Online Shopping to Online Buying

[Chris Cachor]

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.

Ultimately, I think it's a trend towards trying to remove the discomfort from retail. Combining these efforts (online property with retail locations) is the ultimate win. I think the sales tax requirements have also made Amazon (as well as other big online purchases) less attractive.

For automotive retail, I think the trend will be to allow a seamless transition to the sale for online buyers. From my experience there's a big disconnect from doing your research online and coming into the store.

In a perfect world, I'd like to come into the store and give you my email address. From this you can lookup the vehicles I'm interested in, take it/them for a test drive, see my trade info, and move the process along quickly. Instant gratification!

 

[Baron Ringler]

In many areas of the country, the ones not saturated with 6 stores of the same brand within a 10-mile radius (like mine) the idea can work, just like one-price stores. But in those saturated areas customers WILL take whatever numbers and go to the next store, "can you beat this". If that weren't the case then one-price stores would be successful. One of my "competitors tried that style for 5 months and their volume was cut by two-thirds.

As stores, we have trained the customer to do that and it will take a very long time before it is completely excised from the auto sales process.

 

[Chris Cachor]

As stores, we have trained the customer to do that and it will take a very long time before it is completely excised from the auto sales process.

Agreed. OEMs need to step in and help here. MAP pricing or something.

 

[joe.pistell]

Ultimately, I think it's a trend towards trying to remove the discomfort from retail.

Many Killer observations Chris, I like this one 1st. I think you helped kill an urban legend.

Overview: Human to human negotiation is simply a form of price discovery.
Buyers see the sellers offer and request a lower price. In certain sectors, there is a tradition of negotiation prior to the sale (e.g. Real Estate, flea markets, car sales (dealer & private), etc). Sellers in these markets prepare themselves for negotiation by posting the offered price, fully expecting a counter offer.

I hear no buyers whining in real estate or at flea markets, why do shoppers have "discomfort" at car dealers?
In real estate, the seller is your peer (just a guy like you). Plus, you have an professional buyers agent to coach you along.
In a car sale, the buyer is under the sellers roof, alone against skilled negotiators (sales reps and managers).

Car Shoppers hate dealers, NOT because they hate to negotiate, but because they fear they're "under-gunned" in the fight. One price stores address this by removing negotiation, but, this does not address the shoppers need for price discovery.

Price Discovery for car shoppers happens in 2 places.
--While Internet Shopping (i.e. sort by price)
--At point of Sale (i.e. shopper makes an offer)

Summary:
All shoppers want to feel good about the price they've paid. To help a shopper end negotiation faster and to help them feel more satisfied, creative vendors will find build tools for creative dealers to confirm the shoppers need for price discovery to validate the final decision.


WTG Chris

 

[joe.pistell]

we have trained the customer to do that and it will take a very long time before it is completely excised from the auto sales process.

Hey ya'll, stop falling on the knife!!! Dealer's have not created negotiation. Negotiation is a product of FREE WILL.

Example:
You can buy a Camry anywhere. Shoppers are free to shop among multiple Camry dealers to find the best car at the lowest price.

Use your imagination. Filp the tables. Imagine all car companies were like Tesla or Apple where you pay MSRP or hit the road. Then, a fresh new and disruptive car company comes in and says "...We give our dealers to freedom to sell at any price they need to win your business BUY LOCAL is important to us!".

 

[craigh]

"They have to" applies mostly to cases where there is no choice. For example, autotrader in Canada. Dealers have to list on autotrader because there is no choice.

There is a choice. I have 2 dealers right now who don't list on AutoTrader.

 

[Tallcool1]

Hey ya'll, stop falling on the knife!!! Dealer's have not created negotiation. Negotiation is a product of FREE WILL.

Example:
You can buy a Camry anywhere. Shoppers are free to shop among multiple Camry dealers to find the best car at the lowest price.

Use your imagination. Filp the tables. Imagine all car companies were like Tesla or Apple where you pay MSRP or hit the road. Then, a fresh new and disruptive car company comes in and says "...We give our dealers to freedom to sell at any price they need to win your business BUY LOCAL is important to us!".

Good point!

If customers don't want to negotiate......then don't. Just write the check.

 

[Joe Johnson]

Many Killer observations Chris, I like this one 1st. I think you helped kill an urban legend.

Overview: Human to human negotiation is simply a form of price discovery.
Buyers see the sellers offer and request a lower price. In certain sectors, there is a tradition of negotiation prior to the sale (e.g. Real Estate, flea markets, car sales (dealer & private), etc). Sellers in these markets prepare themselves for negotiation by posting the offered price, fully expecting a counter offer.

