Is the Car Sales Business Driving Toward Disruption?
I bought a new, used car and I have to say, I was disappointed. I haven’t purchased a car at a dealership for more than eight years, and not a lot has changed. So that had me wondering: Is digital going to disrupt this industry, just like it has everyone else?
In quick research, I found the disruptor of all disruptors — AMAZON. Yes, Amazon is still planning to enter the car selling and buying process. The e-commerce giant has a track record of dominating nearly every vertical it expands into. Dealers may be part of the process, but we know Amazon quickly cuts out the nonefficient parts. (UPS, FedEx and USPS know what I mean. Are you seeing more Amazon vans lately?)
Carvana seems to be the model that offers the most disruption. You can sell your car and buy a car online. Plus, Carvana will pick up your old car and deliver a new one right to your home. No four to five hours of negotiating. All paperwork is done online. In fact, in 2020, Carvana sold nearly 250,000 vehicles and posted annual revenues of $5.6 billion. That makes it the second-largest used-car retailer in the U.S. Carvana’s first quarter sales of 2021 were dramatically up year over year (76% increase in units sold, 104% increase in revenue and 145% increase in total gross profit).
We are all demanding digital-first experiences, no matter the product or service. Here are a couple of ideas for the auto industry:
- Improve online web experience. Make it more user-focused and friendly.
- Take better photos of cars and trucks. Many vehicles have black interiors that need lighting.
- Add video tours with a tour guide of cars. Show off benefits and features. Explain all the electronics.
- Provide more detailed information. Use charts and graphs to compare cars. I bought a wallet online that had more information than what was included about my used car.
- End the car pricing game. Post it. We don’t care about “today’s price.” What is my price?
- Make it more fun. Carvana has a car vending machine to attract young drivers. “Spooktacular” sales with coffee, balloons and hot dogs are not fun.
- Understand the digital journey. Let the slick negotiators go and bring on people who know the vehicles, good customer service and provide a great experience.
Not all car buyers are going to go online to buy a car. Test driving is still a dealership advantage. Yet clinging to a status quo delivers a ho-hum experience. Speed thrills and attracts new customers. Online has the acceleration game down.
I’m hoping to buy my next car 100% online and have my new electric car drive itself to my house.
Mark Mathis III is chief creative & strategy officer, partner and cofounder of AMPERAGE Marketing & Fundraising.