Jake’s looking to buy a used car, so he heads on over to Google and searches for dealerships near him. He opens up a few dealerships’ websites (including yours) and browses them until he shortlists some cars he’s interested in. 

After a couple of weeks of research, Jake eventually reaches out to your sales team, asking for a viewing and test drive at the nearest site of a car he’s interested in. The car isn’t at his nearest dealership, so your salesperson requests to have it moved to the desired location.

Jake visits the dealership on the day the car arrives, and after taking it for a test drive and inspecting it, he buys it.  

That’s an ideal omnichannel experience—it meets customers where they’re at and reduces friction from their shopping journey. Pre-COVID-19, these experiences were a “nice to have.” in automotive retail—but they’ve now become fundamental to any good sales strategy.

What does omnichannel sales mean for dealerships?

According to insights from the latest EY Mobility Consumer Index (MCI), which surveyed 15,000 consumers across 20 countries, dealerships remain vital for delivering omnichannel experiences. Despite the digitisation of shopping experiences, customers still want to see cars up close, kick the tyres, negotiate, and take a test drive before closing the deal.

In the EY MCI report, 66% of consumers stated their desire to physically experience the car at a dealership, while 61% wanted to complete the sale there—a number that increased from 54% in 2021 during the pandemic. So, although online purchases are up (in fact, 25% of the surveyed customers report buying cars online), the majority of customers value the physical experience dealerships offer.

Unsurprisingly, offering omnichannel experiences introduces complications for dealerships, especially for multi-site ones. You’re now communicating with customers across both physical and digital channels and selling them inventory spread across locations.

Here are some reasons why that can be challenging:

The challenges of decentralised logistics management in multi-site dealerships

Multi-site dealerships let customers choose a car from their entire inventory, but the problem is that this stock is scattered across different locations. Consequently, omnichannel sales complicates both inventory and logistics management for multi-site groups—vehicles need to be moved across sites and displayed in prime locations, and you’ve got to keep track of sales and coordinate viewings at each site.

Now, if your dealership takes a decentralised approach to managing these logistics—where each site is operating independently—you’ll likely face challenges like:

• Unnecessary movements. Decentralised logistics management increases the likelihood of unnecessary movements. For example, let’s say you move an in-demand car from a prime location to a site with less demand, but the deal doesn’t close. The car has now been moved for no value, and it’s left at the second location. And in this example, it’s been moved from a prime location with more footfall—meaning it might take longer to sell at the new site.
  
  
  

• Inefficient inventory management. If each site is operating independently, your sales teams might lack visibility into your stock’s availability and performance across different locations. This can lead to various non-ideal consequences—e.g., a salesperson at one location might promise a customer a car, thinking it’s available at another site, but it’s already been sold. Or, one site might order more stock for a vehicle after selling out without knowing that it’s available at another location.
  
  
  

• Missed opportunities for cost-effective solutions. Managing each site independently means teams at a given location lack insights into other sites' inventory, customer demand, and vehicle movements. Consequently, each location is prone to making decisions that don’t account for your wider stock availability and logistics planning. For example, dealerships might not allocate stocks across locations based on accurate demand data, leading to overstocking at some sites and understocking at others.
  
  Decentralised logistics management also means the group isn’t coordinating the movements of vehicles and parts, which can lead to inefficient routing or duplicate shipments.  

The bottom-line impact of decentralised logistics management

Operational inefficiencies, moving cars more often than necessary or for no value, and decisions based on inaccurate data will all hurt your bottom line. 

Let’s take a closer look at the cost of wasted movements.

An average movement cost varies significantly based on the method used. Driven third-party logistics (3PL) providers typically charge around £100 per car, while transported movements are higher, often exceeding £150 per car. Internal drivers or transporters cost between £35 and £55 per car. However, these costs escalate for journeys over 50 miles due to a base charge supplemented by a per-mile rate. For movements exceeding 100 miles, the costs become particularly steep.

Movement costs add up quickly, especially considering that up to 50% of used cars sold at multi-site groups are moved between locations as part of the sales process (according to Jigcar’s internal data).

These costs compound further when movements take longer than expected (which, in our experience, is often the case). Multi-site dealerships typically set a realistic target of two days to move a vehicle between locations. However, in practice, it often takes around four days.

This delay can result in additional losses of approximately £30 per car per day due to interest fees and car depreciation, as per internal estimates from a senior team at a leading AM100 group.

Therefore, when car movements take longer than planned or occur more frequently than necessary, the margin on the vehicle can be impacted a lot! 

How to improve profitability with a group-wide strategy

A group-wide strategy helps multi-site dealerships save costs, reduce inefficiencies, and deliver frictionless omnichannel experiences to customers like Jake. 

Here’s how you can improve profitability with a group-wide strategy:

• Negotiate with 3PLs at the group level. When your dealership group negotiates as one entity rather than as individual sites, you’ve got more negotiating power with the 3PL provider. This means you can often negotiate better rates, terms, and even services (such as a commitment to faster delivery times).
  
  Using a single 3PL provider across all your sites also helps standardise inventory and logistics management, laying the groundwork for centralisation. For example, let’s say the 3PL has its own inventory management software. Since they’re responsible for moving all your stock, your inventory levels and locations are updated in real-time.
  
  
  

• Adopt a centralised logistics management strategy. This means having a group-wide strategy that governs vehicle movements and placements—including when vehicles are moved, routes to be taken, how stock is distributed across sites, etc.
  
  Jigcar lets you manage multi-site logistics from a single platform, centralising movements across all transport types in one place and giving you complete visibility into the cost and speed of each movement. Jigcar digitises workflows, eliminates admin work, and gives teams across sites the insights and technology they need to develop a group-wide logistics strategy.

  
  

  
  

  

• Lay the foundation for accountability. Multi-site dealerships have complex logistics processes, so holding people accountable at each stage is crucial. But before you do that, it’s essential to introduce the right systems—ones that help people track and measure the KPIs they’re accountable for and help them make informed decisions.

  
  

For example:

• If you’re making someone responsible for reducing movement costs, they’ll need insights into the costs of each movement. They’ll also need to know which movements resulted in no value, as well as supplementary data such as the prime locations for selling specific stock.

  
  

• If you’re making someone responsible for improving movement speeds, they’ll need tools to track the speed of each movement and insights to determine optimal routes.
  
  
  

• Use stock turn as your North Star. Stock turn is one of the most critical KPIs in automotive retail—it’s directly linked to your bottom line and reflects your business’s underlying efficiencies.
  
  

Factors such as the speed of your sales process, pricing strategy, stock placement, and the speed and efficiency of vehicle movements all impact your stock turn. This means that if you’re effectively optimising efficiencies across your business—including logistics and inventory management—these improvements should be reflected in your stock turn.

Learn more about this: How accelerating stock turn unlocks profitability in automotive retail.

While developing a centralised logistics strategy might be initially daunting, it doesn’t have to be.

Jigcar—an AI-driven logistics optimisation platform built for automotive retailers—can do the heavy lifting for you. Multi-site dealerships use Jigcar to manage their logistics across sites and transport types in a single place. Get deeper insights into the cost and status of movements, make sure you place cars in optimal locations, and remove friction from your logistics process. 

Book a demo with us