I hear no buyers whining in real estate or at flea markets, why do shoppers have "discomfort" at car dealers?
In real estate, the seller is your peer (just a guy like you). Plus, you have an professional buyers agent to coach you along.
In a car sale, the buyer is under the sellers roof, alone against skilled negotiators (sales reps and managers).

Car Shoppers hate dealers, NOT because they hate to negotiate, but because they fear they're "under-gunned" in the fight. One price stores address this by removing negotiation, but, this does not address the shoppers need for price discovery.

Price Discovery for car shoppers happens in 2 places.
--While Internet Shopping (i.e. sort by price)
--At point of Sale (i.e. shopper makes an offer)

Summary:
All shoppers want to feel good about the price they've paid. To help a shopper end negotiation faster and to help them feel more satisfied, creative vendors will find build tools for creative dealers to confirm the shoppers need for price discovery to validate the final decision.


WTG Chris

Joe, you are a brilliant guy. Even with "no haggle" pricing, many shoppers will assume that they can still get a better deal. I think a lot of times they are just looking for the affirmation one way or the other. There is always competition, and so many commercials or advertisements telling people to "come here instead and the price will be lower!" I will agree with those who say that it creates an atmosphere of uncertainty. Whether you are buying a Corolla or a Bentley, you could certainly pay thousands more than the next guy if you don't do your homework. For that reason, I think that many customers with the same need are following different processes.

ex:

Customer driving an F150 wants a new F150.. He doesn't need to see it or drive it to know that he will most likely be happy with the model. You would think that these customers would follow the same process every time, but there are so factors concerning the "price" end of the deal. He could ride down to the local dealership and negotiate and be completely satisfied. He could also price shop online and copy/email offers from each dealership until he gets it as low as possible. Either way, if he senses that he isn't getting the best deal he can get, then he probably wont pull the trigger. I don't think that the medium is as important as the validation. I am no Grant Cardone, but my approach has always been one of TRUST. If a customer trusts you, then when you tell them that they are getting a good deal, they will probably take it. I know that everyone here already knows that. Not to get too far off topic...

I think the online research to in-store demo and price negotiation has been the model for a little while now. With NEW cars, a trend I have noticed on the sales floor lately is the exact opposite, especially with financially savvy customers. I have dealt with plenty of Volvo buyers who would come in demanding a test drive of model XYZ and refuse to talk numbers until they could get back home and research prices (online quotes from other dealers.. Truecar...) No amount of early TO's or value building could slow them down. Ive literally called other dealerships for quotes with the customers sitting there to make them feel good about our numbers (be careful!!!) There are a few crazies out there who just love to haggle, but I think most people simply want to feel good about the price after they find the car that meets their needs.

 

[joe.pistell]

...In a perfect world, I'd like to come into the store and give you my email address. From this you can lookup the vehicles I'm interested in, take it/them for a test drive, see my trade info, and move the process along quickly. Instant gratification!

Chris,
you've described my 1st product here at Dealer.com; MyCars http://www.dealer.com/products/websites/mycars/ NADA 2014 Best of Show

 

[joe.pistell]

...For automotive retail, I think the trend will be to allow a seamless transition to the sale for online buyers. From my experience there's a big disconnect from doing your research online and coming into the store.

Chris,
This is Awesome Observation #2. It's so important I gave it a name.... I call it "The Jump".

IMO, "The Jump" is the most overlooked phase in car shopping. "The Jump" is where the shopper finally comes to the conclusion that it's best to abandon weeks of Internet-only shopping and go into the store to move the RESEARCH forward.


No-one talks about this "event" in car shopper behavior because it's invisible. I've been deeply studying "The Jump" for years. Here's a 2009 post [My Bizarre World] that takes a high-level pass at this amazing mystery I call "The Jump"...

So, what triggers the shopper to leave the safety and comfort of the Internet? IMO, shoppers leave us clues, I ask for everyone's help on this thread:
QUESTION: What are the Top 3 questions shoppers ask when they arrive at your car dealership?
(please add more answers to the thread!!)


Summary: All a shopper wants to do is to make a great decision.
Just a few years ago, shoppers would arrive in the showrooms without a smartphone. Today, the shoppers wants to bring the internet into the showroom workflow. Don't fight it... find a way to embrace it. I'll be on the lookout for dealers that have found a way to become a shopper's partner, because, all a shopper wants to do is to make a great decision.