- May 3, 2016
- 8
- 1
- First Name
- Chris
Patience....You are right, as that process stands right now it is simply lead generation. Someone will come along and do it right.
Online Shopping to Online Buying
- Thread starter Jewanski
- Start date
Patience....You are right, as that process stands right now it is simply lead generation. Someone will come along and do it right.
- Oct 15, 2014
- 32
- 36
- First Name
- Bill
Why would Penske try to reinvent the wheel? Penske may own several businesses, but none of them could be considered tech companies. Most self-made billionaires didn't get that way by making wasteful spending decisions.
This is exactly how most consumers would describe the site, Ed. Verbatim.
This is a "forest through the trees" situation. Penske has access to capital, nearly unlimited inventory of every make, geographic diversity, and human resources to scale. Being a member of the Forbes 400 doesn't hurt when it comes to getting outside advice, either.
My comment was not directed toward Penske's decision to buy a vendor's product. Rather it was a comment that it isn't new, it isn't inventive, it isn't unique to Penske, and it most certainly is not online buying.
Great post @Ed Brooks, thanks for sharing. "Dealers who shift their online strategies to become more transactional will be in the best position to attract and serve customers who want the ease and convenience these emerging online experiences offer" really makes sense. So the goal needn't necessarily be to sell the vehicle online, but attempting to become more transactional clearly makes sense.
RE: "best position to attract and serve customers who want the ease and convenience."
What percentage of the total auto market do they represent, NOT based on how they answer survey questions but based on how they behave in the real world?
How do you define "transactional." I get the impression this is another of those words that have been hijacked and assigned a new definition.
There ARE many segments in the auto market. It is NOT NEW to try to appeal to one segment over another, especially if one feels a particular segment is growing and one might lose access to that segment by trying to appeal to many segments. In my mind, the trick is to appeal to the most members of the most auto consumer segments. 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. My theory is that times are really good and there are many fewer Dealers available to reap the rewards. This has allowed substandard practices to seem more apt than they really are. It won't be this way forever for Dealers. For example, "One Price" works a lot better in a market like this than in more normal times. When times get tougher letting buyers walk might not make so much sense.
We seem to be reverting to previous times when consumers traded vehicles without coming to the dealership except to pick up their new car. This is not new. Decades ago things were much more "transparent" than now. Things were much simpler. Consumers didn't need so much information. They possessed a lot higher percentage of total knowledge than now. These days we bury the customer with information, yet they "know" less. This is progress? This is transparency? While this is going on we forget the basics. Without gross profit to pay people, we have extreme turnover and a lot less talent meeting our customers. As a consequence, consumers meeting their sales person for the first time happens MUCH more often than in the past. With more information available and rookies conveying it its no wonder things are worse now than before. As I attend industry events I am amazed at how Dealers are buried in leads to the point that they are looking for way to weigh leads so they can follow up the best ones first. Many dealers feel betrayed by the promise of the Internet. Instead of reducing advertising and marketing costs, those costs have gone up along with the proliferation of vendors selling those services. This is progress?
What percentage of the total auto market do they represent, NOT based on how they answer survey questions but based on how they behave in the real world?
How do you define "transactional." I get the impression this is another of those words that have been hijacked and assigned a new definition.
There ARE many segments in the auto market. It is NOT NEW to try to appeal to one segment over another, especially if one feels a particular segment is growing and one might lose access to that segment by trying to appeal to many segments. In my mind, the trick is to appeal to the most members of the most auto consumer segments. 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. My theory is that times are really good and there are many fewer Dealers available to reap the rewards. This has allowed substandard practices to seem more apt than they really are. It won't be this way forever for Dealers. For example, "One Price" works a lot better in a market like this than in more normal times. When times get tougher letting buyers walk might not make so much sense.
We seem to be reverting to previous times when consumers traded vehicles without coming to the dealership except to pick up their new car. This is not new. Decades ago things were much more "transparent" than now. Things were much simpler. Consumers didn't need so much information. They possessed a lot higher percentage of total knowledge than now. These days we bury the customer with information, yet they "know" less. This is progress? This is transparency? While this is going on we forget the basics. Without gross profit to pay people, we have extreme turnover and a lot less talent meeting our customers. As a consequence, consumers meeting their sales person for the first time happens MUCH more often than in the past. With more information available and rookies conveying it its no wonder things are worse now than before. As I attend industry events I am amazed at how Dealers are buried in leads to the point that they are looking for way to weigh leads so they can follow up the best ones first. Many dealers feel betrayed by the promise of the Internet. Instead of reducing advertising and marketing costs, those costs have gone up along with the proliferation of vendors selling those services. This is progress?
