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.
Mark Mathis
Mark wrote his first direct-mail fundraising letter in 1981 for the University of Iowa Center for Advancement. The effort raised a few million dollars in undiscovered wills and legacy gifts. From that day forward Mark discovered a love of the big idea that moves the needle. After 12 years at KWWL, Mark became a business owner as a co-founder of ME&V — rebranded as AMPERAGE in 2015. After 25 years of leading creative teams in video production, graphic design, PR, writing and web development, Mark transitioned out of ownership in 2021. Today he serves in an employee role as special projects consultant. He is creatively ambidextrous — son of an artist and engineer — and famous for distilling complex ideas down to a few words and a few visuals. Mark is a writer. When he found that many nonprofits struggled with complex branding puzzles, he wrote the book, “NonProfit-NonMarketing .” He also wrote a novel called “Reenactment.” Mark is an active blogger OneMinuteMarketer® with nearly 1,000 readers each week on LinkedIn, Facebook, Twitter. One of his most popular YouTube videos is on “How to Look Good on Zoom.” One of Mark’s fondest business memories was being named to INC 500 two times and attending the INC 500 conference with other winners. Mark is considered by some a Civil War expert (and that explains his novel). Mark also served as an adjunct professor in the business and in the communications departments at Wartburg College. Mark is a graduate of the University of Iowa and is currently vice president of the University of Iowa Journalism and Mass Communications Advisory Board. Mark is married to state Sen. Liz Mathis, and the two love to travel, even when it means being trapped by a volcano in the Czech Republic for three weeks.
