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Jared Hamilton
From: Jared Hamilton
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Joe Orr

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Wall Street Versus Your Dealership - Are We At War and Don't Even Know It?

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An aspiring actress was planning a cross country move from New York to California to pursue her acting career and wanted to work as an Uber driver between auditions. This, of course, necessitated a reliable vehicle - something that she did not need in New York. She had heard of an online used car buying platform, Beepi, but wasn’t exactly sure if she should trust such a big purchase for a vehicle sight unseen. However, their 10 day/1,000 mile guarantee established enough trust for her to proceed. When she found a 2012 Toyota Corolla with 12,400 miles on the odometer and within her budget, she was interested. She went to her local Toyota dealer that had a similar vehicle in stock, took a test drive and left without giving the sales staff an opportunity to make a sale. A visit back to Beepi’s website and a few clicks and her vehicle was on it’s way to her door. This story, recently told by the Los Angeles Times, is becoming a more frequent one as start-ups attempt to transform the car buying process into one that’s more convenient and consumer friendly. And they have some big money betting that their business models will take off.

 

Since the explosion of the Amazons and Zappos’ of the world, customers have forced retailers to transform the shopping experience. Nobody can argue that Amazon continues to revolutionize and grow by doing the one thing that makes it successful – offering a more convenient platform for people to buy from. Amazon did not get to where it is today by making it difficult for people to do business with them, they did it by making it easier, faster and more convenient. It wasn’t that long ago that if you wanted to purchase a book, you had to trudge down to the local bookstore and hope they had it in stock. Now, in some markets, Amazon will deliver it to your door within an hour… along with your groceries, the latest movies and just about anything else you could want. And consumers love it.

 

Just about every automotive vendor’s service or product is designed at the core to do one simple thing - make someone’s life easier. Whether that’s the widget on your website that allows customers to get their own trade-in value;  a chat service that enables customers to communicate with you instantly without picking up the phone; or the many technologies that make dealerships more efficient, these tools all seek to create a better and easier buying experience for consumers. However, for many consumers, that’s not enough. They want an easy button.

 

I doubt many would argue with me when I say that the consumer perception of the process for buying a car is poor. Certainly those experiences vary from dealer to dealer. But the basic steps of our in-dealership processes remain the same - find needs/wants, test drive, proposal, finance, delivery. It’s only the execution of these processes that perhaps differ dealership to dealership. In the Beepi story, the car shopper did visit a dealership, but only to test drive a vehicle similar to the one she’d already seen on the Internet. That was all she needed to make the buying decision. The website took care of the rest. Imagine if she had been able to accomplish the same thing on the dealer’s website and only had to come in to test drive the vehicle. That’s exactly what she did. The only difference being that she purchased from Beepi instead of the dealer.

 

Many dealers are paying close attention to such start-ups. Used car sales start-up Vroom has closed investment rounds with capital from investors that include John Elway and former AutoNation CEO Steve Berrard. While another site, Carvana, is backed by auto retailer DriveTime, a company with over $1 billion in revenue that specializes in selling and financing used vehicles to consumers with challenged credit.

 

At some point, a tipping point will be reached for start-to-finish online car buying transactions. These start-ups prove that there is consumer demand for this type of buying experience and the technology is already available to do it.

 

I strongly believe it is time to embrace the trend and take steps to provide your customers with an easy button -- then perhaps you’ll find that they choose you rather than your online - and very real - virtual competition.

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