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CarMax EasyShop - Is this the FUTURE of car buying?

Jeff Kershner

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May 1, 2005
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You didn't miss the announcement of CarMax EasyShop did you?

CarMax has just dramatically changed car buying with their new CarMax EasyShop. The service has been launched first in Raleigh and Fayetteville NC.

ShopEasy allows you complete more of the car shopping process at the convenience from any computer before arriving at the store and IMO, it's looking slick!

Our good friend Brian has been talking about full transactional online car buying for years here on DealerRefresh and just published an article - Seeing Your Dealership As Consumers See It.

As dealers, most of us quickly nudge our shoulders at this while thinking to ourselves - "this will never work", customers want to touch and feel a purchase of this size. Yes, there's a lot of truth in that. The percentage of consumers that are willing to buy a car sight unseen (other than photos) is very low BUT climbing. And it happens on eBay every day. Though I'll agree eBay is a much different marketplace - but is it really?

I'll be the first to admit, I was a shoulder nudger not too long ago (only a couple years ago). I'm no longer.

More and more people are going to demand this way of shopping and buying their next vehicle. The traditional new car sales "professional" as we know it today WILL DIMINISH!. It's going to happen - guaranteed!

Will it take awhile? Yes, I believe it will BUT also I believe every dealership website should consider allowing the customer the option of BUYING online now. Even if most of the transaction still happens at the dealership, a solid online buying process takes the customer down the road of the purchase. It's not only a differentiator but it's (can be) an engaging pre-closing tool.

How powerful is it to get a customer 30% - 40% - 60% down the road of the sale before even stepping into the dealership? This happens many times over the phone and via email every day but it's usually a complete pain in the ass to deal with. What happens when the customer can do it at their own convenience?

A solid shopping cart on your dealership website can increase engagement, time on site, branding, positive customer experience, finance, and an actual purchase -- the list goes on.

BUT WHAT ABOUT THE TRADE-IN? Let's admit, it's the one step in the process that nix the full online buying process. Though, or the time being I think CarMax has done a great job incorporating and explaining this into the EasyShop process. Plus, due to their already superb branding and marketing, everyone already knows the trade-in process at CarMax is effortless.

Even with the trade-in being an issue - it's only a matter time of before we get this ironed out -- think...KBB/AutoTrader TIM :)

So what do you think..Is this it the future of car buying?

Lets lay it all out!!
 
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This model doesn't work for every customer or dealership for that matter, but I'm with you Jeff, I think this is the direction the automotive retail business is moving in. Judging by my dealer's success with eBay and the sheer amount of out of state traffic we receive on our used cars, people are looking far beyond their local dealer selection and need a formal method to complete the transaction without sitting in the showroom. Interestingly enough, I think this is one internet venture consumers AND dealerships will embrace:

Consumers:
- Looking to eliminate the traditional showroom experience.
- Constantly seeking greater selection beyond what is available locally.
- Self-pace through the purchase experience.
- The F&I process is now fully disclosed and put into chewable form, online for the customer.

Dealers:
- Leverage national inventory, which is especially important for large dealer groups. Carmax can now target a customer living close to their Sterling, VA store with a vehicle sitting in Houston.
- Since the selling is taking place online, you replace high cost/low productivity sales people with lower cost/higher productivity photo takers/description writers, a clerk to process paperwork and delivery coordinators.
- Less need for multi-million dollar facilities. Why build a $10m facility when you can build a smaller showroom with a parking garage, invest in your website and merchandising and still generate the same return. CarMax benefits additionally from not having to conform to manufacturer facility requirements. They could essentially build a parking garage in Raleigh behind their dealership, load it up with used cars and sell out of that (think Texas Direct).

As the business moves in this direction, it will be even more important for dealerships to merchandise properly, including photos, pricing and dealership branding. Those who fail to will be left in the dust.
 
I purchased my last car, sight unseen and 8 hours away. I had a cashier's check in hand before I even took the trip. The reason I was so sure about the used car is that it was still under factory warranty and had exactly what I wanted and the owner of the store gave me a fair deal.

I would agree this is not for everyone, but if the car has some type of warranty and you are familiar with how the car operates, then buying online makes the transaction fast and easy. Dealers do need to prepare for this, especially on new cars, late model used or certified vehicles.
 
