Everyone is enamored by the Carvana & Vroom’s (www.carvana.com) (www.vroom.com) in the automotive space now. How are they any different?

This article points out some of things they are doing: https://www.fool.com/investing/2020/06/01/how-carvana-is-disrupting-the-used-car-industry.aspx

If you deal with automotive retailers daily like we do there is an inside look into the beast that is the automotive retail industry.

What are some of the expenses that can be reduced by current dealers if they move to a more “Online Model”?

  1. Optimizing Staff
    • Reducing or eliminating the commission structure of salespeople, finance managers could allow automotive retailers to reduce prices of vehicles, driving up demand/volume and making the difference up in volume.
      • Certain dealerships like Off Lease Only, CarMax & others have changed the commission model of salespeople and it has helped them rise above competition. (www.offleaseonly.com) (www.carmax.com)
  2. Showroom Expenses
    • Building huge showrooms may no longer be necessary to ensuring a great customer experience. Starbucks, Tesla and others have proved that it’s more about the experience customers have from purchase to delivery than the ambiance of the building. With recent stay at home orders this has come to light even more with delivery at home services being the thing that consumers are looking for.
    • Maybe putting more of that money into huge service facilities (for Franchised dealers) will make more sense? We understand the Franchise/OEM determine building specs but they will have to change or not have competitive franchisees.

In the article we mentioned above they point out that “The entire process is extremely easy and stress-free. Customers can search for cars, do virtual, 360-degree tours of the inside and outside, obtain financing from Carvana or a third party financial institution, and complete the entire purchase on the company’s website.” This is true but a lot of other retailers also have this function on their website. Our service https://www.cardata.us/spincar-360/ provides this Spin360 Exterior & Interior to any dealer looking to upgrade their inventory merchandising.

With some changes over the next 24 months we think classic automotive retailers like your neighborhood Chevrolet dealership can provide ALL of the services carvana does and compete. It may not be about competing on a national stage like everyone thinks, it may be more about the local dealers not allowing Carvana or others to compete on their turf.

If you are an automotive dealership looking to upgrade your marketing & merchandising please give us a call or go to www.cardata.usĀ