The recently concluded Auto Retailing on the Web Conference held in Las Vegas pointed to some significant gains in the level of sophistication with which auto dealers are approaching this new marketing medium. Attendance at the conference exceeded 400 automobile dealers, dealership managers, and manufacturers and related industry representatives (60+% dealership personnel). The first Auto Retailing on the Web Conference held in Nashville last November drew 220 attendees. In contrast to the Nashville conference, many of the dealers who gathered in Las Vegas showed that they have gotten beyond the basics, are beginning to master the new medium, and are now reaping profits from their on-line sales.
Doris Ehlers of J.D. Power and Associates presented the results of a recent study of Internet automotive retailing. The study revealed an important shift in consumer behavior over the last 12 months. At the Nashville conference, dealership attendees described their Web customers as "grinders," bent on buying a car for the lowest possible price. According to Ms. Ehlers, however, Internet car shoppers are driven more by a need for information and convenience, although price remains a strong motivator, to be sure.
The J.D. Power and Associates findings seemed to be confirmed by anecdotes from Las Vegas conference attendees. They described customers who come into the showroom armed with lots of information but are most interested in buying a vehicle at what they perceive to be a "fair" price. As a result, dealers and dealership managers reported that their gross profits are beginning to stabilize with grosses on Internet sales running only slightly behind profits from conventional sources.
Perhaps the most striking difference between the first and second conferences was the change in attitude toward the third-party referral services. While some dealers say they have never used an outside service and don't plan to, they were clearly in the minority. Most dealers continue to use one or more of these referral sources.
The enthusiastic response of the conference participants and the growth in attendance between the Nashville and Las Vegas gatherings has prompted conference organizer WD&S Publishing, Metuchen, New Jersey, to accelerate plans for a third conference at an east coast site this fall.
Mike Bowers is Managing Editor of WD&S Publishing, Metuchen, New Jersey, producers of the industry publications Auto Retailing on the Web, Dealer's Edge, Warranty Dollars & Sense, Fixed Coverage, and The Parts Manager. If you have specific questions or require more information about this subject, please check the appropriate box on the reader response form on page 3. mbowers@dealeronline.com