Online Shopping to Online Buying

[Chris Cachor]

If a dealership had the ability to process deals faster on the front end, then they have more time to spend (i.e., making money) on the back end

Exactly. Imagine if (some) customers landed on your showroom floor with a blank check and everything already in the system. Think about what more you could do.

I'd just like to know why more dealerships don't create an easier path (where laws allow) for people who aren't interested in the traditional way. I'd like to know why we continue to try to modify existing showroom processes, with existing showroom personnel, and expect different results.

I often wonder the same thing. To elaborate on what you said, I think it's great, but I would alter it to read "I'd just like to know why more dealerships don't create easier paths to the sale".

 

[BHavican]

I'd love for customers to show up all set to buy with everything already done. I'm in. Sign me up.

In my duties I answer leads where needed and will create as easy a path as the customer allows me to. What I believe makes me unique and valuable as a BDM/ISM is that I've been a successful sales manager and as such can run/evaluate credit, secure loans, negotiate price, create payment/lease quotes, do blind appraisals, etc and I'm willing to do it all on the phone or via email if it helps earn someone's business. I'm all in on easy paths but more often than not the customer wants to experience the car before committing.

However, easy paths aren't why I'm so cynical when it comes to online buying. I just want to understand three things:

How do I do it?
I've yet to see a viable system that will create a true online buying experience, most are glorified lead generators.

Will consumers want it?
I've yet to see any data supporting that a majority of consumers will buy cars at the click of the button.

How does our dealership profit?

 

[joe.pistell]

Some thoughts to Bill's thoughts...

We only have a finite amount of time every day to be productive.

Most shoppers are time challenged too. #WinWin​

These 3 observations tie together nicely

Think of the TSA Pre line vs. the regular TSA line at the airport, or customers who order their Starbucks through the app vs. the people asking "what's a Grande."

I'd just like to know why more dealerships don't create an easier path (where laws allow) for people who aren't interested in the traditional way.

I'd like to know why we continue to try to modify existing showroom processes, with existing showroom personnel, and expect different results. What is everyone afraid of?

Looking at this from a high level, EVERYONE wants a simpler, faster transaction solution. What makes this interesting is -when a solution is built- it opens a NEW path to a sale. This new path impacts ppl differently.

NEW path to a sale: Shopper

All shoppers want a simpler, faster transaction. Some will see this as a totally new path, some will see this as an improvement to the existing dealer experience.​

NEW path to a sale: Dealer

It's all about who gets paid. DP & GM will get paid, everyone else under the variable umbrella is concerned.​

NEW path to a sale: Vendors

The complexity of this concept has never been seen in our space.
The visibility of errors that this product will produce has never been seen in our space.
Mind-numbing compliance will test you & your org (e.g. franchises, taxes, laws (federal, state, local), etc)
Look for trusted consultants (like DealerKnows.com) to assist dealer decision makers on the quality of your products output.
Look for consultants to score your product & produce white papers educating dealers (for lead gen .

Vendor Reality Check: Consider SCD's direct assistance of OEM. They checked off all the boxes and over came all the above, yet, the product's output told us that shopper demand for this concept is hadn't met expectations. IOW, the consumer's needs are far more complex than a sterile 'ecommerce like solution'.

Uncle Joe Rule #18
"Just because it's a good idea doesn't mean it'll work"​

 

[RMSFL]

I have a great deal of respect for Carvana, and really appreciate @Cullen C being a part of this group. I absolutely love the website and the photos (from a technical side) are amazing.

Through interacting with Cullen on a couple threads, I am aware of some of the things that are unique about their business model. One of the most obvious things is that their stores are in heavily populated areas, and the other thing is that money was no object when their business model was launched. While I believe that I have learned a lot from Cullen (because he directly told me things that I could apply), I have also learned some things that I can't do. One thing that I can't do is build a $10 million + facility/vending machine/website/photo booth. I personally believe that the very reason this business model works for Carvana comes down to commitment. I don't know if any of you have REALLY thought about exactly how Carvana can sell vehicles the way that they do. I have thought about it a lot. Like I lay awake at night thinking about it. The reason is really pretty simple. Because it is the only way that they sell vehicles. You don't have to go to the store and look at the car...because you CAN'T. You don't have to sit down with a salesperson and negotiate pricing...because you CAN'T. You don't get to test drive it...because you CAN'T. You can "test own it", but you don't have the option of just taking it for a drive. If memory serves me correctly, Cullen recently told us that they are selling roughly 1.5% of the used vehicles in their markets. 1.5% is one hell of a number in population base cities like they are in! In my market, that 1.5% gets me somewhere between 3 and 5 units. That won't work as my only revenue stream, but if I can get 3 to 5 ADDITIONAL units with my existing expense structure and average gross, that is $75,000 to $100,000 to my bottom line.

As I sit in the background following this thread (because a great deal of this is above my head), I see a whole lot of people talking about all the failed attempts at doing what Cullen and his crew have succeeded at. This thread keeps working its way around to Carvana because these people have accomplished what nobody else has been able to. I am going somewhere with this, so please hang with me.

Why are we not focusing on eBay and the Texas Direct business model? This is something that we can ALL do and we can do it without having to spend the GNP of a small country in the process. Texas Direct doesn't have an unbelievably extravagant photo process, eBay is pay to play, customers pay the freight on their purchase, and the list goes on and on. This is the business model that is obtainable for every one of us, and it is obtainable right now! Why aren't we debating the practicality of Texas Direct and talking about what we need to do in order to be a part of what they have accomplished? Why have we all just written eBay Motors off as a failure?

