How traditional SMEs can harness AI to transform their business

Ken Lee, Managing Director of Car Search

The prediction that 300 million jobs could potentially be lost or degraded due to Artificial Intelligence (AI) in the future is certainly cause for concern. However, for traditional SME’s still yet to fully embrace digital transformation, the rise of AI presents them with an opportunity to adapt and become agile to remain competitive in the era of disruption.

According to the Singapore Business Federation’s National Business Survey 2022/2023, businesses remain committed to driving business transformation, with 96% of SME’s rating it as either very important or somewhat important.

In a separate study, the ASEAN SME Transformation Study 2022 revealed 3 in 5 SME companies plan to continue digitalisation and tapping digital economy opportunities while 66% expect to spend more on technologies such as Digital Marketing/Social Media and Technology/Network management.

It is good to know that SME’s have a mindset of wanting to improve themselves and embrace the digital revolution. However for some industries and organisations, conforming to traditional business methods and maintaining stubborn mentalities make the transition that much harder.

Old Habits Die Hard

Take the used car industry as an example. I have seen many dealers who still rely on physical records and manual processes to manage their inventory. Potential sellers of a car would still have to drive down and speak to a salesperson face to face to get an price evaluation or fill up a contact form and wait for a return call.

When asked about why they do not wish to explore technology to enhance business operations, the unwillingness to spend extra money or simply seeing it as a waste of time are the most common answers I received.

However, they have not taken into account the potential rewards on offer in digitalising such as improving workflow/processes and being able to offer better customer service which would lead to good reviews, higher customer retention rates and increased revenue.

Combining Tech and People Skills to succeed

So how could traditional used car dealers leverage tech and AI to succeed? Here are some things they could do:

AI Valuation:

AI powered valuation can provide interested sellers of a vehicle with an instant valuation of how much their vehicle is currently worth simply by entering the car model. Tapping on an extensive database of car listings which are perpetually updated to provide highly accurate results, saving vehicle owners time in contacting individual dealers for a price evaluation..

Streamlined Inventory Management:

AI algorithms can analyse market trends, historical data, and customer preferences to optimise inventory management. Car dealers can maintain the ideal stock of vehicles, reducing inventory costs and maximising profitability.

Accurate Pricing Strategies:

AI-powered pricing models which provide immediate valuations of a vehicle which consider factors like vehicle age, condition, mileage, brand reputation, and market demand. This ensures competitive and accurate pricing, attracting potential buyers and optimising profit margins.

Targeted Customer Engagement:

AI-powered analytics can analyse customer data to identify potential buyers and target them with personalised marketing campaigns. This enables dealerships to reach the right audience, increase lead generation, and improve conversion rates.

Enhanced Customer Experiences:

AI-driven chatbots can provide instant assistance, answering queries, guiding customers through the buying process, and even offering personalised recommendations. Implementing Virtual and augmented reality experiences will allow customers to explore vehicles remotely, visualise customisation options, and even virtually test drive cars, enhancing engagement and satisfaction.

Data-Driven Decision Making:

AI algorithms can analyse vast amounts of data in a short period of time, providing valuable insights into customer preferences, market trends, and operational efficiency. Armed with this information, traditional used car companies can make informed decisions and drive business growth.

Fraud Detection and Security:

AI-powered systems can detect patterns and anomalies in transaction data, helping identify potentially fraudulent activities. This ensures the integrity of the inventory, safeguards against stolen vehicles, and enhances customer trust.

Confidence For The Road Ahead

AI will not be able to replace every single function of a business. The soft skills which humans possess are just as important. That is why it is also important to upskill staff with updated knowledge and encourage them to embrace the latest technological trends. Combine that with the potential of AI and you might just have the winning formula.

It is no longer optional to digitally transform in the used car industry. According to consulting firm Ernst & Young’s Mobility Consumer Index 2022 study, vehicle consumers are actively adopting digital channels seeking information, price transparency and enhanced experiences. Without these, organisations face the real risk of falling behind their competitors and their survival is at risk.

The digital age has ushered in an era of immense possibilities. AI presents an unprecedented opportunity for SME’s with traditional business methods and processes  to digitally transform operations, improve customer experiences and drive sustainable growth. By embracing AI technologies, they can adapt to the changing landscape, exceed customer expectations, and secure a prosperous future in the digital era. The time to act is now, as the road to success lies in harnessing the power of AI for a brighter tomorrow.