Beepi and Vroom and Carvana - will they make a DENT?

[Clay Toporski]

They really changed the perception of 'One Price" pretty dramatically

And one price is something that, from experience, not everyone wants. I'll post it again below, but 87% of the population doesn't want a one-price experience and 61% of the population specifically wants to haggle. The market was already, by virtue of the internet, coming to a "market price" equilibrium without CarMax. CarMax didn't change the way cars are purchased (speaking of talking about selling and buying cars), they simply tried to make it easier to sell to a segment and have a lot of stores. I think that's great. But, to say they changed an industry in a direction is was already heading (or was quite possible already there) is a bit naive I think.

 

[craigh]

Beepi and Vroom are two of those players…

Maybe I'm the only one that clicked the Vroom link, but that's some software for baby tracking or something?

I think we're talking about this Vroom: https://www.vroom.com/

 

[Clay Toporski]

Actually it is 75% - sorry
69% of car buyers, regardless of generation, start off knowing very little about the vehicle they want to purchase. But by the time they reach the dealership, car buyers are significantly less likely to switch the make/model they have decided on: 75% end up purchasing the same make/model they had in mind when they first visited the dealership
http://agameautotrader.com/insights/view/2015-automotive-buyer-influence-study-1

Thanks for the link. That is eye opening as it goes against the conventional wisdom and studies I'm sure we have both grown up with. I'm surprised that more hasn't been made of this study as the old 70-80+% (depending on the study) of people purchase something different than what they initially looked at has been a mainstay for many decisions and vendors out there.

 

[Cullen C]

If we can't even agree that CarMax has had a significant impact there isn't any sense in continuing the dialogue.

650,000 units sold a year. Over 10 Billion in revenue annually. And they happen to be the third largest auction company in the US after Manheim and Adesa.

Carry on guys. I'm done here.

 

[joe.pistell]

I suppose the easy retort to all of this goes back to a video & question from @JoePistell:

"If car shopping websites are so great, where are the shopping carts?"

Ask me how well GM's Shop. Click. Drive. is doing or how well Dealer.com's Retail Suite is doing and I think the answer is: it's a great tool for helping customers gather information online - but it's not a good way to sell cars. It is simply very very difficult to sell a car through a website, and this is not where the industry disruption is going to come from. Disruption is definitely coming, just not from e-retail.

Clay,

Although you're right, beware your conclusion, your only right in 2015. In the video below, I made it to educate our hundreds of engineers, it speaks to the journey ahead.



The video looks simple, but it's not, it's the result of years of work. It's all there. Disruption is coming... It'll be an evolution, not a revolution (i.e. sloowww motion).

Earthling = Dealer.com employee
DMKT is my division.

 

[joe.pistell]

Has it been a significant disruption in the industry? I think we both know the answer to that: no.

“Disruptive Innovation eliminates constraints that prohibit consumption”.
Clayton Christenson
-HBR 2014

Great question Clay. Anyone think of some disruption in our space?

#1 DealerTrack.
DealerTrack has the be #1. They automated the entire finance process (turning it from days to minutes)

#2) vAuto
vAuto completely turned the used car biz upside down.


Can anyone think of other companies that built products that eliminated constraints that improved consumption?

 

[Clay Toporski]

Clay,

Although you're right, beware your conclusion, your only right in 2015. In the video below, I made it to educate our hundreds of engineers, it speaks to the journey ahead.



The video looks simple, but it's not, it's the result of years of work. It's all there. Disruption is coming... It'll be an evolution, not a revolution (i.e. sloowww motion).

Earthling = Dealer.com employee
DMKT is my division.

I think I should clarify my stance as it seems to be getting misunderstood by some of the other posters.

Premise 1: Any website that can successfully turn a large market portion of online shoppers into buyers without stepping foot in a dealership will be a major disruption to the industry.

Premise 2: Disruption is different from simply being impactful. I, like many other dealers, have not had to change the way we sell used cars as a result of CarMax. Companies like vAuto, KBB and AutoTrader provided transparency to the dealers and marketplace are what caused the used car market to become more efficient with pricing, not CarMax.

Premise 3: The model of "car dealers are bad" and "here's an easy way to buy a car without them" is fundamentally flawed as it does not address the real buying behavioir of customers. "Dealers are bad" is an outdated and incorrect fear that bad marketers continue to use to try and scare customers into their platforms which suffer the same problems brick and mortar stores face.

Until a platform comes along that can provide the kind of beneficial experience one gets from a dealership (of which many exist) while also taking away the roadblocks that dealers put up (before the dealers figure this out on their own, which is already happening) than the simple mindset of this premise will not result in industry disruption.

Therefore, I see nothing in these solutions that does anything better than the dealership setting and provides quite a bit less.

I hope that clarifies things a bit.

 

[joe.pistell]

...Until a platform comes along that can provide the kind of beneficial experience one gets from a dealership (of which many exist) while also taking away the roadblocks that dealers put up.

Therefore, I see nothing in these solutions that does anything better than the dealership setting and provides quite a bit less.

My video mirrors your observations and conclusion. It's nice to hear a confirmation. thnx.

 

[Chris Cachor]

"Dealers are bad" is an outdated and incorrect fear that bad marketers continue to use to try and scare customers into their platforms which suffer the same problems brick and mortar stores face.

This is simply not true. Over the past 4 months, I've had two coworkers and two friends purchase vehicles (used and new). I'm very interested in their experiences so I asked them about it. Only one single person had a smooth and HONEST transaction. The other three dealt with nothing but lies. They absolutely despised the experience. I understand sales tactics but not straight up lying to your customer. Sure it's a small sample size, but the ol' switcharoo on the interest rate is a complaint I hear far too often.

I think Beepi is a great sales experiment. They're putting a nice chunk of change into it but I think they'll need to be well into the hundred million dollar figures to educate the public, build trust in the service, and offer a wider selection of vehicles.

 

[Clay Toporski]

This is simply not true. Over the past 4 months, I've had two coworkers and two friends purchase vehicles (used and new). I'm very interested in their experiences so I asked them about it. Only one single person had a smooth and HONEST transaction. The other three dealt with nothing but lies. They absolutely despised the experience. I understand sales tactics but not straight up lying to your customer. Sure it's a small sample size, but the ol' switcharoo on the interest rate is a complaint I hear far too often.

I think Beepi is a great sales experiment. They're putting a nice chunk of change into it but I think they'll need to be well into the hundred million dollar figures to educate the public, build trust in the service, and offer a wider selection of vehicles.

There is a reason anecdotal evidence doesn't pass scientific muster. Don't succumb to making broad generalizations based on the evidence of a few personal experiences because that's bad science.