How will the Internet effect brick & mortar dealerships?

Philip Zelinger
Online transaction applications, self serve consumer desking tools, direct lender sourced credit applications and payment calculators, transparent product and price disclosures, linked information resources like Kelley Blue Book, market wide inventories posted online, limited personal communications replaced by video conference conversion tools that provide little time or need to develop relationships before, during and after the sale - and the list goes on. All of these Internet based applications exist today with more robust versions already in beta versions and ongoing A-B tests with major dealer groups and OEM's. The human element is an assumed requirement in selling a vehicle based on consumer acceptance of the Internet as it was - and maybe as it is - but what about how it will be in the eyes of the next generation that is being weaned online with the expanded bandwidth that is allowing more functional applications! OEM's have already tried to eliminate the dealer franchise system but they have bee
Jared Hamilton
I think over time we will see more and more dealers reduce their expensive frontage realestate for smaller store fronts and storage warehouses... or simply virtual stores. At least in the foreseeable future manufacturers will have dealers, I dont see that changing, but I do see the nature of dealers changing. I think manufacturers will offer some form of "virtual" franchises, loosening their real estate requirements. For now I think the down turn is helping dealers adopt to the efficiencies of the web. Unfortunately the adoption its more out of a heavy hand... but one thing is for sure. Dealers are losing the weight of the traditional marketing and embracing the efficiencies of the web to weather the storm happening now. ive rambled enought.
Larry Schlagheck
As was mentioned, much depends on the economy. If we continue to see dropping sales these moves will come more quickly. A healthy economy often breeds complacency. Why make changes to the business model if everyone is fat and happy? Physically, I'd like to believe that we'll see the footprint of dealerships shrink, but every new dealership I see still has acres of asphalt. And, with a suggish economy many existing dealers can't afford to sell off a piece of their property due to low demand and weakness in market prices.
Philip Zelinger
It is interesting how your replies focused on the real estate asset, and the need to free up working capital in a struggling economy, as the impetus for the change from the real to the virtual showroom from the dealer's perspective. Similarly, the margins in retail sales have been dwindling ever since the Internet placed vendors and third party resource sites - including the O.E.M's - between the consumer and the dealer but few online forums seem to recognize that aspect of the business plan that suggests the transition from real to the virtual world as the catalyst to change the retail distribution system in the american auto industry. My compliments to the obviously more astute participants in DrivingSales.Com for the depth of your understanding of the true nature of the car business - follow the money honey! I for one anticipate a short term rental agreement with a conversion to a long term purchase contract as the next step to accomodating an online shopper who is still hesitant to be a buyer so I have

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