Digital Dealer
By Peter Brandow
I want to give you one thing here today a feeling of what the Internet is all about. I think this is important because we are all dealers and we live in the gut reaction world, not some academic classroom. We live with what's current and what's hot; what we can get at the auction this week and what dealers are dumping that might be next week's value. So while a lot of folks are studying where the Internet might be in 2004, I'm just swimming like hell each week to stay just ahead of the wave, not months ahead, just "ahead".
It seems that most of the articles I read these days view the Net as if it had a will or perhaps even an army of its own; as if the cyber world were staffed with a legion of nether beings that are poised to cast a dark spell upon the retailers of America. Those who believe this view foresee the Internet forcing our industry to act against its own interest and in favor of its most selfish consumer simply because some cyber shoppers will be smart, mobile and short-fused. They broadcast that, oh yes, today's shoppers are armed with "insider" information about our comings and goings, our costs and prices and along with it, they will know the precise location of the weakest link in the chain that holds our evil capitalistic empires together. Customers today are being likened to the Contras who are being fed cutting edge weapons with which to defeat those sitting in power.
Recently, an article in PC Magazine took on the topic of car wars on the world wide web. The story was a "me too" in that long line of articles that predict that the Net is about to force lower prices and better availability on all of our hottest products; the Net is a minute away from eliminating the whole lot of us dealers with our "middle-man" cost bulge; the Net is going to insure that customers finally get it their way, a penny or two more than free, unlimited guarantees, with delivery to their doorstep a day after the order is placed.
This article goes on to suggests a new weapon in the cyber arsenal of terror, predicting that a few mega manufacturers might conspire to monopolize the best products and by controlling their distribution, they will ultimately side step the dealers and outsmart the consumers all in one fell swoop.
This is bunk. That's right, bunk. It just ain't gonna happen. No way, no how.
Truth be known , the tsunami that is shaking up our retail world is simply the boost that good old fashioned free enterprise is getting from information technologies. This shake up is not a new "Cyber" phenomenon. It's been a few thousand years since the first merchant angled for someone else's customers by offering a credible product comparison and maybe the hint of better pricing. It's been decades that car shoppers were offered invoice pricing information and standardized pricing labels all at the local bookstore. Information creates a more efficient, tougher marketplace, but the auto industry has never been easy.
The question at hand is less about the newness of easy, accurate, complete comparative product information. The net offers a solution of how to attract customers and keep them once they arrive. The heart of this answer lies in knowing what today's customers are all about.
The Internet is simply another communication tool. A better balanced hammer, if you will, with which we might drive a marketing nail more efficiently. But the hammer, no matter how well designed, does not create the nail nor does the nail create the wall into which to drive itself.
The new cyber space, while techno enabled, is driven by a generation-long passion among North American consumers for automotive retail change. Our first national shove into this reality came when the Journal reported that many car buyers liken car buying to the discomfort of root canal. This and the bulk of retail images over the past 50 years have peppered our inner voice with a lifetime of marketing scars that have pushed every savvy consumer to demand to have it their way or forever live with the shame of a cosmic kick me sign on their back. Retail has come to mean rip-off. We have all been brought up praying to the god of discounts and inside deals which we collectively salute a national banner that proclaims "the customer is always right." This has spawned new age patrons that are smart, mobile and short-fused. Not armed and dangerous but, smart, mobile and short-fused. Madison Avenue has honed our attitudes with images of who should be in the driver's seat- the buyer. While most of it has been more patronizing than sincere, we were weaned on images of women who have come a long way, baby, to earn their own feminine tobacco products and of men who walk past the burgers with secret sauce to arrive at the counter of those who might hold the lettuce and add an extra pickle if that's our preference.
So strongly do today's American consumers now identify "control of the process" with "smart shopping" and "great service" that they might just push past "price and selection" in pursuit of it. So intoxicating is the experience of "control" that as much as a third of those consumers may just accept second or third choice products to have it.