I don't know if sight-unseen car buying is the future, but I will agree that the current dealership process model needs to be revolutionized. In this day and age it makes a ton of sense to allow the customer to do a lot of the process himself. I like where CarMax's head is headed :thumbup:
 
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Here is something I found at the #1 Honda dealer in Boston Area. Pretty cool way to purchase a car.

At **** Honda, qualified customers can buy and finance their next vehicle online from the comfort and convenience of their home or office, and have it delivered to their doorstep without stepping foot into our dealership. They just need a computer with an internet connection. They can buy with confidence from **** Honda because "Our Success Means We Can Sell For Less!" We are the #1 Honda dealer, in sales, in the U.S.A. (as verified by American Honda 2010, 2009, 2008, 2007 & 2006).


This is how it works:

  1. Select your desired new or pre-owned car, truck, or SUV from our large inventory<LI sizset="10" sizcache="0">Negotiate your best price and trade-in value, plus any Vehicle Protection or other Products and Accessories to Enhance your purchase with our **** Buy-Online (BBO) Specialist via Chat, Phone, or Email
    • Call our BBO Specialist at ########
    • Fill the Request More Information on this page
    • Click the button to chat with one of our *** Buy-Online Specialists
  2. Once you have negotiated your best price, then our BBO specialist will take a deposit to secure your vehicle
  3. Our BBO Specialist will provide you with a secure link to begin the finance application process
  4. Our BBO Specialist will forward a Purchase & Sales agreement to you by fax or email a secure link to you
  5. Sign your Motor Vehicle Purchase Contract and fax back to our BBO Specialist at 781-619-6757
  6. If you qualify for this program, our BBO Specialist will email you a secure link to J. P. Morgan Chase Bank, N.A. so you may complete your finance application on-line (if you don't qualify, let us help you work with one of our other lenders in an off-line program)
  7. Once J. P. Morgan Chase Bank, N.A. approves your application, it will mail you a check made out to both you and Dealership Name
  8. Now just set up your desired delivery date, time, and location with our BBO Specialist
  9. Our BBO Delivery department will arrive with your vehicle at no extra charge, review the vehicle with you, going over its features and benefits, and pick up the endorsed check
Shipping Disclaimer: Complimentary delivery is restricted to New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont).
 
These bundled solutions will certainly appeal to a large portion of the car buying segment - creating the perception of more control to the buyer.

All they did was take the standard items most dealerships already have in place and create a simple to follow process. Very smart.

I'd say this is definitely paving the way for the future of car buying.
 
I'm thinking this is very cool!

While it may be a step towards buying a car sight-unseen, that doesn't appear to be what EasyShop is about. The video mentions coming into the store a number of times. So in that sense it is very different from the Honda dealer in Boston. Another difference is that the Boston dealer forces the customer down a clearly defined step-by-step path while the CarMax process lets the customer do as much or little online as they wish. CarMax is clearly putting control into the customer's hands - this is a hard concept for many dealers.

Conversations I've had with "Online Conversion Gurus" have often focused on moving the customer through just such a clearly defined path. They argue that when a customer reaches the end of the path, you have a sale. Of course the problem is many customers balk at being led down the path. By allowing customers to choose their own path CarMax isn't getting more online sales but they are looking for many more offline opportunities. Everything here seems to be designed to get a customer in the store.

Let's face it, many dealers will have a hard time giving more control to the customer; it goes against everything they learned in "Car Dealer Basics" (copyright 1963). Many dealers would also have a difficult time putting a 3 day hold on a car for a customer that has never even been in the store or laid down a deposit. But CarMax either didn't read "Car Dealer Basics" (copyright 1963) or decided to throw the book out. More dealers should consider following their lead on that and redesign the car business for today.
 
Let's face it, many dealers will have a hard time giving more control to the customer; it goes against everything they learned in "Horse Trader Basics" (written 1879). Many dealers would also have a difficult time putting a 3 day hold on a car for a customer that has never even been in the store or laid down a deposit. But CarMax either didn't read "Car Dealer Basics" (copyrighted in 1969 after we switched the picture from a horse to a car in 1903, and instead of making a new edition {no need by the way} we just copyrighted it) or decided to throw the book out. More dealers should consider following their lead on that and redesign the car business for today.

I changed your paragraph a little.
 
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