Image Auto LLC
The Future of Automotive Sales
When I first joined the DrivingSales community, I posted about how the dealership model could become obsolete thanks to Amazon. Everyone pushed back saying that "Amazon won't sell cars", "Everyone wants to sell cars online, but they don't understand how hard it is", and "It's impossible to eliminate every point of friction online."
You're all right. Selling such a large asset online isn't perfect. But that wasn't the point.
Your dealership can still fail and it can still be Amazon's fault even if they never sell a single car.
Have you shopped on Amazon? It's awesome. You order something, it's cheaper than in most stores, and it's in your hands two days later. Add in their consistency and exceptional customer service and you've got a winning formula.
Point being: Amazon has completely changed consumer culture.
With a few keystrokes and a click, you can find exactly what you want at a price you're willing to pay. Retail giants tried to combat this with price matching, but Toys'R'Us still paid the price. Kindle opened the door into the tech space that eventually became Alexa; a device that tech giants like Apple and Google find themselves chasing. Amazon keeps pushing the bar and household names find themselves fighting to compete.
If dealerships are not ready to match this level of service, customers are going to find someone who will. Those resistant to change generally jump in arguing how Beepi and Vroom failed and Carvana reported losses last year. Well, good news...no one has figured out the formula yet. But let's stop acting like they won't.
The video above features a skit envisioning a car sale in the near-future. I think it's the most realistic option to online retailing. A customer starts a transaction online so once they show up on the lot, they have their trade appraised, conduct a test-drive, and they're done. It's not frictionless, but it's a lot more customer friendly than the current model.
It's time we start serving customers the way they want to be served. The current model of forcing them to do business our way has built the stigma of expecting a hassle at a dealership. Our friends over at DealerSuccess have a tool called VirtualDeal that is already bringing the bulk of the sales process online and their customers love it. Even better, the customers of their customers love it.
So...to summarize...why do customers hate giving up their information to get basic information? Because Amazon. Why do customers do so much research before they buy a product? Because Amazon. Why do customer reviews hold so much weight? Because Amazon.
They might not be selling cars, but they've certainly changed our culture. It's time we get ahead and figure out the formula for OUR industry before they do.
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10 Comments
Brandin Wilkinson
Woodworth Chrysler Dodge Jeep Ram Ltd.
Love this
Patrick Bergemann
Image Auto LLC
Thanks Brandin! Are there any practices you've implemented in your dealership to help accommodate the culture shift?
Brandin Wilkinson
Woodworth Chrysler Dodge Jeep Ram Ltd.
No problem Patrick, we share the same outlook on the future of auto sales. I founded a startup last fall that is projected to be launched in August this year that we believe is the solution to this inevitable reality. It's a win/win for the consumer and the dealer. There is an incredible amount of detail that goes into the website and app, we want to make sure we get it right. We're calling it BidzAuto.
Amanda Gordon
Self
Guys I just don't see it. There is no way you can do this with used cars and stats still show that most buyers prefer having the human element when making a purchase as large as this. Everyone is trying so darn hard to go virtual that we're missing the key factor to a sale, PEOPLE.
Brandin Wilkinson
Woodworth Chrysler Dodge Jeep Ram Ltd.
We're still incorporating the human element. We're leaving it up to the client to decide how much of the sales process they want to complete online, so we're leaving that decision on them. Stats also show that people want transparency, convenience, and a faster sales process. It's going to be a controversial subject until someone proves there is a winning formula, and as mentioned in the previous comment, we believe BidzAuto has that winning formula.
Patrick Bergemann
Image Auto LLC
Amanda, I agree that the human element is crucial. That's why I prefaced that "selling online" doesn't mean "click here to buy". It means adapting the process to meet the consumer needs.
If your salespeople are incredible that a customer would never get sick of dealing with them, I applaud you on your company culture. Ours is very similar. Customers love working with our techs because they're genuinely passionate about helping PEOPLE, not the specific type of work they do. But even with company culture like this, we still fight the stigma of the automotive world where in generations past salespeople would make a killing in marking up cars and mechanics used shady tactics to charge for work that didn't need to be done. Online transparency exposed this distrust and we find ourselves fighting to reassure people that we aren't any like that.
The stats show that 99% of shoppers expect a hassle, 87% dislike something about the process, 61% feel they're being taken advantage of, 52% feel anxious while at the dealership, and 75% would visit dealerships more if something about the process changed. While stats say that people want a human element, it doesn't mean they enjoy what they're currently being served.
The ideal process still involves a salesperson! But the salesperson should be focused on the customer's best interests and shopping experience, not the sale of the car. An online tool cutting out the busywork makes dealerships more efficient and shows value to the customer's time. It's the perfect marriage of technological convenience and a human element to serve the customer the way they want to be served.
Brandin...I love your mentality and I'm excited to see the things you put out. The tech sounds like the tool this industry needs.
Bart Wilson
DrivingSales
One of our DSES keynotes last year was David R Bell. He has a book titled Location is (Still) Everything and he makes a case for a brick and mortar establishment, but not in its current form. He suggests that customers prefer a more "boutique" type of shop, where they can interact with the product at their pace.
I think what we're all saying is that people prefer to shop their way, not our way. We need to provide opportunities, both online and off line, for customers to shop in a way they feel comfortable.
Patrick Bergemann
Image Auto LLC
I couldn't have said it better myself. Serve customers the way they want to be served.
Even if an online solution led to cutting time in the dealership for most customers, there's no reason that same dealership shouldn't have at least two team members available to help in a traditional sales fashion. To go 100% online would still be forcing people to shop our way, just a modernized version.
Kelly Kleinman
Dealership News
Hey Bart, location is everything, even on the SERPs! I was hoping for an ironic twist here, but what goes for a B&M location, goes for top ad positioning or organic page rank as well. I think the smart people do most of the posting here.
Kelly Kleinman
Dealership News
Patrick is my new BFF. Seriously. What Amazon did was cut through all of the layers of BS and said, "Here is a product guaranteed to be the cheapest price online, and you can have it tomorrow". They scrape the Internet every 20 mins or seconds (I forget) and if they find a lower price, they lower their price for the same product 2-5% from what I experienced. To filter sales from Amazon (hard to do) a business has to either have some absurd value add or GWP, that Amazon can't offer. WTS, Amazon's model of lowest price guarantee has too many holes in it to work with used cars since they are all essentially one-offs. My other new favorite Amanda is correct on this issue. I wish she'd let me interview her for my podcast.