"Disruption" is one of those Silicon Valley buzzwords that I've begun to grow tired of. It's a catch-all word that is used anytime an industry or product is experiencing changes or pop up competition. Perhaps more accurately, we should see terms such as "evolving,” or “maturing.” More simply stated, what many industries or products are experiencing is just new competition.

In automotive, there is a history of disruptors that fundamentally change or alter a maturing market. Remember the minivan craze of the 90s? It was followed by the crossover phase and disrupted the wagon segment to such a degree they almost went extinct, at least in North America.

Now going into 2020, we are seeing the disruption in both segments and distribution. Companies like Tesla are disrupting with fully electric cars that are distributed through a direct sales model. Companies like Vroom and Carvana are offering full digital retailing online, from start to finish with a delivery of the car to your driveway. Yet, these companies have not experienced an “amazon-like” transformation and are still very niche players. Why is that?

Another industry that is experiencing this same kind of disruption is the grocery industry. While stores changed continuously and evolved to keep up with customer trends and tastes over the years, one principal of the business transaction remained constant for decades: People had to come to them to get fresh food and produce.

With companies like Peapod and Amazon Fresh, combined with more meal prep-orientated services like Blue Apron and HelloFresh, that is all changing. Direct to consumers, some with discounted or even free shipping, these services are endangering the rock-solid model of people going to their favorite supermarket for food staples. Is the traditional industry doomed? No, at least not for the ones embracing the competition. Let me explain.

When faced with the prospect of consumers able to shop online for their most common groceries, the incumbent stalwarts of the grocery world (Think Kroger, Safeway, Publix, etc.) have a choice to make when fighting to keep their market share against the online disruptors. My local grocer of choice, Meijer, decided to partner with Shipt to make home delivery from online shopping available.

App-based shopping, with nearly all of the same products and staples you're familiar with at the physical location available for same-day shipping. And for some, within the hour. Instead of fighting against the new model, grocery stores decided to participate. Meijer is certainly not alone, many major chain grocers are now adopting a "we shop for you, and ship for you" model. They also have a great hybrid solution where you purchase your items online, and a store shopper selects all your products for you. Then all you need to do is visit a curbside pickup at the physical store and collect your items, saving you from even having to enter the store. They took the opportunity of the new online model not just as a threat alone, but as a challenge to innovate their business model for evolving consumer shopping behavior.

This got me thinking. Why is it that when I talk to dealers and salespeople in the industry, they deride the online digital retailers like Carvana and Vroom? Why do they insist it's a passing fad or dismiss their importance altogether? For years, I have heard dealers tell me, "Oh sure, salesperson Johnny could do an at-home test drive, we'll gladly go to a customer's house to have them look at a car." 

However, the reality is that it never happens. Or, if it does, it is supremely rare. Taking any piece of the consumer transaction away from the dealership is frowned upon, no matter what. This usually comes at the direction of management.

Perhaps it’s the power dynamic that makes dealers uncomfortable. When a customer is in your dealership, they are on your turf, your zone. That can be intimidating for some customers, no matter how comfortable or relaxed going your sales staff is. Perhaps dealers like dictating the way the sales process will go on their home court. Now it’s just salesperson Johnny and me in my driveway, there is no more of the walled office of intimidation. There is no more, "ok, let me run that by the manager while I hide from you, and we talk about you behind your back." Also, there has to be a ton of accountability on Johnny that he won't just give the car away for a song, and his sales manager is not there to hover over his shoulder to approve every pencil and sales move that he makes.

Its accountability that many dealers don't have with their staff or actively don't want. There is no finance office pressure. The upselling of finance products has to be pre-selected or presented, it's no longer in the boiler room of F&I pros, it's a driveway chat with checkboxes that need to be presented. The motivation to sell is in a different environment. I’ve bought several cars over the past four years from established franchised dealers and independent used car lots, luxury cars and economy cars. The experience was the same. Not once was it ever presented as a possibility that they would or could come to me.

Why does the automotive world insist that customers who desire to complete their purchase online, or from the comfort and familiarity of their home, must be forced to visit the dealership?

Perhaps this is why the majority of people still hold the opinion that buying a car is high on their list of stress-inducing and disliked activities. There will always be those who remain traditional, both those who prefer buying products in-store and those who like buying automobiles direct from a dealer.

However, it’s the growing segment of the market that prefers a digital experience which the automotive industry can learn from. How about meeting consumer behavior changes the way grocery stores did? By not rejecting the disruptor model but embracing it.

Dealers have the inventory; they CAN do this. The question is, do they want to? Many people I have talked to are still uncomfortable with completing their purchase without first seeing what they are buying in person. Especially something as expensive and vital as their car. I would love to see dealers begin to promote and market home delivery and online shopping. Let’s make that process easier. If we do not, the market will speak and slowly keep chipping away at established dealerships selling in the traditional model, in favor of those who can evolve with the way consumers want to transact business, increasingly online.

Do you agree with me? How many of you out there have tried one of these online grocery shopping services? Was it a good experience? Has anyone ever had a dealer come to their house to sell them a car? Let me know in the comments below.

