Online Shopping to Online Buying

[glh222]

No worries Jeff...can you answer the question, was his post sponsored, meaning did he pay to have it published on Dealer Refresh?

 

[ruggles]

Its not about selling cars, its about making gross profit. Anyone can churn dollars. Where's the glory in that? There are many venture capital startups who make a lot of noise before the splat. Scott Painter has had many on his own. Has any one been successful in auto retail by giving consumers everything they want? At some point, we need to get them to do some things WE want. Otherwise, a blind dog with a note in his mouth could do the job. The skill of negotiation is the justification for our income. Clerks don't make much. Gross profit is what makes everything work. Consumers don't want to pay it. Stop worrying about the OEMs. The only OEMs with a chance at doing it themselves are GM and Chrysler. And they want no part of it.

 

[BillPlayford]

Anyone can churn dollars. Where's the glory in that?

If you're working for glory, go work at Medieval Times.

 

[craigh]

BTW, Can you help Clint?

I'm struggling to keep up with this thread to be honest.
I'm jammed at work putting the finishing touches on our commerce tool and this thread is distracting me from the immediate goals.
Once released I'll be back here picking out all the thoughts on how to improve.

 

[joe.pistell]

Michia is out of the country for a wedding. His absence isn't intentional.

Kool.

 

[BillPlayford]

I asked the question about trade in estimates vs. actual trade in vehicle condition. This was a real question that I asked, not a passively aggressive way to say that it won't work.

Most stores I work with today use the appraisal as an integral part of setting an appointment. Since it's one of the metrics that the stores use to measure success, there isn't much incentive to do it remotely.

At the stores/groups I worked at in Michigan, Texas, and Georgia we had success appraising vehicles over the phone. Since we didn't have cool toys like vAuto and Autotrader TIM, we had to make something for ourselves. We developed (and evolved) a questionnaire that gathered details about the vehicle. As the ability to send high-resolution images became more widespread, we had customers include those, as well. The magic was in letting the customer know we'd have to adjust the value if they happened to not disclose something. 99% of the time they were far more hardcore than any of us would have been. The whole process took less than 10 minutes.

We then took the attributes and ran them against both dealer-facing and customer-facing valuation sites (e.g. KBB, Edmunds, Manheim, Adessa, among others). Other factors included, if we could use the vehicle (for instance we had a customer in mind), or if it was something we needed to wholesale (like a high line). We'd always buffer a few hundred bucks for incidentals. When using this process, we rarely had instances where our number and ACV deviated by a few bucks. We never saw, sniffed, or drove the car. We could still be aggressive while maintaining gross targets.

In this API friendly world, nearly all of these things could be done automatically, and there are tools out there that probably do all of these things. It's just a matter of someone using it properly and sticking to the process.

 

[hondadealer]

The problem is, I don't think that an A to Z, soup to nuts, solution is going to be the winning solution. I think it's much more likely that the winning solution will allow consumers to complete as much of the buying process online as they want and as much as makes sense for them. But very few consumers will buy completely online.

"My sense is the winners and losers in the business, five years from now, will be predicated by how well they assist buyers slipping from the online experience into the physical experience – and perhaps back again." - Ed Brooks
And you thought Internet shopping was disruptive...
​

Wow, quite the conversation. As a dealer who has been utilizing a buy online tool that we developed ourselves, for about 90 days, I thought that I would weigh in on the conversation.
In general, I think that Ed has hit the nail on the head. We are not really concerned as to whether a customer goes all the way through the entire buy online process or, as most customers do, get as much information as they can through the tool before coming into the dealership and completing the transaction. Some will, some won't. Either way, we have sold a car and have a competitive advantage due to:

1) Providing the customer with more transparent information online than our competitors were willing to.
2) We have shortened the time that it takes to complete the transaction once the customer comes into the dealership. This saves our Salespeople time.
3) We have also made the process quicker for the consumer as they can get answers to any question including best price, trade value, and monthly payment in an online format. Our process isn't instantaneous in providing all of this information and it involves a Sales Manager providing the information but in most instances, a customer has everything they need within 30 minutes of starting the process.
4) Gives the customer control over more of the process. Many customers like buying online due to the amount of control that they have in getting information without having to come into the dealership.

Yes, customers usually still want to test drive the car and we still want them to go through the Finance office and no, our tool doesn't even try to do either of these things. So far the feedback from customers who have used our tool either partially or completely in their transaction, love the process and their ability to do at least part of the transaction before they get into the dealership.