Does anyone in this group have any success stories about eBay? Can anyone help me understand what I need to do in order to get a piece of this? I want those 3-5 units per month, but the Carvana business model won't work for me. My pockets aren't deep enough, and if they were I wouldn't dig that deep anyway. I would be all over the eBay deal but as many others here...I have failed with eBay so far.

Great post. I agree with and relate to everything you've said here,

 

[JamieS]

Why are we not focusing on eBay and the Texas Direct business model? This is something that we can ALL do and we can do it without having to spend the GNP of a small country in the process. Texas Direct doesn't have an unbelievably extravagant photo process, eBay is pay to play, customers pay the freight on their purchase, and the list goes on and on. This is the business model that is obtainable for every one of us, and it is obtainable right now! Why aren't we debating the practicality of Texas Direct and talking about what we need to do in order to be a part of what they have accomplished? Why have we all just written eBay Motors off as a failure?

Does anyone in this group have any success stories about eBay? Can anyone help me understand what I need to do in order to get a piece of this? I want those 3-5 units per month, but the Carvana business model won't work for me. My pockets aren't deep enough, and if they were I wouldn't dig that deep anyway. I would be all over the eBay deal but as many others here...I have failed with eBay so far.

I think it's kind of funny that what was once TDA is now Vroom. Vroom is what TDA probably would have become anyways. The pictures are far better and they moved the buying process to their own site instead of relying on eBay. Plus they STILL have the in-dealership option. Even TDA, ONLY on ebay for so long, eventually started listing on other sites like ATC as well. eBay is no dreamcatcher itself and quite time consuming. If anything TDA relied on ebay to present itself nicely, does anyone else remember that TDA site, WOW. Every time I visited it I could hear the faint sounds of a 14.4k modem...

IMO, Carvana dies without

1. A 7 day unconditional refund promise.

You'd think the photo booth was epic part of their sales. Nope, Scratch and Dent visibility universally blew shoppers away. For the first part of the visit, most shoppers think they're looking at a stock photo and I watched shoppers get lost in the photo navigation (it's a totally new UI so there is a learning curve).

Fixed the list for you! Take that away and they become ABC Used Car Sales with crazy fancy photo booth. The sales are definitely far less without that refund. Also I think we're in agreement with the 360 booth. While very trick, it was a waste IMO. Seven figures invested to solve a problem that didn't exist. It's definitely cool, but a million bucks cool? I don't know. The camera and camera user are the biggest pieces and you can get more camera than you'll ever use for less than $2k. I think even beepi proves that to a point. The pictures for the most look very clean, and if you look into the reflections close enough (who is crazy enough to do that I have no idea ) you'll see they're not using a Canon 7D or anything.

What is everyone afraid of?

It's so scary!

 

[ed.brooks]

NEW path to a sale: Shopper

All shoppers want a simpler, faster transaction. Some will see this as a totally new path, some will see this as an improvement to the existing dealer experience.​

In the past @JoePistell , you've said that all shoppers want to negotiate - now you're saying all shoppers want fast and easy. Perhaps it's time to start using 'many' or 'most' or even 'some'. They are all individuals with vastly different priorities. The Carvana experience appeals to many, but probably not most, and I suspect that's just fine with Carvana.

 

[Tallcool1]

I don't think @JoePistell is abandoning his stance that customers want to negotiate. I am actually right with him on this part.

Everyone DOES want a faster and simpler transaction. However, what the customer wants and what they are willing to pay for are two entirely different things.

I am part of a couple Facebook groups that are not retail auto related. This dipshit goes on a rant about how horrible his car buying experience was, how it took 5 hours to get a car bought from start to finish, how he manhandled the dealership employees because it was the last day of the month, knew what his trade was worth, interest rate, blah blah blah. Of course myself and 50 other people (many not in the car business) told him that he should have just bought it over the internet. Anyone care to guess why he didn't?

What the customer REALLY wants is fast and simple......but they also want the best possible price, maximum trade in value, and the lowest possible interest rate. However, they don't want it bad enough to possibly spend an extra $200! They would rather piss around for 2 weeks trying to save that $200, sit in a dealership for 5 hours, grind it out, and then when it is all over...fill out some dumb fucking survey that says they wish the "current buying system" was different. Be part of the solution you moron!

On this one, I will stand next to Uncle Joe. His previous post doesn't have to be an abandonment of other beliefs. Not to speak for him, this just happens to be one of the areas that I am tuned into.

 

[Chris Cachor]

In the past @JoePistell , you've said that all shoppers want to negotiate - now you're saying all shoppers want fast and easy.

Those things aren't mutually exclusive. You can still negotiate price and close deals quickly. However, I think this sort of application works best in competitive markets where customers know the advertised price is already competitive. They more or less want to show up, sign, and drive.

The trick is making this path to the sale as profitable as the traditional one, and that I think is something the franchises need to support.

Right now, I think the best way to move forward is to remove some of the clumsiness with the online-to-offline sales process and slowly iterate on this, see what works well and what doesn't.

 

[joe.pistell]

Sorry guys...

Here's something I learned from this thread. Communicating nuance is nearly impossible on forums & SM. Its human nature to typecast ppl once you get a read on their beliefs.

I'm all about nuance, and I write as though you can see what I see. It would all line up if you were in my office for a few weeks and we were white boarding

#InnovationIsLonely

 

[Chris Vester]

I'll say very simply and with lots of confidence that a third party, a to z, online buying solution will be in place by the end of 2016. Yes this includes vehicle selection, trade valuation and offer, secured financing, and menu based F&I product sales. All done online.