BREAKING news! Carvana & Vroom is bleeding cash. Is Ecommerce in auto DOA?

[joe.pistell]

...While franchised dealers are slow to move, some still endeavor to take full advantage of online retailing and this will only push the tech, processes and competition to make it happen...and still make money.

Adam, What evidence-based thesis can you put forth to 'connect the dots' that identifies the shoppers desire to conclude his car shopping experience in a shopping cart?

Or, are you referring to an occasional sale here and there (Shopping carts strongest use case is be-back closing tools, or BDC guided closing tools).

In my travels, car shoppers arrive at the dealerships with a list of questions & most are complex they couldn't figure out on the 'net.

 

[craigh]

most

I think this is what it all boils down to.
We've been having this conversation for years.

I want to buy my cars online. No question about it.
Many of my family and friends are in the same boat.
We don't have complex car questions, we know what car we want and we know who has it listed on their website.
The last thing we want to deal with is extending the purchase process even further by going to a dealership.

We may be 5% or even 1%, but it's a market that exists and if 1 dealer out of 20 sells online, he's getting my business if he has the right car.

But I think it's fair to say that the type of consumer willing to purchase online is also the type of consumer that knows exactly what they want, which means having the right car is still even more important than being able to sell your inventory online.

 

[AdamMurray]

Adam, What evidence-based thesis can you put forth to 'connect the dots' that identifies the shoppers desire to conclude his car shopping experience in a shopping cart?

Or, are you referring to an occasional sale here and there (Shopping carts strongest use case is be-back closing tools, or BDC guided closing tools).

In my travels, car shoppers arrive at the dealerships with a list of questions & most are complex they couldn't figure out on the 'net.

Evidence-based thesis? I'm just a big, dumb car guy and have nothing of the sorts other than my own experience and 20+ years watching the Road To The Sale morph into its current state and knowing that it will continue to adjust with tech and data.

For almost 2 years, I ran an internet department for two dealerships located in the middle of nowhere, South Texas. We sold as many trucks out of the state of Texas as we did in it. Using our website, an app that I built to appraise trades, email/SMS and Skype in our F&I office, we contracted numerous customers far from our store and never once saw them in person. Our customers seemed to enjoy the process and we had relatively few issues during my time there. I believe they would have enjoyed it even more if all of these steps were combined into one user-friendly e-com tool. Many of these tools are out there in dev right now and, I believe, will be perfected over time. Unfortunately, there are still many docs in F&I that require a wet signature for state and lender compliance....we handled that via FedEx but I'm sure a solution for that is forthcoming as well.

Is this typical? As evidenced by your travels, probably not. We did it out of pure necessity, embraced it and offered it as a value prop to our customers...and it worked. It's not binary, though. We also had guys standing on the point, grabbing ups, taking test drives and TO'ing until they bought or walked. There will always be customers that want to see it and touch it before they buy it. There is also a good number of folks that will buy online and the industry will rise to the occasion and eventually provide a full-circle solution to satisfy that segment.

 

[joe.pistell]

I want to buy my cars online. No question about it.
Many of my family and friends are in the same boat.
We don't have complex car questions, we know what car we want and we know who has it listed on their website.
The last thing we want to deal with is extending the purchase process even further by going to a dealership.

Craig,
You are an outlier, you're ahead of your time and here's proof. Shop-Click-Drive is the most robust, compliant and accurate cart on the market today and it's ubiquitous. Yet, sales from it are... nearly non-existent for most stores i've come in contact with.

Go into a store. Sit at the reception desk, shadow a rep, listen to calls, read emails & chat... ITS AN EPIDEMIC, SHOPPERS ARE CONFUSED, OUR WEBSITES SUCK!

Web designers need to know that a shopping cart experience is a natural conclusion of a fully informed shopper. IOW, a fully informed shopper* is required to make carts work.



*and promises from the seller

 

[joe.pistell]

I ran an internet department for two dealerships located in the middle of nowhere, South Texas. We sold as many trucks out of the state of Texas as we did in it.

Sorry Adam, it wasn't my intent to speak in a negative tone. I should let a post sit for a time and re-read it to make sure it sounds the way I'd talk to you.


Did you sell scarce, hard to find trucks, or, common units like F150's?

