Online Shopping to Online Buying

[joe.pistell]

When an established vendor guarantees sales, can we please go through this level of mathematical scrutiny?

Bill,

You are one of the few ppl in our industry that make me stop what I am doing, close the doors and read what you're saying. I'd like the opportunity to speak to your thoughts.

1st, On DealerRefresh, I do everything in my power to speak from my dealer roots, not from my vendor position. I take great effort in making sure that I never tout a product. My posts here will always reveal this rule I've made for myself. If I break this promise, plz slap me.

Ok, with that horse shit out of the way, why all the 'mathematical scrutiny'? For me, it's all about "yield".

"Yield management is a variable strategy, based on understanding, anticipating and influencing consumer behavior in order to maximize revenue or profits from a fixed, perishable resource (such as airline seats or hotel room reservations or retail inventory, etc)."​

Yuk!! Geek talk!!! Don't give up on me yet! Plz allow me to explain...

Selling cars is a team sport. Sales are the product of the DP's investment and the management team's efforts. Sales at the end of the month is a simple score of the entire team's productivity*.

How does this 'mathematical scrutiny' of a Digital Retailing (DR) product connect to selling more cars? Looking at relevant stats can give us a high-level look under the hood.

Question #1). Has Michia built something different?

Michia's post was data driven. I saw gaps. Michia filled them . Like Ed mentioned, Michia is not introducing DR to the industry, he's #4 or #5 or so, and, like Ed mentioned, I see sales numbers that are common with DR.​

Question #2). Does Michia's product help a sales rep have a productive discussion?*

We haven't touched this question yet. Michia hasn't shared a link... yet IMO, building a DR solution that answers this question is 100x harder than it appears. From my POV, DR's highest ROI is to assist the rep and shopper (as needed). DR can be a great be-back tool and BDC's should be experimenting with ways to get phone ups to commit (especially with used or scare units).​

My DR Summary:
Shopping carts are as old as the internet. If shoppers wanted an automotive shopping cart solution, we'd had them a loooong time ago. Look how eBaymotors empowered the shopper, yet failed. Why? Because shoppers find the internet experience as a giant cluster f**k. Shoppers discover quickly that the internet can't help them buy a car, shopper's use the 'net to prepare them for the dealer visit. IOW, the dealer experience is superior to the internet experience (sooo many ppl miss this simple fact of life).

Lastly, Car shopping is web-rooming. IOW, shoppers WANT to buy bricks and mortar (because its better than internet only sales).

"Brick and Mortar Stores are the New Black in ecommerce"



HTH,
Joe



*My TL;DR background:
For me, I was a marketing director for successful 3 store group that sold 6,000 cars a year. I had a $2mill annual budget (~$350 PVR) and a team of 12 to make it happen. The owner was a genius, 2/3rd's of my pay was on deliveries. This pay plan made me see and think on his level. I learned quick... "does it sell cars?" AND I learned that marketing's job was to help a sales rep have a productive discussion, all else is a waste of precious cash.

I oversaw the whole machine, from TV ads, direct mail to 'all things internet'. Then, I'd watch all this marketing work bear fruit... ups would show up. Because I got paid on sales, not ups, marketing was 1/2 of my job. I built & optimized all kinds of sales processes to work the opportunities to get paid.

 

[craigh]

We have a demo video here, just click the giant play button.

This crossed my desk last June when you put out the Q&A from StartX looking for dealerships to work with.
Glad to see you kept with it - I'll be taking another dive into this shortly.

 

[Cullen C]

So this very similar to GM's Shop, Click, Drive, or Cox's MakeMyDeal, or Dealer Success' VirtualDeal - What differentiates your product @Michia Rohrssen?

I have wanted to respond for a few days but online used car sales are going so well right now I simply haven't had the time.....

I totally get the want for clear attribution to increased conversion and sales. I guess I am just having a hard time understanding why this is so hard to understand. I looked at the short video provided by @Michia Rohrssen, while there are most likely holes in both the data and the presented seamless process, the viability is very real.

Over the last two years I have come to understand that the ability to buy a car(a used car btw, a harder sight unseen sell in my opinion) online appeals to everyone. While I agree most do not set out on their shopping experience looking for an ecommerce model I know when they find one large quantities transact.

I love the volume of responses and debate. I wish I could have gone back and referenced all of the smart commentary that I have read over the last week or so. Look forward to following along as it continues.

