Managing the Seasonal Sales Slump

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Seasons change and buying behaviours often follow suit. Understanding demand is imperative when you’re managing inventory. There are certain times of year when consumers have increased buying patterns; the holidays and tax refunds can encourage retail spending. However, there are certain times of the year that consumers are more conscious of their spending habits, especially for big purchases. Summer can be costly with family trips, warm weather activities and kids on a break from school. As these costs add up, disposable income decreases, leaving little room for a big purchase. Let’s look at how car dealers handle the demands of seasonal sales.

The American Market

Looking at the United States market, summer can be a slow time for a variety of sales, including cars. Managing inventory stock as a car dealer can be a juggling exercise. With the ups and downs of consumer spending, it is important to be agile. Car dealers need to be competitive, yet cope with fluctuations in buying and selling. Moreover, a car dealer’s inventory stock takes up quite a bit of space. There are large overhead costs at a car dealership so it critical that inventory stock in managed efficiently.

Spring and Autumn Trends

By looking at consumer trend data, it’s clear that there are two main peaks for car sales. The US springtime and autumn are laden with car sales, showing an increase up to 15%. There are several reasons for these peaks. Car dealers need to leverage these peaks to make sales. In autumn, lots of car manufacturers release their new designs and models for the year. This means that old inventory stock will lose some of its value. Car dealers need to be efficient to move that stock off their dealership grounds. However, once the autumn season comes to a close, so do consumers wallets for big purchases. The retail market swoops in to lure consumers to their stores for gift buying around the Christmas holidays.

The Used Car Market

Although auto manufacturers release new models in autumn, used car sales also follows this pattern. Used cars aren’t generally as expensive, but buying a car is still a large purchase for a consumer. Not only does the holiday season detract from car buying, but the weather compounds the slowness. When the weather is gloomy, there is dirty snow on the roads and the air is cold, people aren’t as interested in walking around used car lots. Car dealers often respond to this slow time by drastically reducing their prices. They try to push inventory stock off their lots and create enticing deals to get through this slump.

Depending on the region you live in and the weather patterns, car sales can change. The slump might not be as bad if you’re in sunny Florida where winters are mild and sun always shines. Otherwise, in the Arctic temperatures and snowy streets of a Minnesota winter, it might be harder to bring people to the car yard.

As a car dealer, it’s important to understand your market and plan for these slumps. Use the peak times effectively and leverage deals to get customers over the line.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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