The world has entered the digital information age. Retailers in a variety of industries are now using advanced computer systems to enhance their ability to understand, communicate with and evaluate their marketplaces and to anticipate and respond to their customer's needs. Banks are using ATM machines to provide to their customers quick and easy access to their services 24 hours a day. Retail shops are using bar code scanners at their checkout point to gauge the types of product their customers are buying. Airlines are making extensive use of frequent flyer programmes to attract new customers and retaining those they value. In short, we are increasingly becoming IT savvy. Automobile dealers have to be just as savvy, if not more so, to keep their customers. Encircled by a "digital economy", prosperity is guaranteed only to those auto dealers who have the ability to adapt to this new age. In other words, to those that become "Cyber dealers".


The problem with the traditional automotive dealership is that most of them are isolated rather than networked businesses. It is true dealers have computer systems, but these systems contain only rudimentary data about customers, such as their most recent new or used car purchases. Most of the time these systems contain incomplete information regarding vehicle service histories. Few contain details like a customer satisfaction index, service satisfaction index and an index to describe national trends. Thus the traditional dealers have only incomplete and fragmentary information about sales details.

However, information technology has the potential to change this traditional model considerably. In the U.K and U.S.A, independent organisations have already set up IT based auto retailing networks through which they sell information to their subscribers much like your local cable television centre. An example of this are the 1100 odd auto dealers of California who access information through the J.D Power and Associates Power Information Network or PIN to access sales and other data about two competitors in their local marketplace. This allows dealers to benchmark their performance against an appropriate peer group thus helping them improve.

The fact that automobile dealers have been IT poor is because of the traditional automotive distribution system. Vehicle manufacturers over the years have created a system which is rich in inventory but poor in information. Blinkered by the thought that stock pressure sells cars, car manufacturers keep on supplying thousands of isolated independent franchises with products while keeping them dependent on the factory for almost everything. The rationale behind this logic is to limit alternative products a dealer could carry thereby limiting consumer choices and managing their behaviour.

Now, the problem is automotive customers have changed. The exponential growth of the internet and the world wide web has played its part in making automotive shoppers more astute. Using websites such as "autobytel.com", customers in the U.S.A and U.K can now choose the car model they want, the colour, the specification, the financing package and finally pay for the car on line. Thus customers are now becoming better informed than the sales staff in dealerships.

Dealers now have to make well informed decisions about what to stock rather than depend on intuitive judgement. They, now, have to formulate sales strategies based on what customers ordered rather than the traditional way of what they manage to sell. The use of IT can provide up - to - date information and fast searches of vehicle specifications thus matching as many customer requirements as possible. This fundamental change in consumer buying behaviour will be the driver of change for dealers to embrace IT. To sustain and improve their performance dealers will need to convert their repository of data into information, information to knowledge, and knowledge into competitive advantage.

IT will help the new age "Cyber dealers" to be more focussed. They can leverage their IT strategies to anticipate and fulfil customers needs and communicate with them throughout the vehicle ownership cycle. Everything from car sales to service, to finance and insurance will be customer oriented enabling them to meet the customer's entire transportation need.

"Cyber dealers" will be in a position to use their IT knowledge base to demand a greater say in decisions regarding national, regional and local advertising and marketing campaigns. They will be able to provide a greater input with regard to market positioning of new products. They will collect and interpret local market information about consumer wants and retail trends to influence car manufacturers into designing, modifying and customising new or existing products.

To conclude one can say that automotive retailing in the next century will be heavily dependent on information technology. Dealers will begin to "own" customer data and the information they extract from it. They will use this knowledge to take business away from competitors. The very definition of "weak dealers" then will be those who cannot compete because they lack adequate "information capital". Information, in the right hands, is gold. The 21st century automotive dealers will learn how to mine it and spend it.