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Online Shopping to Online Buying

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#231
ruggles said:
RE: "By appeal" I mean to do business with at substantial gross profit. I continue to be amazed at how vendors, bloggers, and so many so called industry experts have lost from their vocabulary the words that make up "gross profit." Our business isn't about selling vehicles, it is about producing gross profit.
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I think it's important that you make the distinction between new and used, @ruggles. The amount of potential front-end gross profit has waned considerably on new models, across all brands, over the last two decades, and especially after the Great Recession. Making additional gross has nearly everything to do with selling additional products (e.g., warranties). One can also argue that prices have normalized considerably since the advent of services such as KBB, Edmunds, vAuto, etc., thereby regulating the market value of vehicles. Finally, as a whole, franchised dealerships maintain a 2% (plus/minus a couple of fractions of a percent) profit margin (as according to NADA). I don't think people have forgotten the vocabulary word. They've just moved on.

Our business isn't about selling cars or producing gross profit: It's about staying in business. If any business has a 2% profit margin, its only saving grace and key to sustainable growth is customer retention. End of story.

Tallcool1 said:
While I love the movie, the truth is, this cutting edge idea really hasn't worked out all that great. The success has never been duplicated...even by the guy that invented it! The A's have never matched the success that they had in the 2002 season. Close a couple times, never equaled. But...tear it down!

I would welcome you (and anyone else for that matter) into my store to "show me how it's done". I will sit quietly, listen intently, and be legitimately open minded. Please don't imply that I am a dinosaur because I am not Carvana.

This shit isn't easy.
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@Tallcool1 brings up a good point. Moneyball didn't fail, however. It didn't take other teams long to figure out the A's secret, and they began to adopt those same techniques almost immediately. The stats worked, and it worked for everyone, thereby cutting down the A's advantage. Nate Silver offers an awesome take on this in his book The Signal and the Noise.

I think anyone in retail can feel your frustration. The good news is that you get to decide how you measure your own success. First, make sure you understand what's legal to do in your state. Laws vary widely across the country. Then, pick just one tiny thing you think can workout online, and evolve from there. No one said anything about dynomite. Tear it down one brick at a time.

I'd be happy to take the time to explain to you how I found success selling online (I mean in the least "salesy" way that's humanly possible; just want to help). If you want a couple dealers' perspectives, I'd reach out to Tom Vann of Albion Motors and Doug Waikem of the Waikem Auto Group. These guys were at it long before a shopping cart was technically feasible. Moving towards an ecommerce approach is totally possible. Like anything in life, the best things come from patience and effort.
 
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#233
Ed Brooks said:
AutoDealerLive.net had a great discussion about this subject yesterday (Partially inspired by Dealer Refresh)
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Thanks for posting that. Was a pretty good discussion until it deteriorated to a "sales managers make too much" argument. Before that most of it surrounded concerns we've discussed this and defining what online buying really is.

One great point to consider from @kevinfrye was about how customers will often pay for convenience in other businesses. Creating an online buying process does not necessarily mean that we're going to lose all gross profit.
 
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#236
Jeff Kershner said:
Could this be true for our industry as well?

Would the ability to purchase online provide enough convenience to entice a sizable portion of consumers to do business with your dealership?
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I believe that there are customers that will pay more for convenience. I say this because Carvana prices are not really all that aggressive and they are moving iron!

The most important part of your question is the phrase "sizable portion of consumers". At this point, I don't believe so. Going into the future, I believe that there will be a transitional period where the answer is yes. Once the markets are saturated with dealerships offering this type of service, I believe the answer will then become a resounding no.

@Bill Playford referred to this about 5 posts up the page, and I believe he is right. Below is his quote.

@Tallcool1 brings up a good point. Moneyball didn't fail, however. It didn't take other teams long to figure out the A's secret, and they began to adopt those same techniques almost immediately. The stats worked, and it worked for everyone, thereby cutting down the A's advantage. Nate Silver offers an awesome take on this in his book The Signal and the Noise.

That is my opinion today. My goal is to be positioned when the transitional period gets here. I don't know how far off this is, or if it will ever get here. Time will tell!
 
Dominion DMS
#237
Throwing in my 2 cents on guessing the future. I see online buying for used cars increasing in small increments over time (new cars will obviously accelerate faster). IMO, there will be an internet "disruptor" that shakes things up, not an automotive online technology. The majority of trust is with the internet not specifically automotive to make a huge transaction like a car or home. The technology from within will keep pace with small spurts of growth but the real growth that will impact the majority of dealers to where they "feel" it will come outside of automotive.

My conspiracy theory / a blend of all things below plus things outside of my realm of thinking:

AI - I see something like Google Assistant becoming huge. I think this little guy or a form of it is going to become each individual's best friend and it's going to know you inside and out over time. You will give basic directions like I need a "family SUV with blah blah blah, and I hate the color red". It comes back with a list of 20 and gives you the data YOU want - reviews, etc.. Instead of starting your search with 100's or 1000's of vehicles to weed from, you have a compact list that you love because your little buddy knows what your REAL hot buttons are and knows how to look better than you. I could see him negotiating with your website at some point to get a list of the best deals, who knows.

