Say Goodbye to the Car Salesman??

[Jeff Kershner]

Yahoo Finance published an article several hours ago titled "Say Goodbye to the Car Salesman".

The article points out how different todays customers are.. "Customers are simply different today. They've scoured the Web for up-to-date price information and have probably made a decision even before showing up on a dealer's lot. The salesman doesn't have as much to do."

I often wonder if consumers are really that different when they are in the dealership and its time to make the final purchase? - what do you think?

They go on to quote Alison Spitzer --

"The whole process of buying a car has been flipped flop from what it used to be," said Alison Spitzer, vice president of Spitzer Auto Group in Elyria, Ohio. "Today, customers find the car first, then the dealership."

Not sure I agree with the process for purchasing a car has changed but no doubt the shopping process has - though I'm sure this is what Alison was referring to.

"Today, buyers call or walk into a showroom already armed with a car's invoice price, competing dealer bids and discounts from the manufacturers, and can get updates on their cellphones while standing in the store. They can access online reviews of the salesperson and dealership."

Yes - but does this really change the process for purchasing the vehicle?

"Large dealership chains like AutoNation Inc. are testing new ways of paying sales people because of shrinking per vehicle profit."

"John Iacono, co-president of Bram Auto Group, which owns the store, said: he was inspired by the simplicity of Apple Inc.'s retail stores."Why do we make it so complicated?" Mr. Iacono said. "In the last 100 years, automobiles have gone from near-horse buggies to almost driving themselves. And yet, the way they are sold hasn't changed."

How long will it be before before we Say Goodbye to the Car Salesman?? 5 years - 10 years - 20?

Will the change be so drastic that within time the vehicle purchase will be much like walking into an Apple store to pick up your new iPhone?

Here's the entire article

 

[Jeff Kershner]

Fuel to the fire -- Now You Can Buy A Car From A Vending Machine - Business Insider

 

[cmjerry4531]

"Today, buyers call or walk into a showroom already armed with a car's invoice price, competing dealer bids and discounts from the manufacturers, and can get updates on their cellphones while standing in the store. They can access online reviews of the salesperson and dealership."

All they need is to test drive a vehicle, and convince them to buy it! If only we had someone who could do that... how about a Salesperson! Robots can pick based on awards and stats. Humans want to drive the vehicle, feel how it drives and see if they like the look of everything. You can't feel the softness of the interior, or tell how well you can see through the windows without being there in person.

Add in the pressure of making such a large purchase, and it makes the whole situation more complex. It takes an actual human being to answer questions, demonstrate features and ultimately convince someone to purchase a vehicle from their dealership. Plus, who will brush the snow off of the vehicles if there are no salespeople.

Laptops and Cell Phones are much smaller purchases, and have much more detailed info on the internet, yet places like Best Buy have salespeople there to help with questions and try convince people to buy.

 

[richchew]

I think this article is interesting, I actually tweeted it yesterday too, but I do think it is really reaching. People have had the ability to buy a car this way for years. If anything I believe the Internet has greatly helped overall car sales. It has given the buyers a feeling of empowerment and has allowed them to gather the information they need to feel comfortable to journey into a store.

Internet sales has been around for over 2 decades in the car business and still only about 20-30% of business can be attributed to pure internet customers and even they are still coming in to the dealer(s) to complete the process and most are not buying until they have seen, touched, smelled, and drove the vehicle.

Since the beginning of the internet it was suppose to be the "end of car sales" as we know it and kill all chances of making a profit. Yet, gross averages are still about the same, retail sales are still strong and vibrant, and walk in traffic is still very prevalent.

Saturn’s business model was that people would get on the website, build and order their car, and they would deliver it to their door. Remember the ad with the college students, "did someone order a Saturn?" well we all seen how Saturn turned out.

Now what we have is a much bolder, smarter, better informed and confident shopper. Along with that we (dealerships) have gained a more serious and ready customer walking in and greatly reduced the tire kicker as most tire kicking is done in there living room. I truly think that internet sales are the best thing that has happened to the car business in many years, if it is handled correctly. It has taken the fear factor out for most clients and has made it a more enjoyable experience. Of course dealerships have had to adapt, create new process and learn new technologies but it they have been willing to than they are probably feeling the benefits.

Retail business has change for the whole world but Brick and Mortars still remain because even though in peoples perception the concept of the “great price” is important so is the overall human interaction and the experience of being in the moment and making the purchase on a big ticket item. That is why we still have Best Buys, Nordstrom’s, Macys, huge malls, corner boutiques, and so on. Consumers are still more emotional than they are logical. If they weren’t we wouldn’t be selling people $40k cars every 2-3 years.

