President and General Manager of vehicle valuations at JD Power, issued a warning to dealers to freshen up their customer engagement skills. As supply situation loosens up, this is a great quote. So I'm just going to read it right from the from his article says in the process, it is more than possible that essential customer engagement skills across the dealership environment have doubled, if not atrophied altogether, while New important competencies have failed to be nurtured. He's talking about in the process of having just complete control over the sale, because you're the one with the inventory. Yeah, right. If you don't buy it, the next person will, is like, it's very possible, we've lost the skills needed to engage the customer. And he says like a return to strategy and demand analysis, as the customer desire to engage digitally has become, he says strikingly clear, and their options to do so have also brought in. So people want to do things a little differently coming out of this supply, they want
Kyle Mountsier 07:58
to do things differently, but they also want a really good experience as as you have like a widening inventory, more available options, more places to shop, you know, consumer, you know, optionality, you look for the better experience. And the Wild Thing is, is that we've that not, I'm not gonna say the whole industry because we like we were talking to Bose odd Ford, Lincoln, they like they train every day, we were talking to another dealership where the General Sales Manager was at modern retail conference. He's like, we train every day on the process. And those dealers I think, are going to be the ones that stay ahead in this consumer engagement. But even just thinking, how are we training our people on did or digital interactions? How are we training our people on offline, offline and online interactions are something that has to be top of mind because customers are going to expect a heightened level of engagement? Really, honestly, not just because of automotive, but because of the rest of the verticals of retail, that are going to have to do something altogether different to engage new consumer demand in order to increase attachment to their brand. Yeah, like, target coming out yesterday and be like, things are not going to go well in q4 for us, well, they're not just gonna be like not, well, that's the end of q1. So q1 run right into q1, they're going to start to figure out they're going to try to engage customers in the new way. They're going to, you know, incentivize customers with new USPS with new discounts with new customer experience options. And so that's going to drive the demand of that and other verticals including audio auto audio, including auto audio T aware that other verticals are going to impact the customer experience expectations in auto
Paul Daly 09:47
target even I mean, if you look at what target we titled it was like two weeks ago, we talked about a store story, where target is revamping their new their new business, their new building model, they're building larger buildings. With more focus on this hybrid experience where you maybe order online pick up in the store, or you go to the store, and that's where the supply is, instead of having to ship it from, you know, a further warehouse. Again, it's this blend. So we talked about, you just mentioned customer experience in the showroom customer experience, you know, on phone and internet. But really the win is going to be the customer, the companies that focus on the fact that these are all coming together. And how do we manage the experience throughout the process, which is going to ebb and flow through digital through in person? Jonathan banks goes on
Kyle Mountsier 10:34
to say he talked. Yeah, he talked about how, like, there are new things, there are new factors at play that have kind of been introduced over the last couple of years inside and outside of auto that are not now you know, that maybe three, four years ago, you could have talked about as kind of like an advertising strategy. We do this. But now like we call it, table stakes, right? That that he called competitive requirements. So it's just table stakes of doing business, right. Like if you're not, you know, engaging, well online, if you're not using text enablement, if you're not doing all those things, you're just missing out on the table still be
Paul Daly 11:10
able to play. Yeah, yeah, he finally, you know, he goes back. And I love when people like bring history into the conversation, the Great Recession of 2008, he said, we came out of that new behaviors and technologies emerged for very similar reasons, right? You need to be efficient. Consumer Behavior shifted, he said, and when that happens, it does translate to more transparent and efficient marketing. As it serves consumer he's in he said, coming out of there in automotive, the change has served consumers, dealers, and OEMs. All better, because they paid attention to it. Man, speaking of paying attention to things segue. All right. Tick tock is grown up ever. So media platform,
Kyle Mountsier 11:54
everyone loves to talk about.
Paul Daly 11:58
They just released a new audience insights ad in their ads manager, where advertisers can now get more insight and data on the daily users throughout a lot of categories such as age, interest, usage behaviors, gender splits, interactions with influencers, I like that one. These people interact with these influencers, a hashtag interactions, and even like device type, right? It's who's using the iPhone who's using the pixel. And so basically, they're saying, we're going to let you know what the people that you're trying to target are into, which I think is cool, especially for a platform like tick tock. Because if you find like, hey, like a portion of our audience is into cooking videos, just pull that one out, ignore cooking videos, why don't you create some content around cooking? And show it to those people? And then see if you can kind of hop into there. I really liked that part. That's my favorite
Kyle Mountsier 12:51
part. Yeah, well, I think this this goes to we talked a lot about this, how creative and analytics actually are go hand in hand. They're not segmented and not separated. And so when you think about audiences, and analytics, and the ability to not just target but understand those audiences, from an insights perspective, and then place creative that makes sense for that audience. That's when the real horsepower behind things like what Elon Musk said a couple of weeks ago, he's obviously still in the news. But
Paul Daly 13:21
we haven't talked about Elon in a while. And that's just because he's so everywhere. We've literally said like, I just don't want to talk anymore. But
Kyle Mountsier 13:30
but a couple weeks ago, when he said, you know, creative ads are actually content. And so thinking about tic TOCs ability to leverage audiences and creative and put that into actual, like the ad be content, that's a winning strategy for any business at this point.
Paul Daly 13:48
Yeah, it really is. One thing that I think we pulled away from this creative track that we were just teaching is, personally speaking, is that the boundaries of what is creative, and what like the boundary of like, being creative, and connecting, are really starting to look pretty similar. You know, like, brand connection, things like that. But now, it's like, there are so many ways to be creative. And if you keep like all these micro connections in mind, like even if it's connecting over a secondary, or even a tertiary interest, that actually could be the thing that opens the door for someone to walk into your store, or become more familiar with you or want to build more relationship with you. So bad check
Kyle Mountsier 14:31
123 or four of those people that are somewhat influential in that community that also believes the same thing and I walk in, all of a sudden the community expands and you enter a new market segment. Hey, go.
Paul Daly 14:44
Well, that's how it happens these days. I don't know if you noticed, our buddy, our buddy Nathaniel, Greg, click. I wonder if their posts hit a million views. They posted it tiktoks Or an Instagram real. It was like 917 yesterday and basically had nothing to do with cars and their views. For like 300 views to under views 900,000 views because that is how the algorithms work these days. So, really the point is keep swinging the back Automotive is carrying the economy in certain ways you get to know a part of it every single day. Let's give everyone something to be proud of with this industry.