 

[craigh]

Craig,
You are an outlier, you're ahead of your time and here's proof. Shop-Click-Drive is the most robust, compliant and accurate cart on the market today and it's ubiquitous. Yet, sales from it are... nearly non-existent for most stores i've come in contact with.

Honestly, they must have the worst advertising department in the automotive industry.
I don't know of anyone who has ever acknowledged the existence of it, nor have I seen it advertised.
The only place I've ever seen Shop-Click-Drive is on DealerRefresh.

Also, I am not driving any of these:



I don't think it's fair to say that because one of the most boring OEMs did an under-advertised attempt at online sales that a portion of the market isn't looking for it.

 

[joe.pistell]

I don't think it's fair to say that because one of the most boring OEMs did an under-advertised attempt at online sales that a portion of the market isn't looking for it.

Now, I'll take your side of the argument for a moment.

"...A 2016 Capgemini U.S. survey bears this out. Sixty percent said they were willing to buy a new car online, and 60 percent said they want to avoid sales pressure at a dealership. However, 88 percent said they want to see the vehicle or test-drive it, and 55 percent said they want to be able to negotiate the price"
http://www.chicagotribune.com/class...franchise-model-autocover-20170511-story.html
​

#BOOM
There it is. Consumer's Demand and the unfulfilled shopping experience.

This survey sheds a big light on the demand, but a tiny light on the problems -most- shoppers have.

IMO, the solution is a hybrid dealership, like Carvana, but shoppers would be allowed access to the cars prior to purchase. Something like a 'members only' entrance could satisfy all parties (seller and buyer).

 

[AdamMurray]

Sorry Adam, it wasn't my intent to speak in a negative tone. I should let a post sit for a time and re-read it to make sure it sounds the way I'd talk to you.


Did you sell scarce, hard to find trucks, or, common units like F150's?

No apologies needed, Joe! I didn't take your post as negative in any way. Sorry if mine sounded a bit too defensive.

I would not consider anything we were selling scarce. There were more HD trucks than anything (2500's and 3500's) but certainly nothing hard to find. This was mainly due to our heavy involvement in rodeo and most of our marketing efforts were geared towards cowboys, farmers and ranchers. Honestly, though, this is what surprised me the most about our success. One would think this segment would be the most resistant to using technology for such a large purchase...the exact opposite was true, though. They loved it and raved about how easy it was.

Embracing the process is key to the paradigm shift, though. Managers and salespeople with experience at "normal" dealerships struggled with this method of doing business and spent too much time trying to inject "old school" techniques into the process which almost always ground the deal to a screeching halt. They never made it long at the store. Others, though, just accepted it as the way we did business and really kept the customers needs at the forefront. Their deals were usually really quick, easy and came with great surveys.

If the tech can align with the right attitudes, I sincerely believe more dealerships could take advantage of a nearly full digital transaction.

 

[Chris Cachor]

There is likely no more efficient market than Used Car Sales in America. Tens of millions annual retail, auction and peer-to-peer transactions completed by tens of millions of independent buyers and sellers with 100% transparency to pricing; yet technology "disruptors" think they can make money by adding costs (like delivery, pick-up and vending machines) to this equation?

Someone failed to take Economics 101 when they were in school.

Disruptors think they can win by improving the front-end (customer experience) alone. They ignore the back-end mechanics (auto market) or don't fully understand it and to me are way over capitalized.

 

[Chris Cachor]

I think this is what it all boils down to.
We've been having this conversation for years.

I want to buy my cars online. No question about it.
Many of my family and friends are in the same boat.
We don't have complex car questions, we know what car we want and we know who has it listed on their website.
The last thing we want to deal with is extending the purchase process even further by going to a dealership.

We may be 5% or even 1%, but it's a market that exists and if 1 dealer out of 20 sells online, he's getting my business if he has the right car.

But I think it's fair to say that the type of consumer willing to purchase online is also the type of consumer that knows exactly what they want, which means having the right car is still even more important than being able to sell your inventory online.

@craigh is it really that hard to buy a car? You go to the dealership, you say I want this car. Here is my drivers license, insurance card. Most dealer's internet pricing is pretty competitive. I see no reason you can't be in and out of there in 90 minutes.