"Back to the Future" is a fantastic film franchise. I'm just going to put my bias for it right out there from the get-go. I’m not sure about you, but I am particularly fond of 1980s science fiction movies. The 1985 classic was visionary, and the sequel where they go 30 years into the future is shockingly accurate with its technology predictions. It predicted things like wearable tech, delivery drones, video calling, and I would even argue it’s relevant enough in 2019 to have predicted ironically cool 1990s fashions making a comeback! (Bruh, you see Marty's rad hologram hat, and Nike Mag kicks! Dude's been on fleek for like, 35 years). I basically used Google to translate Millennial for that sentence.

So ok, we get it, but what does this have to do with automobile retailing and digital marketing in 2019? I use this film as an example to highlight how, in numerous ways, retailing automobiles is stuck in 1985 and not 2015. I’m not here to lecture this unoriginal and tired criticism of the industry that is not even true. Yet, another industry I brought up in my first post (link) has been accused of it as well, Real Estate. However, in my opinion, that industry has seemingly embraced the “future” better than we (auto industry dealers) have. Allow me some contextual examples:

Buying a home and buying a car have so much in common. I'm frankly shocked the big auto groups don’t sell houses, and Century 21 doesn’t sell SUVs. They are both without a doubt, the two most significant purchases that the vast majority of people will ever buy. They both cannot be purchased in 1-click, despite the incessant Silicon Valley prognosticators insisting they "should" be or "could" be in the future. They both involve financing frequently; they both have limited inventory relevant only to geo constraints of the potential buyer. Even shopping for the two is nearly identical. The user experience of Realtor.com is not radically different than that of a major auto dealer’s site, down to the filtering, display pages, photos/videos, etc. However, after you find what you’re looking for, that is where the two differ.

I have recently gone through the process of buying cars, homes, and financing for those items, and I can tell you the two could not be more different. The following were the three most significant differences I noticed between buying real estate and buying a car.

Less Paperwork

There is much less "paper" in the paperwork. Let me explain. In the past, buying a home involved milling a couple of California redwoods worth of paper to go through the necessary disclosures, agreements, and signature pages. As comedian Jim Gaffigan eloquently put it, why does it take 500 pages of paper to convey to you that I will owe you money for the rest of my life!" Joking aside, the industry picked up on this and began utilizing technology and software like DocuSign to take this process electronic, saving trees, saving time, and the need for me to be physically present at every signing. It makes the process so much faster and easier. The closing of my most recent home took the same amount of time as the last car I bought off a used car lot, for cash! Let that soak in for a second. It was basically signing a check and a title. The excuses for a 3-hour trip to finalize your car purchases run thin considering a real estate transaction can be much more complicated.

Financing

Financing has come a long way, and the experience is changing radically. Innovative products such as Rocket Mortgage from Quicken are taking the process of applying for credit from a tense sit down with a suit in a fancy bank building to something as simple and non-threatening as filling out essential questions from your smartphone. This, too, is coupled with the DocuSign from above even if you go the traditional, non-smartphone route. Decisions are made quickly, and again, the consumer does not have to sit and wait at the realtor's office while banks compete for your loan, as they do currently in a dealership. They do it on their time, and most likely from home. Starting to see the trend here?

No Video Tour

Speaking only to my personal experience of several homes and dozens of cars I've shopped the past few years, I have only ever once received a video tour of a vehicle I was interested in. Once! As a consultant, process specialist, and digital marketer, I have been preaching this for the last decade since smartphones made this process essentially seamless. That same salesperson will check Instagram 20 times and create five snapchats to their friends, but can't send a 30-second walkaround of a car? Yet, when I was shopping for a home in a different state and was unable to be present for every showing I would have liked, I got several personalized 30 MINUTE plus Facetime walkthroughs, drone video property overviews, personalized high-resolution photos that were not just the inventory photos. And I received customized digital inventory sent directly to me each week that matched my exact search criteria. Welcome to the 21st century, and buying a home is 2015, not 1985 (keeping up with the Back to the Future theme).

So, what’s my point? Auto dealers I have talked to often bemoan the time, costs, effort, and investment they have to deal with in order to incorporate these items, always claiming the ROI is not there. I could not disagree more. Real estate has picked up on the fact that the consumer wants to complete their buying decision before they even step foot in a house or apartment. The final visit should be final, or at least down to 1 or 2. Having quality photos, videos, and information sells homes, ask any good realtor.

Similarly, a dealer investing in a 360-degree turntable studio on their property will sell more cars. A dealer spending time and money doing drone videos of their amazing property and how easy it is to get to will get people to show up. A custom video walkthrough of their clean and professional service departments will put independents to shame. Sending customers customized lists of inventory matching desired attributes will keep them engaged with you and not the next dealer in the aggregator list. This is NOT Rocket Science. Its Real Estate.

We don't have to look to Amazon, Apple, or Google to think of ways to innovate our technology; we can look to real estate’s transformation. Last I checked, there is no iHouse on iLand you can buy in a click, or a Google apartment ready for rent. It’s true, on Amazon, you can purchase prefabricated modular micro-housing with a couple of clicks, but you still can't buy the land to put it on or have electrical or plumbing with it, so good luck with that. Buying a house will always be in the realm of people helping people, and so will buying a car.

Can your dealership start implementing things like electronic documentation, quick click financing, personalized video conferencing, and the highest quality inventory imaging? If so, I think we can begin to break the stigma of being stuck in the past and get our industry to the future.

Now, who can get me in touch with a dealer that has a clean, low mileage, DeLorean?