A Kodak Moment for the Automotive Industry | Dealers Compressed Episode ELEVEN
Adapt or die. Which will you choose?
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Transcription
Seismic change and the will to thrive; That's how I would summarize the final two chapters of this book.
Dale addresses the growing momentum of ride-sharing services and self-driving vehicles and their potentially devastating effects on the dealership model. It's undeniable that every week there are new announcements to be made amidst such a rapid progress in these areas and Dale has held his tongue, until now.
He says "It was the deafening and scary silence" of the lack of dealer related conversation around this topic that has him moving now. At the very least, to offer a public and cautionary look at the reasons the emergence of such things casts a shadow over automotive retailing. Both ride-sharing and self-driving technology seem to be a good fit for the increasing urbanization of the US. Rising cost of ownership and overall inefficiency of use are two other areas Dale credits for some of the momentum enthusiasm here. He doesn't have all the answers, but he knows that if dealers stick their collective heads in the sand much longer, those answers may never come.
Being an avid student of history, Dale recounts the cautionary tale of the Eastman Kodak Company who invented digital photography back in 1975, then refused to acknowledge its growing momentum. They thought they had plenty of time and that strategic error proved tragic as they filed for bankruptcy in 2012, laying off over 3000 employees.
Dale concludes this thought by admitting while it's difficult to know how these new, emerging technologies will play out, they may very well happen faster than we think...which is, after all, one of the main reasons Dale wrote this book in the first place. You see, to Dale, the future is more about transportation and less about selling and servicing.But he didn't end the story there...
You see, Dale's a realist, but he's also an optimist.
In the final chapter of the book, Dale brings encouragement to dealers from his experience as a farmer. Yeah, you heard that right, Farmer Dale. You see, a few years back, he purchased a property as a family vacation spot. It was a farm property, and as such, Dale became a legal farm. Not too long after that, he met Todd. You see, Todd's family had leased the property to farm from the previous owner and after some research, he and Dale reached an agreement and Dale and Todd became fast friends. Rumor has it, that Todd actually let Dale drive his tractor.
So Dale began talking about a book that he read called "The Blue-Ocean Strategy" which was about companies finding a differentiator; something they were willing to do or a way they were able to deliver a service that really set them apart from the competition and Dale used that book to tie back to Todd's family and his family situation that, you know, in the industry, farming has faced recessions and consolidations, big-time margin compression, very similar to what dealers are facing and most of Todd's peers went out of business or sold to these bigger companies for not-much at all.
But not Todd and his family. Instead, they acquired more land. They focused on specialty crops and Christmas tree farms and the things that would set them apart. Dale's happy to report that today, Todd's family is doing really well and his family's future looks viable and secure.
He hopes that dealers will take a cue from this story and realize that even in the light of all this industry change and compression, that dealers can find their blue ocean.