The biggest foe to dealerships in my opinion, especially when it comes to profitably and loyalty of the dealership, is 3rd party lead providers. Which I find humorous since we are their customers and we pay them tremendous amounts of money for them to undercut and short sell us. We pay them for a service that is set up by design to make us look bad and untrustworthy so they can look like the good guy to drive our customers to their sites so they can gather them up and sell them back to us.

 

[Alex Snyder]

Pre-Internet, consumers visited about 3 dealerships. Today, consumers visit more than 20 websites before making a car purchase and barely visit more than one dealership to actually make the purchase. They know what they want and what the price should be. The sales floor I worked on is ancient history.

Competition is no longer as important at the sales floor level as it is on the pre-visit level.

Add to that the reference to shrinking profits, in the Yahoo article, and it should be obvious that dealers need to be smarter about their money. The smart money would bet on investing more in the higher funnel traffic than the lower funnel stuff that already chose you.

 

[ed.brooks]

Dale Pollak wrote a blog post today based on his response to the original Wall Street Journal article. I loved this take;

"...we increasingly see that dealers who give consumers what they want—clear pricing, less time required to purchase a vehicle and a more customer-centric sales experience—proves to be a recipe for success" - Dale Pollak​

 

[ddavis]

Dale Pollak wrote a blog post today based on his response to the original Wall Street Journal article. I loved this take;

"...we increasingly see that dealers who give consumers what they want—clear pricing, less time required to purchase a vehicle and a more customer-centric sales experience—proves to be a recipe for success" - Dale Pollak​

Ed, you know that I am a fan of Dale. Most dealerships remain clueless to merchandising their cars even if they accept the velocity approach. They either don't know or are unwilling to put in the effort.

The average person can't make a decision. You still need salespeople that can close the deal. With "clear pricing", you have to focus on other ways to make money, switch to leasing, underevaluation on the trade, selling accessories and optimizing F&I. Do you want to leave this to a clerk?

 

[joe.pistell]

The Internet is a flat, 2D experience.
The Dealership visit is 3D and that's where the real MAGIC happens.

The Internet is the gateway to a sale. If your Internet price and merchandising is... "OK", then it probably sucks and someone else will be working their MAGIC.

Uncle Joe Rule # 112: "shoppers are on someone else's site more than yours"

 

[ed.brooks]

Ed, you know that I am a fan of Dale. Most dealerships remain clueless to merchandising their cars even if they accept the velocity approach. They either don't know or are unwilling to put in the effort.

The average person can't make a decision. You still need salespeople that can close the deal. With "clear pricing", you have to focus on other ways to make money, switch to leasing, underevaluation on the trade, selling accessories and optimizing F&I. Do you want to leave this to a clerk?

Doug, you know that I would never presume to speak for Dale, so I'll let his words stand on their own.

MY thoughts; Customers used to shop on the lot, and buy on the lot. Many times going from one dealer lot to the next until they made their decision. Today, many (most) customers shop online. They still buy on the lot. And a salesman is still required to close the deal and handle the details. But the business is evolving. A salesman doesn't need to spend 80 - 90 percent of his time helping customers SHOP for a car. TODAY, a salesman can spend his (or her) time helping customers BUY a car.

And yes Doug, I agree with you on the importance on merchandising. If the majority of their shopping process in being done online, you best make damn sure that your car is standing tall!

 

[yagoparamo]

Dale Pollak wrote a blog post today based on his response to the original Wall Street Journal article. I loved this take;

"...we increasingly see that dealers who give consumers what they want—clear pricing, less time required to purchase a vehicle and a more customer-centric sales experience—proves to be a recipe for success" - Dale Pollak​

I think that this applies to every business in the world. Give customers the round around, play price games, be shady, and don't care about their needs and you will be out of business in days. The car industry got away with a lot of it for a long time but so many other industries did. The tobacco industry got away with selling poison and the fast food industry sold us who knows what disguised as chicken. The world is better, safer, cleaner, and the car industry is not immune to the change.

I recently visited Chicago and when I went to the mall to get a coffee there was a Tesla store next to the Starbucks. I was curious about the car, the store, and the experience (sales process).

The experience reminded me more of an Apple store visit. We got greeted at the store and proceed to check things out. The girls were truly there to answer questions and worked the technology (iPad in hand) to show us features in the car. I asked if I could drive it ($100,000 car) and they said there was an opening at 11.30am so I put my name down. Drove the car, did the whole thing, and not even once they asked if I "wanted to buy it", "if I had a trade", "if I was thinking to finance", etc They truly just showed me the car and focused on being useful.

Think about the fact that during that week the Corvette Stingray hit the Chevy dealers. In your honest opinion; if I went to test drive the Corvette how would the two experiences compare?

The role of the salesperson will always be there. We need interaction and reinforcement from others when we buy. We need guidance. We need 'experts'. We need friends. The role is just changing from what we thought it had to be.