Online Shopping to Online Buying

[MichaelJ]

I'm surprised that no one has mentioned Roadster.com in this thread. They offer an alternative approach by using dealerships as their "chain of stores like Radio Shack," and I predict that much like TrueCar, Roadster will be very well received when they go national in 2016.

TrueCar is an ever increasing percentage of our overall sales every month year after year. Like the service or not they contribute greatly to "removing the discomfort from retail" as indicated by in store and online reviews and comments. I have yet to meet an unhappy TrueCar buyer. At what's now developed into more than 20% of our total sales it's clear that they're on to something. People love it, but the dealer really has to work it. Closing percentages suffer in single digits because their TV ads encourage everyone, not just those in the market for a car IMHO. It also brings on some prospects that begin by shopping price and later find that what they've worked so hard to find is simply not what they want to drive. Of course at that point price is irrelevant so you get a lot of garbage leads. But dealers that divide their annual marketing budget by total number of units sold will likely find $299 per sale pretty attractive.

Loyalty is a thing of the past. Last month I sold a 2nd car, just weeks after the first to a family that used TrueCar in both instances. I inquired as to why do so the 2nd time around, given how happy they were 10 days earlier. I was told that "there is no loyalty, you are the closest dealer and we will continue to service here, but we were looking for the best price." In the end however, I readily welcome any new source that delivers informed buyers who ultimately become very happy (even if they're not loyal) customers.

I agree with Ed Brook's comment that "consumers’ increasing use of the Internet to buy goods and services, will require dealers’ online efforts to become more “transactional” than they have been in the past." If someone I truly care about is in the market for a vehicle I refer them to TrueCar for new and CarGurus for used. I'm eagerly awaiting the ability to add Roadster.com to the mix.

 

[JessicaRuth]

Roadster looks very similar to Carvana.

Which brings me to what I was going to bring up a few days ago, but like most people....I got distracted.

What about the trade? We've gotten a lot of GREAT feedback about buying the car, but what about the trade?

 

[Chris Cachor]

I hate to be so pessimistic but I think Roaster is already DOA.

First, I think they dumbed down their new car selection interface too much (try finding a new Silverado Z71 with white walls). There's so many options available on a given model that I think there's a lot already missed. I can see ordering a Macbook Pro this way but not my next vehicle.

Two, from everything I've seen so far, it's ~MSRP. My perception is that this is more of a concierge service than a car buying service. I don't really see much value added from the service. I think TrueCar and Costco have more to offer here.

I don't know about you guys but I think Silicon Valley has too much money floating around. The world does not change with a fancy UI

 

[Bruce Hartz]

Most of us are already selling cars from online leads and working numbers via email and phones and when we agree on a deal the customers come to the dealership pre-sold. They are some of our happiest customers and their delivery time is cut in half. Our goal is to make the buying process as fast and easy as possible using Make My Deal along with a soft credit pull tool (no Social or inquiries) that pre-approves our shoppers. Make My Deal gives our managers the ability to desk actual deal numbers and build a relationship with our shoppers.

We have also sold and shipped many vehicles to customers with out a showroom visit but I don't believe that will ever be the norm.

Our websites have not really evolved much at all over the last 10 years and do not provide car shoppers with much of anything useful other than unrealistic low ball pricing, stock new car photos, unrealistic used car quotes, service schedulers that don't set real time appointments etc. We force our shoppers to dealer unfriendly sites like Edmunds to do any research or comparisons, to Manufactures sites to research incentives rates, lease deals and build their vehicles.

In summary I think dealers as a whole have to demand more shopper friendly web sites with great content and tools to make the shopping experience as easy and fast as possible. Now that's a whole other post! In the end most shoppers will want and have to finalize a deal at the dealer. There are to many factors that we dealers are really good at to make deals happen as the term lay down buyers no longer exist. When I was on the floor selling it was a great feeling to put together a really tough deal for a family in desperate need for wheels.

 

[joe.pistell]

Roadster is another business built on the premise that "most shoppers HATE dealers". To create Roadster to solve this problem is simply bad science.

 

[skutchhenks]

Roadster is another business built on the premise that "most shoppers HATE dealers". To create Roadster to solve this problem is simply bad science.

I agree, that's overblown. It's not all about shoppers hating car dealers, rather they hate the unknown. Most people fear not knowing how to proceed and don't want to look foolish. Most dealers are just not very good at making customers feel comfortable about the process, online or offline.

I know most of us here have seen customers with their guard WAY up, walk into the showroom, and inside 10 minutes watch a good salesperson or manager get them to relax, maybe start laughing. Plus do it in a way where they are also uncovering needed information to help them find what they're looking for or give them the information they seek. It's no different online, and you don't need a silicon valley start-up tech or VC money to do it either.

 

[Viracocha]

Consumers don't hate dealers, rather they hate the process of buying a car. If you can make the process considerate of the person and the effort required to jump through your hoops then you're going to win more than you lose.

 

[Mike Burgiss]

...Our goal is to make the buying process as fast and easy as possible using Make My Deal along with a soft credit pull tool (no Social or inquiries) that pre-approves our shoppers. Make My Deal gives our managers the ability to desk actual deal numbers and build a relationship with our shoppers.

We have also sold and shipped many vehicles to customers with out a showroom visit but I don't believe that will ever be the norm.

Our websites have not really evolved much at all over the last 10 years...

Bruce, thank you for your business, we are honored to have each and every dealer that joins the MakeMyDeal platform.

And, I couldn't agree more with your thoughts. Shipping vehicles gives up one of the three most important interactions you have with customers: the test drive, the aftermarket product presentation (and sale), and the delivery and introduction to service. Every opportunity we have to get the customer in the store and having the in-dealership experience is goodness.

And, agreed again, the time has come for VDPs to move beyond publishing and into interactive dealmaking. The key is to have these three things happen at the same time:

1. Build a trust-based customer relationship as a top priority
2. Provide customers the convenience and ease of an online dealmaking experience
3. Stay in control of the deal structure

The great news is doing all three of these together makes doing each of them easier.

Respectfully, Mike

 

[ed.brooks]

Consumers don't hate dealers, rather they hate the process of buying a car. If you can make the process considerate of the person and the effort required to jump through your hoops then you're going to win more than you lose.

This presents a very real opportunity for the dealers who are ready to embrace change...

*from AutoTrader's new "Car Buyer of the Future Study"

 

[joe.pistell]

For me, this post (and thread) is money in the bank.

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

I'm gonna print this and hang it on my wall (if you've been to my office, this would make sense