Thoughts on a big-city test for no-haggle pricing?

[craigh]

For me, especially when looking at luxury segment, I think this could be a shift towards the online sales avenue as well.
One of the biggest aspects of buying a car online is the price; how you negotiate online is a critical piece of that puzzle.
I don't know yet whether this is what Lexus is heading towards or if it's at all relevant, but I know that there's always open discussions on the subject of new car pricing on the OEM website vs the pricing at the dealership. Once they start selling their cars for the exact same price they are listed online, I can now start to cut the dealer out because I don't expect to get a better price at the dealership.

Example: If I'm going to buy a Porsche Cayenne I'm going to build it out online, pick all my custom features, choose my colours and build that car. When it gets to the end and gives me a price, I expect that's the price I'm going to pay and it's indifferent of any dealership where the car may be delivered. If I suddenly found out that Toronto Porsche sold their cars for less than my home city, now my entire online purchase experience changes because I have to print this out and re-do the entire process at the dealership to try and get a better price.

[insert Tesla commentary here]

If that makes any sense at all, I have a feeling this could be part of their experiment.

 

[ruggles]

We have already had many One Price/No Negotiation tests over the decades. One Price works great when demand exceeds supply. When supply exceeds demand, forget about it. That's what Toyota ran into in Japan with their NETZ brand, then with Lexus. If you are interested in penetrating your market you need to be able to take cheap deals when that's all that is available. To achieve a reasonable average, you need fat deals to offset the skinny ones. Dealers I know dream about waking up one morning to discover all of their competitors went One Price.

 

[joe.pistell]

Automotive News published this article on June 8th - What are your thoughts?

"Roughly 300 dealers in the New York and Los Angeles metro areas will offer no-haggle pricing below sticker on their new-vehicle inventory this week, in a promotion organized by car shopping Web site Edmunds.com." says the article. And they go on to say, "Dealers who use Edmunds’ Price Promise offer up-front, no-haggle price guarantees over the Internet on new vehicles stocked in inventory, similar to up-front price guarantees offered by TrueCar. In an age when the vast majority of car shoppers do most of their car research and shopping online, such programs aim to give them the same level of price transparency they get through online retailers such as Amazon."

A big-city test for no-haggle pricing?

Anyone seen an update on this test?

 

[ruggles]

I am sure we would know if it was a success.... picture a metro dealer letting someone walk to preserve the integrity of One Price. Picture a dealer letting someone walk if the bank call wouldn't allow them to get to their One Price.

 

[ruggles]

Pretending to be No Haggle is just another strategy of negotiation.

 

[Scott Zagurski]

Lexus knows that luxury entry levels shoppers are a key to growth. They also heavily rely on repeat lease retention. Testing things in the hopes that they can refine consumer pain points and develop PR around it is a very smart move. It may not be as cool as a hover board but there is a real method to the madness here.

JC Penney rolled out fixed pricing after they were killed by Google when cheating for results. They were desperate.
Lexus is testing in a position of strength. It is a risk but just might be worth the reward.