I think that as dealers we sometime also make the mistake of generalizing customers interests. A buy online tool is not something that every customer will embrace, especially given how new it is to the retails auto sales process. Some will and some won't, regardless of age, gender, income level, what brand they are shopping, or geographical region they live in. We see the tool as another way of providing more transparent information to the customer and making our website more valuable and relevant to some customers.

Lastly, I think that a buy online tool is not for every dealer. If you are not comfortable providing this level of information to customers before they come into the showroom, then the tool will not help you. For it to work effectively, you need to be committed to providing all of the information that the customer wants before customer commitment. I have been around long enough to know that a lot of dealers are not comfortable with this notion. You also need to be doing an exemplary job with your VDP's including great pictures, descriptions, and absolutely every piece of relevant information about the car that you are selling.

Overall, has it been a game changer for us? Certainly not, but it is a bold first step at moving some of our business process into an online format. History tells us that our industry won't be immune to this evolution. The longer term implications are massive as the model evolves. They include a lower transaction cost (sales commission). If all that is left is the test drive and delivery, we can effectively omit the traditional commissioned salesperson as part of these transactions although I am certain that the vast majority of deals will involve salespeople for many years to come. It also allows us to put less emphasis on bricks and mortar. I believe that the dealership will continue to exist but it is to our advantage if we can complete as much of the transaction as possible before they arrive in the showroom.

 

[BillPlayford]

 

[Michia Rohrssen]

Michia, your silence is leaving us to guess why your hiding your work and that's not good. Do we conclude that you've pulled them down?

Have you run into Digital Retailing Hell that I described earlier?

If you're in Digital Retailing Hell, it's ok, I feel your pain.

I'm probably the furthest away from hell one can be my friend

As Jeff mentioned, currently out of the country for a wedding.



However, a number of questions seem to be questioning our credibility so couldn't resist hopping on the terrible wifi here.

You can find our company quite easily on the Stanford StartX Accelerator Website and Enspire.VC, two of our prominent investors with well established reputations in Silicon Valley.

My cofounder, Marty Hu, also sold his last eCommerce Tech company to DropBox which was covered by multiple sources. So, as you might imagine we know a thing or two about building eCommerce

 

[Jeff Kershner]

Reading through this thread, as I have over and over and over again - I'm not sure why so many of us are up in arms over this topic. Up in arms over ones "case study" that doesn't even point to some revolutionary finding...while admitting to that.

Place a consumer in a shopping cart like experience on a dealership website, while allowing them the opportunity to complete their vehicle purchase online, OR NOT - will it increase your "lead" to sale ratio. Logical sense says YES. ALL DAY LONG.

It was 1999 and by 2001 I was selling 2-4 new Volkswagens (unseen in person) a month minimum from my website vwrep.com. I supplied great photos, amazing descriptions and was optimizing my pages for the SERPs before it had an acronym. Many of these cars I delivered in person or picked the customer up at the airport. For a freaking Jetta!!

Fax me a copy of your drivers lic and credit app and let's get this done. No Mr. Banks, no need to come into the dealership before you take ownership, unless you want to. Obviously if my vehicle isn't what I said it is, I wouldn't expect you to take it home. Just like if your trade-in isn't what you said it is, you can't expect me to give you the full pre-determined value. Fair enough?

What sales pro hasn't completed almost all off of the paper work before the customer shows up to take delivery? This happens ALL THE TIME. And guess what.. happiest customers! "Wow that was the fastest car purchase ever" - Every time.

What's the difference?

1999 - 200? - how many of you bought a Dell computer from Dell.com? Why?? Their computers weren't any better than the others, but the experience was revolutionary. Dell was the pioneer of the online shopping cart. You knew what you were getting and were more likely to purchase the extended warranty online (why not, it only made a $5 a month difference.) Or you could stroll down to your local Sears or Radio Shack and get your hands all dirty on the physical mouse, turn the monitor on and off, slide your fingers across the chinsy keyboard while dealing with some idiot in a stained tie that didn't know 2 shits about that Compaq computer. But he/she sure knew how to pitch that extended warranty while you're filling out that long credit application.

Comeon Jeff, you can't compare a computer purchase to a car purchase.

Why can't I?

Maybe you're trying to convince yourself it's more different than what it really is.

I'm even a car enthusiast. I LOVE to drive. I have 30+ hours on the track at ---

Regardless, if I've done my research and I'm 99% sure on what I want to buy or lease and you allow me the opportunity to do 99% of it online (especially if I've already bought from you before), making the experience effortless - sign me up!!

Do I represent a majority of consumers?