‘I’m a franchised auto dealer. Why should I care about Digital Retailing?’Greg Kelly
The retail auto industry is undergoing the most rapid retail transformation in the history of the car business.
The information, data aggregation and retailing revolution age that transformed the world’s business landscape over the last decade has now arrived at the doorstep of the franchised auto dealer.
Companies such as Carvana, Vroom, CarMax, and Tesla, to name a few, were once thought to be outliers that would never change or impact the car business. But, in short order have directly become engrained in the retailing landscape.
Just take a quick look at Tesla – deliveries reached 241,391 globally through the 3rd quarter of 2021 and have a market value of one trillion – wow! Tesla’s desire to migrate to an OEM direct-to-consumer new vehicle retailing model has already started to forever change the industry.
Now consider the pandemic – dealerships had no choice but to accept the realities of the online model – in fact, within just a few short months the smart dealers had to re-tool their processes overnight. Yet, there are still those dealers who really don’t feel there is anything to be concerned about and are in sheer denial of the obvious.
Now consider all of the OEMS trying to catch up with Tesla not only with product but with sales process also! Several OEMS are experimenting with a tier 1 to tier 3 model but, unlike Tesla all of the traditional brands have a dealer body and well-established franchise laws that protect them. Given some states are better than others in protecting the historical retail model.
Lastly, we must consider the buyer. The younger generation will not put up with the control tactics used for decades. They no longer work 80 hours a week and will no longer endure a 5- to 6-hour marathon buying process and the lack of online accessibility. They not only don’t want to negotiate any longer many don’t even want to talk to another human being- instead they prefer online communication.
Today’s buyer demand a user-driven engagement process. This is one of the realities that Tesla has taken advantage of and a key reason to their success.
So now what? Moving forward, the successful retailers of the future will recognize this vast vin-process process and consumer desire, embrace the change and modify their engagement and retailing options. This is why we created WebBuy. It provides a platform for a dealer to give this demographic exactly what they’ve been clamoring for: a web-based solution that gives the end-user and app and allows them the control of their experience and at the same time enhances dealer profitability.
Recognizing the strengths of Caravan, Tesla and others is the first step at winning the game of vehicle retailing. You’re competing not just in the venue of vehicle attributes/style/price, but the most important vertical of all: the engagement process.
You see, the world has changed, whether we like it or not. The successful dealers of the future will be the same as the successful dealers of the past. Entrepreneurial, risk-taking visionaries who embrace change in their business model and understand that the only constant in our industry is that change, and our reaction to it, will always be the one true differentiator between mediocrity and sustained and genuine success.