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Online Shopping to Online Buying

Alex Snyder

President Skroob
May 1, 2006
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I just don't see us going to a completely online e-commerce delivery model any time soon. I think buying a car is more like buying a house. I would not purchase my home by looking at pictures of it online even with a money back guarantee. It's still a very emotionally driven decision and an expensive one at that.
Looking at the world today, and the technologies that are currently operating I totally agree with you Paul. And buying a home or car is incredibly emotional for sure. However, I think there are technologies in the coming future that could disrupt our entire view of things.

I think the consumer can be trained to make their own car buying transactions given the proper tools and dealer acceptance. There are a few steps that will take some incredibly wise automotive psychologists to identify and solve, but the consumer has already taken the first step. And quite a few dealers are taking step number two right now.

Step 1: The Internet created a more informed consumer that scared dealers into competing their prices down to the point where profits are just ugly in comparison to where they were before the Internet.
Step 2: Sales profits (especially on new cars) are significantly trumped by the service department. After 15 years of this some dealers are realizing their sales departments main function should be fueling the service drive by creating loyal customers; not attempting to create unachievable profits.
Step 3: Technology begins to evolve to assist the model that comes from a full shift of profit-seeking-sales to customer service.

On the extreme side: there is the possibility the self-drive car (also a long way off) is made available in a rental model; instead of an ownership one like we have now. In this rental model you pay a monthly fee to the company who owns the car for use of it when you need it. They might have programs where they guarantee a car to be to you within 20 minutes for $400 a month and another where the guarantee is less than 10 minutes for $500.... who knows. But that sure would change the car buying experience too.

The one thing I know for certain is that change is coming. It is coming because of technology.... technology that already happened and/or technology that hasn't happened yet.
 
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craigh

Super Moderator
May 19, 2011
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Let's talk design strategy. Of 100 car shoppers, how many fit the profile you'e described? Let's create a study!
  1. We watch our 100 car shoppers approach the buying phase. We separate out all shoppers that have very strong product knowledge and brand preference. How many are left?
  2. Next, from those that remain, we separate out shoppers have that enough knowledge and confidence to buy without going to a dealership.
We began with 100 car shoppers, how many remain? This is how large TODAY's audience is.

The great design challenge of 2015 tries to understand why so many shoppers PREFER the car dealer visit.
Let me flip this on it's side a bit and please tell me if this makes any sense at all.

Of 100 dealers in a 1 hour radius, how many of them are willing to sell cars online?

Let's say the answer to your question is, at a bare minimum, 1. Then let's say that currently 1 in 100 car dealers are willing to sell cars online.

Is it possible that 1 + 1 = 100 potential customers for the dealer that's willing to do it?
 
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ispekhov

Green Pea
Feb 13, 2015
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Ilya
I want to believe in pure online purchase but we aren't there yet. People struggle to buy a shirt online and we are talking about a car - highly customizable, second most important purchase in life. It will happen, it's inevitable the question is when? My guess in 20 years. By that time the market should be well saturated by electric cars.electric cars means less maintenance = less fear of something going wrong.

For now, some kind of a hybrid model could be relevant.
 

craigh

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May 19, 2011
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I buy everything online, so for me the car just makes sense. If I can buy my next car online then all I have to solve for is groceries.
 
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joe.pistell

Uncle Joe
Apr 7, 2009
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I buy everything online, so for me the car just makes sense. If I can buy my next car online then all I have to solve for is groceries.
Craig,

This may sound really really weird, but your lagging the new trend on internet. The hot new internet shopping experience is bringing the net into the store. Best Buy is the poster child of webrooming




Before you call me out, consider this data science presentation
The Four Horsemen: Amazon/Apple/Facebook & Google--Who Wins/Loses
Very insightful.

(for those that are attention challenged, fast fwd to 1:50 ;-)
 
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ispekhov

Green Pea
Feb 13, 2015
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Ilya
Joe, awesome video. Watched it couple weeks ago.

See in store and buy online. This is the trend.
 

joe.pistell

Uncle Joe
Apr 7, 2009
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Joe, awesome video. Watched it couple weeks ago.

See in store and buy online. This is the trend.
Ilya, that's the old model. The hot new model is shop online & buy bricks and mortar (see that diagram again). Its a far richer shopping experience.
 

ispekhov

Green Pea
Feb 13, 2015
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Ilya
Ilya, that's the old model. The hot new model is shop online & buy bricks and mortar (see that diagram again). Its a far richer shopping experience.
I'm afraid the diagram is incorrect :) the point professor is making is that offline shopping is on decrease because online shopping/buying is much more sustainable model for a business - no costs associated with running a store, rent, staff etc. And because of that, all stores becoming just showrooms - # of offline transactions is decreasing. $$$ spent online is increasing. Books are a great example. For electronics for example, People find a product online, go see it at a store, buy it online for cheaper.
 

craigh

Super Moderator
May 19, 2011
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Craig
I'm afraid the diagram is incorrect :) the point professor is making is that offline shopping is on decrease because online shopping/buying is much more sustainable model for a business - no costs associated with running a store, rent, staff etc. And because of that, all stores becoming just showrooms - # of offline transactions is decreasing. $$$ spent online is increasing. Books are a great example. For electronics for example, People find a product online, go see it at a store, buy it online for cheaper.
I think that's the exact opposite of what he's saying?
He just said Amazon has to buy a brick and mortar store because that's where sales are heading...

What you are describing is the reason Amazon rose to fame, but that was years ago.

I thought the video was interesting, but I would have to far more reading to actually back this up.
Many of the statements he was saying seemed to be said simply to contradict the common thinking or analysis. Way too many point that were backed up with 1 or 2 simple charts - you can find data to back up any theory.
 
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