 

[craigh]

Question #2). Does Michia's product help a sales rep have a productive discussion?*

We haven't touched this question yet. Michia hasn't shared a link... yet IMO, building a DR solution that answers this question is 100x harder than it appears. From my POV, DR's highest ROI is to assist the rep and shopper (as needed). DR can be a great be-back tool and BDC's should be experimenting with ways to get phone ups to commit (especially with used or scare units).​

Sometimes I think I understand your perspective, but this seems off base. You're asking the question "Does an online selling tool help a traditional sales rep have a productive discussion?". I don't think that's the right question at all. I think the question we should be asking is "Does an online selling tool satisfy the needs of consumers who are avoiding traditional sales reps?" When I'm looking at the online sales process, it cuts out sales reps (in fact, at our model store sales reps don't exist anymore). The whole process is online and in kiosk - fill me in as to how this is a Sales Rep discussion. Embracing the new model may require releasing your grip on the traditional model.

My DR Summary:
Shopping carts are as old as the internet. If shoppers wanted an automotive shopping cart solution, we'd had them a loooong time ago. Look how eBaymotors empowered the shopper, yet failed. Why? Because shoppers find the internet experience as a giant cluster f**k. Shoppers discover quickly that the internet can't help them buy a car, shopper's use the 'net to prepare them for the dealer visit. IOW, the dealer experience is superior to the internet experience (sooo many ppl miss this simple fact of life).

This is alot of statements with no supporting facts.
I don't know that I agree with anything except the first statement.
"Because shoppers find the internet experience as a giant cluster f**k."
Huh?

Lastly, Car shopping is web-rooming. IOW, shoppers WANT to buy bricks and mortar (because its better than internet only sales).

"Brick and Mortar Stores are the New Black in ecommerce"

I don't know where you get these generalizations from - maybe it's from your dealership experience back in the day - but assuming that shoppers WANT to buy at a dealership because it's better than internet only sales is not a statement I see no proof of. Until the whole market has access to buy online, you cannot prove that consumers do not want it.

*My TL;DR background:
For me, I was a marketing director for successful 3 store group that sold 6,000 cars a year. I had a $2mill annual budget (~$350 PVR) and a team of 12 to make it happen. The owner was a genius, 2/3rd's of my pay was on deliveries. This pay plan made me see and think on his level. I learned quick... "does it sell cars?" AND I learned that marketing's job was to help a sales rep have a productive discussion, all else is a waste of precious cash.

I oversaw the whole machine, from TV ads, direct mail to 'all things internet'. Then, I'd watch all this marketing work bear fruit... ups would show up. Because I got paid on sales, not ups, marketing was 1/2 of my job. I built & optimized all kinds of sales processes to work the opportunities to get paid.

Times have changed a bit, but not all that much.
I have a feeling that you think that selling cars online is a marketing tool?

 

[craigh]

I have wanted to respond for a few days but online used car sales are going so well right now I simply haven't had the time.....

</thread>

 

[Brad Randolph-Adams]

It' is so interesting watching this conversation unfold. I sit on conference calls at my job discussing the same thing. I do think that eventually someone will get it right. It is however VERY hard to get the process both streamlined and effective.

We have been working on an app where customers can set up sale of their trade. What we see is that the higher the amount of automation the lower the customer satisfaction KPI's. When we have dealers more involved in the process of talking to the customers generally the KPI's go up but the overall amount of vehicles sold goes down.

The biggest part of the buying process that just isn't covered with online car buying is the consultative aspect sales people bring to the table. How many customers walk into a dealership and end up buying a completely different vehicle because the one they were looking didn't meet the needs they have? But how is that integrated? Chat? Consultation call? More importantly how can the process be changed to be both customer friendly and efficient?

As far as present viability of of a completely automated car buying process I'm not convinced. Keep your marketing dollars in your pocket. But keep a weather eye on the horizon.

 

[craigh]

The biggest part of the buying process that just isn't covered with online car buying is the consultative aspect sales people bring to the table. How many customers walk into a dealership and end up buying a completely different vehicle because the one they were looking didn't meet the needs they have? But how is that integrated? Chat? Consultation call? More importantly how can the process be changed to be both customer friendly and efficient?

I find this interesting.
In one thread we talk about how many sources the customer sees online and how much further they are down the pipeline by the time they arrive. We talk about brand loyalty and model loyalty and the data is showing that customers know what they want before they get to the dealership more than ever.
Then over here in this thread I see people saying "no no, we need sales people.".

IMHO, the trend is clearly moving away from sales people and towards eCommerce, automation and commission-less sales.