But there is a catch and it is a big one. To give consumers control, manufacturers or retailers must give up control. They must respect that consumers are self-directed, not owned. And this is no small issue.
The struggle over who owns the customer is at the heart of the cyber wars between retailers and manufacturers. That whole debate supposes that one or the other, in fact owns that consumer, controls the consumer. If they do, then the customer is not in control and the resultant strategies will show the consumer this bias. When we demand that customers commit first, when we "roof the keys," when we force the customer into our showrooms because "we can't deliver a car over the phone," we demonstrate who we think is in control. These are the battlegrounds and these are the opportunities.
Ford's Blue Oval, GM's Retail dot.com, and the parade of Greenlight, AOL direct and other third party wanna be's are all dancing around Wall Street like a bunch of can-can dancers looking to be discovered for their new attitudes. They are all wooing the Street with peek-a-boo glimpses of what they might do with the customer if they could only build a new relationship; if they could only sell directly.
In the meantime, as dealers and manufactures fight for that control, there will continue to be a great opportunity for a few of us to sell cars on the web. So I'm here to tell you that another year has gone by and I'm still poaching territory and selling cars on the web. I am quietly getting more than my fair share today, while others battle out the future of the industry.
One quick aside, I urge you to log on and request brochures from those manufactures and third parties that want to sell direct, just to check out their "delivery" skill as a very non-scientific test of whether they are closing in on the day when they're likely to sell directly to customers. They can't get the right brochure to you inside of a month, so have little fear that they have anything new under their skirts.
They may worship Michael Dell's "build to order" process, but they just don't seem to be able to stop at what the customer wants. It's not the inability to find out what the demand is, we've told them that for years. They just can't control their line speed to stop between orders. They need dealers to sell all the stuff that doesn't sell easily and the "too much" of what they have. They need us to unload the trade-ins and to hold the hands of those whose credit isn't quite perfect. Trust me, dealers will continue to be necessary throughout the coming years, if for no other reason, to bail them out of the junk they continue to overbuild and to satisfy the customers that don't behave according to the manufacturer's vision of them.
Dealers continue to be the cheapest and most efficient way to distribute all the product while maintaining any kind of customer relationship during the process. If the universe were just a couple of Hondas, a few Toyotas, a PT cruiser and a C class Mercedes or two, then the manufacturers could all of the sudden become "just in time," "build to order," "internet direct" geniuses. Until then, we'll keep on moving the metal.
The toughest question is where to focus today; how to keep abreast of the important aspects of this IT, information technology, juggernaut that is growing in our midst.
I thought about starting this talk on connectivity and the tremendous advantages of big pipes, FAT technologies, fast baud rates and web TV. I might have told you about a company called Blue Tooth and we could have marveled at their vision of wireless applications. Or I might have dropped down a few thousand feet to talk about WITs, Palm Pilots, and satellites using Hughes and GM as our visionary icon of the advantage of the satellite dominance in cellular telephony.
Hovering just above ground we might have cut into the lead generators like Autobytel, and Autovantage and their world that seems to be floundering as evidenced by its need to pander to the public with free give-aways to drive traffic. Cheap deals and naked cost information don't seem to be enough, the public now gets all that and a chance to win a free house just for tuning in.
But, even though these topics create interesting barroom chatter, as a dealer I need to know about customer habits at ground zero. I need to stay on top of what makes a customer buy versus continue to shop; what the buyer's expectations are and where they are going. In a dealer's world, technology is merely the tool with which we satisfy the customer. Think again about owning the best hammer in the world and whether you'd know where to drive the nail.
Peter Brandow, nationally known for C.A.R.S. (Cyber Auto Retailer' s Success) e-commerce seminars, is one of the top five Internet new car dealers in the country. He is the dealer of the Brandow dealerships, the national dealer technology chair of e-GM, a board member of NADA's IT committee, and an attorney in Pennsylvania. pbrandow@dealeronline.com