If blockchain takes off, it's going to be a huge driving force, just not quite sure on the how, but it will be all centered around trust. There's been a number of great articles posting about it for the past couple of years. Here's a recent one http://www.huffingtonpost.com/don-tapscott/the-impact-of-the-blockch_b_10212024.html

Virtual reality has to somehow make its way in, also test drive videos. The "feel" part is missing from the internet, but it will take its own shape in time that consumers trust.

Much more will help the transformation but I think the hurt (or joy for some dealers) will come from an outside force that we don't see yet. All in all, I think automotive does a great job being exactly where the public is at all times. You have the top 10% driving the evolution and the rest follow when the market is ready or there. Have to wait for the customers to be ready first but if the money is there automotive WILL adapt.
 
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#238
Jeff Kershner said:
Would the ability to purchase online provide enough convenience to entice a sizable portion of consumers to do business with your dealership?
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JoePistell said:
Why eCommerce has failed to make a dent in our market... yet*.

My Summary 1st:
#1: We are a ROBO marketplace (Research Online, Buy Offline)
#2: Today's car shopper visualises car shopping as a ROBO experience.
Result: Successful Disruption must break #1 & #2 (above).

High-level observations:
Observation #1: Shoppers Don't Know Cars**.
Observation #2: Shoppers conduct product discovery in tandem with price
Observation #3: The Internet hasn't figured out how to solve Observation #1
Observation #4: Shoppers stuck at 'Observation #1' finally give up on the internet and go to the dealer


Why has "Build it and they will come" failed?
From the very moment a person thinks "I need a new car" they visualize ROBO (Research Online, Buy Offline). But, I believe that all car shoppers start internet shopping prepared for a totally new experience that'll break them from ROBO workflow. Car shoppers get 10-20-30 sites into their journey, they LEARN that -like the last 3-5 cars they bought- they must let go of the internet and head into the store to move the decision making process forward.

This is important for dealers and vendors...
Today's car shoppers are ready for change, but they CONCLUDE that nothing significant has changed for them. As the shopper approaches the final mile in the journey, they use the Internet to help them find the best dealer that'll give them a productive car shopping experience (i.e. pick up where the internet shopping left off).


Actionable thoughts for Dealers:
Shoppers are judging you!
Pictures tell a 1,000 words (make this Job #1)
--Great inventory pictures will create more ups and sales than anything you'll ever do.
--BIG VDP pictures is what your shopper wants to see.
--Look at your competitor's VDPs & make your photos better (MORE photos is NOT better, I'm talking more quality!)
Get your why-buy message on your site ASAP.
Shoppers LOVE choices, if you have multiple similar units, work hard on finding ways to include them into everything you do.

Actionable thoughts for Vendors:
Roll up your sleeves, we've got a long road ahead of us ;-)

HTH
Uncle Joe


*made from listening to customers inside stores for about 20,000 hrs...
** examples: Shoppers know what they know. They know what price is, they know vehicle class (e.g. SUV, Sedan), they know Makes (e.g. Ford, Nissan), they know colors, etc... They don't know Trim or packages.
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#239
Joe, thanks for reposting a previous comment, but just because you "provide" the ability to purchase online, I agree that most won't go all the way through it. However, I believe thought out this conversation we tend to loose sight on the impact of "providing" the ability to purchase online can have. Why is this being overlooked and dismissed?
 
#240
Jeff Kershner said:
Joe, thanks for reposting a previous comment, but just because you "provide" the ability to purchase online, I agree that most won't go all the way through it. However, I believe thought out this conversation we tend to loose sight on the impact of "providing" the ability to purchase online can have. Why is this being overlooked and dismissed?
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Good morning JK!

I'm 100% with you. My reply speaks to why it's converting poorly, your observation speaks to 'does the presence of the ability to purchase online influence the car shopper?' If so, how so?

It's an interesting thought. I'd like to explore your thought.

From my seat, once a car shopper becomes immersed in internet shopping, it's there that they ‘hope’ to run into a new Internet solution that’s better than the last time they went car shopping (e.g. I keep trying to find something better than Zilllow, but can’t ;-). And, we all know, In our industry, there's been no significant changes to Internet car shopping, so, I think your observation has potential to influence some shoppers.

I'll use one of my design tools on this and see where it goes...

"Customers often buy things because they have a problem they would like to solve…. If you understand the job, how to improve the product becomes obvious.”
-Dr Clayton Christensen​


To find an answer, we can ask ourselves: "shoppers are trying to solve a problem, does the presence of the ability to purchase online influence the car shopper?"

In this light, I'd say yes. ( a conditional yes, but a yes for sure!)

Now you got me thinkin... this is a great topic. :)
 
Dominion DMS
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