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

Discussion in 'Other Cool Technologies & Services' started by joe.pistell, Mar 7, 2018.

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  1. Jeff Kershner

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    Quick promo - @Stauning@Stauning and @reverson@reverson will be joining us tomorrow at 1:00PM EST on Refresh Friday, we'll be discussing this exact topic. Join us on Facebook Live -





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  3. craigh

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    It’s not hard. Neither is going to the pharmacy or Wal-Mart, but I still buy everything on Amazon to avoid going to these places. My last car was reserved over the phone in < 5 minutes sight unseen. If I know the car I want, I just don’t need the whole process.
     
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  4. Chris Cachor

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    Understood. So, is the expectation to stop in, sign paperwork, then pick up the vehicle? Bring your own financing? I suppose you'd like to skip the whole salesperson taking the time to show features of the car (for their CSI score) thing?

    I only ask this because I think an interesting concept would be a FastPass sort of thing. I think doing the transaction online is a pain in the ass, people barely want to type in their email let alone a whole credit application, upload insurance, etc.

    Streamlining this process online, with just an email, phone number, and maybe a SSN could help. You can look up pretty much anything about a person with an email and phone number. Bring the FastPass to a dealer, they scan it, and a deal sheet is put together. They snap the drivers license and insurance card into their system, car is washed already waiting with a bow on it.

    There's some caveats to work through for sure, but I think it could be a win/win for dealers too. Might even help CSI numbers.

    This could also be a compelling product for CRM companies to put together where the FastPass tech is proprietary...

    Are you saying you've already been sold, you don't need to be sold again?
     
  5. Gerry Fraenkel

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    Point well taken! All I would add is another dealer advantage of customer retention program.
     
  6. craigh

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    Yes. Ideally, just doing that online or at a kiosk. Print the bill of sale and finish it.

    https://verified.me :)

    upload_2018-3-9_8-37-12.png

    I qualify as a "car guy", both for myself and my peers.
    Definitely an outlier, but I make my buying decisions before I see the car in person.
     
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  7. john.quinn

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    Interesting conversation from the perspective of "what does e-commerce in the dealership mean?"

    Seems to me, ask 10 different people what is Digital Retailing, and you'll probably get 10 different answers, ranging from the Big Green "Buy It Now" button to the simple credit app online.

    I see the confusion as an industry failure; every vender jumped on the latest buzzword and did disservice to the concept. Probably why most dealers yawn when I ask about Digital Retailing...
     
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  8. ed.brooks

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    Many of the more traditional dealerships have been using delivery and pick-up as a customer-service differentiator for ages (while still having to pay sales commissions of 25 to 30 percent). As far as the Vending Machines, they are merely a marketing tactic. Many dealerships have spent millions on showrooms.

    There may be things wrong with the business model, but delivery, pick-up, and vending machines aren't a problem.
     
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    #27 ed.brooks, Mar 9, 2018
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  9. CARBIZ

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    I can tell you eCommerce/digital retailing is not dead, in my humble opinion. I think a lot of people are blurring the lines here. Carvana and Vroom represent one side of eCommerce for the automotive industry. They are the "start ups" that are looking to be the next "unicorns" that are taking in and burning lots of cash. That doesn't represent the dealer community that have the ability to incorporate online retailing into their business models.

    Why would it be dead? Even if those two giants don't survive that won't change some newer trends in consumer behavior/shopping. We've rebranded our company to additionally sell and deliver cars online and we've seen results.

    Just a couple thoughts on Vroom - take a look at their online reviews across the web, including their social media pages. They are getting skewered by their customers. Most sites have them around a 2.8-3.0 star count. Culturally, they must not truly place an emphasis on the customer service side of the experience. They are destined to fail if that is the case. An "online company" that isn't overly concerned with their online reputation?? Ha! Someone is asleep at the wheel there :)

    Carvana - I don't think we can count them out yet. They may be burning tons of cash and have increased their losses, but they've also grown revenues relative to the losses. They place a high emphasis on customer service/experience.
     
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  10. Cullen C

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    Obviously noteworthy and interesting perspectives by all. My two cents, this is a marathon not a sprint. Declaring ultimate death or success one quarter at a time is probably foolish.

    As soon as Vroom acquired Texas Direct there had to be right sizing of personnel based on redundancies. I have no idea of their long term viability but the layoffs alone do not signal anything other than them attempting to make moves that improve profitability. Amazon laid off hundred last month, I assume they are still going to fulfill my paper towel orders.

    After CVNA stock "tanked" it rallied and ultimately is back at $18.03 per share($5 higher than the immediate price after the 3rd Qtr results). Sure the revenue miss is disappointing and the market reacted to that. But hidden in the details are some encouraging numbers as well. They have also made some operational changes recently that will have positive impacts on future profitability.
     
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  11. craigh

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    Your optimism reminds me of the Tesla fan club forums.

    "I know there are 1inch panel gaps, but the hood closes straight now"
    "I know they're 6 months behind schedule, but did you notice that their one factory made enough parts on time?"
     
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