By: Mark Hollmer
Are dealerships investing in artificial intelligence confident in their choices?
Roughly 81 percent of dealers believe AI is here to stay, and 63 percent view investing in AI as a critical move for long-term business success, according to Cox Automotive’s AI Readiness in Auto Retail Study released in October. The survey captured responses from 537 franchised dealership leaders.
Do they question whether they picked the right AI program? Do their technology vendors create uncertainty and sleepless nights? Do dealerships know how much money to spend?
If investing in AI is critical for success, then dealerships will be spending plenty in the months and years ahead.
It’s hard to quantify how much money dealerships are committing to AI because it depends on which capabilities they buy, said Impel CEO Devin Daly. A fully connected dealer-focused AI operating system with sales, service, marketing and voice options can cost more than $5,000 per month, for example, and “delivers significantly more value than an entire department of staff,” Daly said.
AI automation can cost businesses anywhere from $200 to $50,000 per month depending on what services they buy, according to Humming Agent AI, a company that provides AI voice agents and other generative AI for office processes.
Dealerships also lack consensus on how much of an investment to make. Some dealers are overspending on AI and others are waiting to see what works best among early adopters beforetaking the plunge, said Joe Shaker, owner of Shaker Auto Group, which sells brands including Dodge, Jeep, Mazda, Ford, Lincoln, Chrysler, Hyundai and Ram.
Some dealership owners and managers, like the rest of us, are learning about AI’s potential and power as they experiment. Feedback and shared ideas could make a difference between success and failure.
Would a support group of other dealership executives and employees trying to innovate with AI help them make good decisions?
The answer is an unequivocal “yes,” said Alejandro Wolniewitz, founder of The Dealer Collective, an online group housed on the community instant messaging service Discord.
Wolniewitz is a retail technology veteran, a former AutoNation Inc. finance director and co-founder of vehicle subscription company SimpleCar. The Dealer Collective, which began in earlyApril, is his attempt to create a free community where auto industry professionals can talk about challenges, opportunities and discoveries they make using AI.
“We’re tinkering with AI to build solutions [and] we believe in sharing everything we build with anyone who wants it,” Wolniewitz said.
A few dozen marketers, social media personalities, dealership general managers, dealer principals and auto industry IT employees have joined The Dealer Collective. Community members can use shared discoveries or tips as starting points or go their own way.
“We’re going to tell you exactly what we did and how we do it,” Wolniewitz said. “If you can follow a recipe, you can build it yourself.”
The Dealer Collective is a sign of what’s coming: industry-led support groups that help uncertain members share ideas, test concepts and make the best AI choices possible.