Arnold Clark on lifting out of lockdown

Written by Alan Black

For a man running a vehicle leasing operation unable to deliver any new vehicles, Jim Blair is keeping extraordinarily busy.

Jim is Operations Manager at Arnold Clark. The brand is a long-established household name in Scotland, and has operations throughout the UK. To give you an idea of the scale of the challenge Jim is facing: Arnold Clark is the largest family-run independent car dealer in Europe.

How business is running right now

Let’s start with what’s open. On 12 June 2020 in Scotland, the business is restricted to aftersales (service to you and me) and car rental. The vehicle leasing team is also working full-tilt, taking orders for new fleet deliveries and arranging returns when vehicles reach the end of their agreement.

But what about the main event, the showrooms?

In England, car retail started to reopen on 1 June. So when will showrooms fully reopen in Scotland? Jim explains: “We’re fully prepared, and everything’s ready for the official announcement. However, we’re also very conscious of what’s changed for our customers – with their physical and mental health, their family life, and their finances.”

Then there’s the business of getting vehicles to the right place. “A big issue for us – and our customers – is what to do with a vehicle that’s come to the end of its contract”, says Jim. “The obvious answer is to leave it where it is, at least for now. But that creates a real headache with insurance: are we responsible, or is it the customer’s job?”.

Arnold Clark had a simple answer: remove the problem completely by arranging for safe vehicle collections. No brand messaging worries. No contractual complications.

Clear messaging is key

When it comes to the collection, customers know exactly what to expect. This makes sure there are no unwelcome surprises, and keeps everyone safe when a member of the Arnold Clark team arrives to collect the keys and the vehicle. Part of this is down to the way the business handles training. “We’ve prepared incredibly detailed training videos for our staff, detailing the steps they need to go through”, explains Jim. “We’re now looking at taking some of that video content and sharing it with customers, allaying any fears and explaining what they can expect.”

This kind of transparent ‘this is what we do’ messaging is gaining a real hold. IHG – owner of the Holiday Inn brand – has launched a Clean Promise, and is open about the products and processes they use, right down to the brand names. A few well-chosen examples can go a long way.

Socially distanced showrooms

Looking at the competition, some dealerships in England are offering unaccompanied test drives. The customer books a socially-distanced slot online, and then picks up a sanitised set of keys at the allotted time. And some car hire companies are offering visual ‘proof’ that a vehicle has been sanitised – for example, by placing visible seals on the doors to show nobody’s entered the vehicle since it was cleaned. This throws up another question: what part will hygiene play in the customer’s perception of value?

Really, it’s about establishing trust and understanding how people feel. Jim explains, “We’re expecting some customers to feel quite unsure about getting in a car again. A recent survey by the Chartered Institute of Personnel and Development (CIPD) found that around 44% of people are anxious about returning to work, and 31% are anxious about their commute.

“To help customers, we’ve already set up free car rental for NHS workers during lockdown, and we could see flexible day-to-day rental being really useful for people who only need to travel to work occasionally.”

But what will demand be like when the showrooms open again? And what will people look to buy?

One possibility is that many more employers will offer a company car. If cycling or walking aren’t possible, it’s hard to see how people will get to work, given the likely drop in capacity on buses and trains. Another is that travel bans might see company car mileage go down.

The role of reassurance

On a final note, Jim is optimistic about the shift to electric vehicles. “For some, range anxiety has stopped them from seriously considering an electric vehicle. However, as battery capacity has increased and chargers have become more plentiful, it’s not the blocker it once was. And this constant evolution of the technology helps make the case for leasing – if you’re worried the ‘next big thing’ in electric vehicles could be on the market soon, leasing removes the worry”.

And removing worry is going to play a big part in lifting the world out of lockdown. It’ll be intriguing to see how many ‘physical’ brands adjust their messaging and push reassurance to the fore – we’ll find out soon enough.

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