 

[joe.pistell]

I find this interesting.
In one thread we talk about how many sources the customer sees online and how much further they are down the pipeline by the time they arrive. We talk about brand loyalty and model loyalty and the data is showing that customers know what they want before they get to the dealership more than ever.
Then over here in this thread I see people saying "no no, we need sales people.".

IMHO, the trend is clearly moving away from sales people and towards eCommerce, automation and commission-less sales.

Craig,

Above, you see 2 conflicting opinions, this leads you to a conclusion (a conclusion that reinforces your beliefs).

Consider the awesome insights offered by Josh Cole:

Car sales will never be 100% online, or 100% offline. It will be a mix that will be determined by the shopper.

There is it. It's not black. It's not white, it's 100% gray. Your a great technologist without significant dealership experiences. Like all great tech minds, your solutions depend on a SME (Subject Matter Expert) to interact with. DR is filled with great SME's!

Josh continues:

What I want as a dealer from a tech company in the auto sector, is software that is able to facilitate all 3 of these, in a seamless experience for both OUR team AND OUR customers. So when my customers want to buy 100% online, they can (truly from start to finish). And when they want to reserve a car and pick it up in-store, they can (and our team can pick up where they left off.) And when they want to just see that it's available, and they come in to see the car, our team can start from the beginning with them. But the whole time, using the same process that the customer would have used online. That is a seamless experience and process for our team and for our customers.

This is why I come to the DR forums. I know my beliefs drive my opinions and my opinions often fail me. I come here to air out my opinions in the hope that someone blows a hole in them and cause me to find a new opportunity that I've not seen.



HTH
Joe

 

[craigh]

Joe,

I agree entirely that we will always have some of each, but I don't think every dealership will have all 3 anytime soon.
Some dealers are going all in on online, some are going hybrid and some are going full traditional.
I'm working with a store that already went commission free, got rid of sales people, sells at invoice price and is ready to do full transactions online.

I wouldn't suggest we're going full online anytime soon, but I certainly don't think that's for the reasons being stated in this thread.
I think consumers are ready for this (at least a subset are) and I believe that this subset is growing steadily.
eCommerce trends are up across the board and consumers are spending more and more online - it's a natural progression.

Car dealers may just have to stop selling cars they way they're used to doing it.
For a one price store this is much easier.
- here's the car
- here's the price
- here are the financing options
- here's the after sale products
- here's the bill of sale

That whole process can be done online without sales department involvement (legality pending) and that seems to be the way forward.
In the meantime, I think Live Chat and BDCs have a huge opportunity to improve this process and help customers along.

Soon enough buying your next car will be as easy as booking a service appointment online

 

[ed.brooks]

...There is it. It's not black. It's not white, it's 100% gray. Your a great technologist without significant dealership experiences. Like all great tech minds, your solutions depend on a SME (Subject Matter Expert) to interact with. DR is filled with great SME's!...
Joe

Joe,

I agree entirely that we will always have some of each, but I don't think every dealership will have all 3 anytime soon.
Some dealers are going all in on online, some are going hybrid and some are going full traditional.
I'm working with a store that already went commission free, got rid of sales people, sells at invoice price and is ready to do full transactions online.

I wouldn't suggest we're going full online anytime soon, but I certainly don't think that's for the reasons being stated in this thread.
I think consumers are ready for this (at least a subset are) and I believe that this subset is growing steadily.
eCommerce trends are up across the board and consumers are spending more and more online - it's a natural progression.

Car dealers may just have to stop selling cars they way they're used to doing it.
For a one price store this is much easier.
- here's the car
- here's the price
- here are the financing options
- here's the after sale products
- here's the bill of sale

That whole process can be done online without sales department involvement (legality pending) and that seems to be the way forward.
In the meantime, I think Live Chat and BDCs have a huge opportunity to improve this process and help customers along.

Soon enough buying your next car will be as easy as booking a service appointment online

My main take-away is distilled by these five words, "at least a subset are". Most dealerships can't exist catering to a narrow subset of the buying population - most, not all. Carvana has carved out a significant niche catering to the consumer that HATES the current dealership sales process, but most (again, most) dealerships aren't ready to jump in with both feet.

You bring up a very important point @craigh, moving to a 100% eCommerce model (or even a slightly more transactional model) requires either a one-price or reduced-negotiation pricing structure. Many dealers struggle with making this change - change is hard!

Lastly, many from the eCommerce community fail to understand that car sales differs, dramatically, from lower involvement, less ego-driven purchases. Buying a car is different than buying a bottle of shampoo from Amazon.