@Ed Brooks , that is a clip from arguably my favorite movie ever. I have watched that movie every time that I've surfed across it, and have researched the concepts as well. While I understand your comparison and also understand that it is directed at certain (if not specific) members of the forum, I would urge you and others to listen to the last 10 seconds of that clip over and over...until you understand the direction I am going here. "Anyone that is not tearing their team down right now, and rebuilding it using your model...they're dinosaurs"
Tear it down right now, and rebuild it using the CARVANA?? BEEPI?? model? What model Ed? eBay Motors maybe? One Major League Manager pulled off something that had never been done...and it is now time to "tear it down right now". 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 am front and center in terms of preparing for the future. I am in the middle of a big project right now, and as soon as the smoke clears I am personally going to start tinkering with this "rat's nest" (as Joe says). However, tear it down right now is really not a very good move. The here and now is where we pay our bills. The here and now is where I am responsible for putting 5 kids through college.
I understand that it is a movie clip Ed, and a movie clip that I love. My point is, the fact that I am not throwing out everything that makes me a living, is proven, is cost effective, and makes me successful (in my eyes anyway)...does not make me a dinosaur. Quite frankly, the accusation kind of makes me a little hot under the collar. 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.
Tear it down right now, and rebuild it using the CARVANA?? BEEPI?? model? What model Ed? eBay Motors maybe? One Major League Manager pulled off something that had never been done...and it is now time to "tear it down right now". 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 am front and center in terms of preparing for the future. I am in the middle of a big project right now, and as soon as the smoke clears I am personally going to start tinkering with this "rat's nest" (as Joe says). However, tear it down right now is really not a very good move. The here and now is where we pay our bills. The here and now is where I am responsible for putting 5 kids through college.
I understand that it is a movie clip Ed, and a movie clip that I love. My point is, the fact that I am not throwing out everything that makes me a living, is proven, is cost effective, and makes me successful (in my eyes anyway)...does not make me a dinosaur. Quite frankly, the accusation kind of makes me a little hot under the collar. 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.
This shit ain't easy - that's for sure @Tallcool1. You ask the question; which model? I'm not sure. There is as much change going on in retail automotive today as there's ever been, My suspicion is many customers are going to be demanding the ability to at least start the buying process online within the next 2 years. I also suspect that the vast majority will not complete the process 100% online.
Some of the biggest dealer groups are currently in the process of "Tearing Down" their complete sales process and rebuilding it with an eye on the future. Sonic has invested 7 years in their effort. And it's probably easier to do it when times are good rather than when times are bad. 7 years is a long time in a business where success is often measured month to month.
I wasn't directing the clip at anyone in particular, but in general, I think folks that embrace change do better in times of change than folks that fight for the status quo.
PS. As you know, Billy Beene was meeting with John Henry of the Red Sox in that clip. Henry hired Bill James and Theo Epstein, two huge proponents of the same Sabermetric theories used by Beene in Oakland. They ended the 'Curse of the Bambino' and took my beloved Red Sox to victory in 2004. Theo currently has the winningest team in baseball with the Cubs.
Again, I am not one to resist change. I am fine with evolution and hopefully industry improvement.
Again, I know it was just a movie clip.
To the reality now, that movie clip was about cutting the cost per win in a dramatic fashion. It was about building a more efficient mousetrap, not just a better mousetrap.
The 2004 Sox did absolutely nothing of the sort! They didn't build a better mousetrap. The only team that spent more than them was the Yankees. Sure they got wins, and most notably they won the game that REALLY matters...the final game of the season! But they didn't get those wins in a different way. They didn't "tear anything down".
And for the sake of conversation, the Cubs are in the top 15% range on the payroll ladder too.
My point is, that's kind of how I see the Penske deal. Embrace that change...but not really.
Moneyball, both the book and the movie, was about how one 'low budget team' could reinvent the game the front office plays by using new data and having the vision to use existing data in new ways. As soon as the wealthier teams started to play the same game the advantage was lost (witness the 2004 Sox). Sabermetrics really was a tearing down of the old "Does he have an ugly girlfriend" way of buying baseball talent.