For dealerships across the country, the restocking of new vehicle inventory has been slow. As 2021 models gradually make their way to U.S. car lots, dealers have the opportunity to replenish a thinning inventory, but they must also determine the most effective way to do so. A 2017 study at the University of Pennsylvania analyzed the scarcity effect in auto sales to determine how a full inventory can impact buyer perception. It offers valuable insight for dealers who want to tailor their selection to the psychology of car shoppers.
The Appeal of a High Inventory
Naturally, dealers want to have enough cars on their lot to meet the needs of their customers. A full inventory can prevent your dealership from running out of stock, but there’s more to stocking your lot than simply keeping up with demand. When a car shopper sees an abundance of vehicles on display, they’re more aware of that model, and might assume that it must be popular if you’re willing to keep it in stock. Your lot acts as a billboard that drivers can see from the road, and if they see that they can find well-regarded vehicles at your dealership, they should be more likely to stop by when they enter the market.
The Scarcity Effect
It’s also possible that you can have too much of a good thing, however, and the sight of a tremendous inventory might not make a positive impression on all car shoppers. If buyers see an overabundance of one particular model, they might infer that it doesn’t sell quickly due to its quality. Luxury dealers should also consider that buyers sometimes place value on rarity, and seeing so much of one model could signal to them that it’s nothing special. Fortunately, the study notes that the appeal of rarity is not necessarily as applicable to more mainstream options. More concerning, however, is the possibility that a customer will see a large inventory and assume that the vehicle will still be available if they continue shopping around and circle back, and they might also expect the price to drop over time.
More Variety, Less Duplication
The study concludes that variety is key to keeping a high inventory without losing the sense of value and urgency that motivates shoppers to act. Rather than stocking up on one particular model, the findings suggest that expanding the selection with other vehicles as well as different trim variants of that model can help avoid the negative conclusions that buyers could reach with a high inventory. Of course, you’ll also have to consider the specific interests of car buyers in your community, as the actual demand will vary from market to market.
Strong Automotive Merchandising has the tools and expertise necessary to move your inventory, so contact us to learn what we can do for your business. You can also subscribe to Next Day Traffic for more industry insights.