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Mar 21, 2012
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Ryan
Whether dealers like it or not, third party sites like AutoTrader/Cars.com/CarGurus/Carfax are often the first online destination for car shoppers.

As digital retailing becomes more prevalent and consumers begin to demand/expect it, how will this affect third party listing sites?

Here are five of the possibilities I envision:

1. Will they transition to a Kayak.com model where they link out to the airline's website to book (or in this case, to a dealership's website VDP to buy)? Third party sites have historically tried to keep consumers on their site, but this business model could become possible with digital retailing by charging a commission of each completed sale (similar to Kayak) vs the standard monthly listing subscription.​
2. Will they create or select a single digital retailing tool that every dealership has to use? I could see Cars.com requiring Online Shopper, Autotrader requiring Accelerate (already happened), etc.​
2. Will they allow each dealer to install their own approved digital retailing tool? I feel this is unlikely to happen and would provide a fragmented user experience.​
4. Will they stay asleep at the wheel and be late to the game, so consumers no longer view them as the defacto first online destination? A single link buried on a VDP to the dealership's website isn't the answer.​
5. Will Carvana become a pseudo third party listing site by offering outside dealership inventory to consumers (which we know they've already been testing)?​

What do you think?
 
Consumers have two questions: "How much is this car going to cost me?" and "How soon can I get it?" that most people still want answered by another human. It will take a lot more conditioning, technology improvements, process overhauls, and 5 billion other unforeseen obstacles to transition car buyers to go deeply down the purchase tunnel on third party sites.

Hell! How many dealers can say a large enough chunk of their customers are getting down their own digital retailing tunnels? ....oh yeah, CarNow, DDC, and Gubagoo all claimed it was in the single-digit territory. They all admitted it during the last Pasch event.

Car purchases are complicated nasty beasts in negotiations, paperwork, insurance, lending, titling, registering, etc. They are further complicated by emotions, and any car guy can tell you the best deals are the happy ones. Can a website make you happy? CarGurus is pretty good at making dealers happy :rofl:
 
Thought provoking post Ryan. The next few years will certainly we fun to watch. Having spent 20 years on the vendor side and now as a marketing director, it's two different views. I hope third party vendors start listening, change is coming.
 
#6

6) Will a Russian-based dark horse come out of left field to offer a Classified Listing site for FREE as long as they have access to your DMS? This new site has the URL of "sexycars4less.com" and their ad strategy is based on shoppers' inability to not click on links that start with "You'll never believe this...".

Actually, I think #1 is a strong possibility @Ryan Everson although I am curious as to what happens if more dealers start figuring out dynamic inventory ads and start dropping classifieds once they start ranking.
 
#6

6) Will a Russian-based dark horse come out of left field to offer a Classified Listing site for FREE as long as they have access to your DMS? This new site has the URL of "sexycars4less.com" and their ad strategy is based on shoppers' inability to not click on links that start with "You'll never believe this...".

Actually, I think #1 is a strong possibility @Ryan Everson although I am curious as to what happens if more dealers start figuring out dynamic inventory ads and start dropping classifieds once they start ranking.
@Dan Sayer When you're referring to dynamic inventory ads ranking are you referring to dynamic landing pages ranking for the dealer's domain?

@Ryan Everson #1 is going to be in the cards for sure, but bridging the gap like @Alex Snyder is referring to where the human is connected as well will be the true challenge. Going 100% purely digital will be great for the 20% of people that are comfortable with that, it's the 80% I'm curious to see how they respond to a hybrid solution that connects the human digitally to the digital transaction while enabling the physical test-drive world!
 
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When you're referring to dynamic inventory ads ranking are you referring to dynamic landing pages ranking for the dealer's domain?
"ranking" may have been the incorrect term. Instead of running "Used Cars" campaigns and then relying on Classified catching vehicle specific search, running Year Make Model Trim ads per unit with each car having it's own budget based on the units you have in-stock. Automated.
 
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Hmm, this is an interesting conversation of course. Even though digital retailing has come a long way, I am sure there is a long way to go before we have to worry about the "80%" that are not going to trust their way down the DR funnel to the end without stopping into the dealership.

That being said, the 3rd party vendors HAVE a plan for sure. There is no way they are not coming up with some sort of tactic to squeeze another $100 per rooftop from you. It will only be a matter of time before the 1st jumps in with both feet and the rope pulls in a few others.

We put together 50-60 DR deals per month right now and that is a bit higher than we anticipated, so for now, it's a fun thing to observe.
 
Whether dealers like it or not, third party sites like AutoTrader/Cars.com/CarGurus/Carfax are often the first online destination for car shoppers.

As digital retailing becomes more prevalent and consumers begin to demand/expect it, how will this affect third party listing sites?

Here are five of the possibilities I envision:

1. Will they transition to a Kayak.com model where they link out to the airline's website to book (or in this case, to a dealership's website VDP to buy)? Third party sites have historically tried to keep consumers on their site, but this business model could become possible with digital retailing by charging a commission of each completed sale (similar to Kayak) vs the standard monthly listing subscription.​
2. Will they create or select a single digital retailing tool that every dealership has to use? I could see Cars.com requiring Online Shopper, Autotrader requiring Accelerate (already happened), etc.​
2. Will they allow each dealer to install their own approved digital retailing tool? I feel this is unlikely to happen and would provide a fragmented user experience.​
4. Will they stay asleep at the wheel and be late to the game, so consumers no longer view them as the defacto first online destination? A single link buried on a VDP to the dealership's website isn't the answer.​
5. Will Carvana become a pseudo third party listing site by offering outside dealership inventory to consumers (which we know they've already been testing)?​

What do you think?
Ryan,

Great topic!

While we are a regional 3rd party site, Carsoup.com has been offering the "Kayak" experience for years and it has worked out exceptionally well. Driving consumers from our search results page to a dealer website VDP has proven very successful for our dealers.

The biggest advantage I have seen from the dealer side (besides a large amount of highly engaged shoppers) is that dealers start looking critically at their website analytics and start to realize how much they don't track.

This model also addresses point #3 because the dealer can use and DR tool they want.

I hope to see more third party sites follow suit as it would allow the dealer to focus more heavily on their own website experience and analytics.

Craig