It would be nice to stir up the conversation with dealer's and industry expert's impressions on where they think the Internet market is heading.
Passing fad?
A must-use medium?
Still in it's infancy or has the bubble burst?
Thanks-
Michael
------------------
www.puredealer.com
Where is the Internet heading?
6 posts
• Page 1 of 1
Where is the Internet heading?
by EFConn » Sun Mar 24, 2002 2:18 pm
It is tough to say, but on the OEM side, Internet-based Locate to Order and Build to Order programs will grow to about 20% of New Vehicle sales over the next 10 years. Dealers will still be in control of the Delivery point, but they will not need to stock as much inventory.
Also, the mega-dealer chains are going to aggressively drive into Internet commodity selling of new vehicles equal to over 10% of all new sales within 10 years.
Autonation stores and AutoVantage.com will aggressively get into Internet based User Car sales with some New Car impact as well. The other "consortium" of UAG, Ashbury, Sonic and Carsdirect.com will aggressively sell new cars online as a commodity.
This mega-dealer Internet model is a concern could cause OEM's to lose money and also force smaller Dealers out of business unless some actions by OEMs or NADA is taken, but that is the nature of the Information Age and laws of economics.
These are just my thoughts, it will be exciting to watch to say the least.
Also, the mega-dealer chains are going to aggressively drive into Internet commodity selling of new vehicles equal to over 10% of all new sales within 10 years.
Autonation stores and AutoVantage.com will aggressively get into Internet based User Car sales with some New Car impact as well. The other "consortium" of UAG, Ashbury, Sonic and Carsdirect.com will aggressively sell new cars online as a commodity.
This mega-dealer Internet model is a concern could cause OEM's to lose money and also force smaller Dealers out of business unless some actions by OEMs or NADA is taken, but that is the nature of the Information Age and laws of economics.
These are just my thoughts, it will be exciting to watch to say the least.
- EFConn
Where is the Internet heading?
by Matt Parsons » Mon Mar 25, 2002 7:37 am
On March 19th we (EDS) released the results of our 4th Annual Dealer IT Survey. The survey explores dealers attitudes about the Internet and the use of IT in automotive retailing. Copies of the survey results can be accessed at www.edsarg.com on the main menu. If you download the survey and view it in 'Notes' view, you will see the associated 'script' that includes our interpretation of the data.
At the Press Briefing we also had a panel of dealers to discuss the results. The panel included Wes Lutz, Dealer Principal and Chairman of the NADA IT Committee, Spencer Hondros, Dealer Principal and Chairman of the GM Dealer IT Council, and Mark Rush, General Manager and member of the NADA IT Committee. The event was taped which included some very intersting comments and observations from the dealers. If you would like a copy of the tape, please email Bill Drewes at Bill.Drewes@eds.com with your name and address and he will send you a copy.
At the Press Briefing we also had a panel of dealers to discuss the results. The panel included Wes Lutz, Dealer Principal and Chairman of the NADA IT Committee, Spencer Hondros, Dealer Principal and Chairman of the GM Dealer IT Council, and Mark Rush, General Manager and member of the NADA IT Committee. The event was taped which included some very intersting comments and observations from the dealers. If you would like a copy of the tape, please email Bill Drewes at Bill.Drewes@eds.com with your name and address and he will send you a copy.
- Matt Parsons
Where is the Internet heading?
by sallen1 » Tue Mar 26, 2002 8:33 am
This is more fundamental take on the internet vs. 'retailing' or dot-coms pushing the small dealer out-of-business. My attitude towards retailing hasn't changed: You succeed in business by taking care of your employees and your customers.
I don't think the internet is a passing fad and it has become a must use medium in some respects. Perhaps the 'bubble burst' really applies to those who tried to expliot the technology prior to it becoming a business neccesity, let me explain.
Here's a story about 'communication technology' with some similarities to the implementation of the internet.
I've got two dealerships, one built in 1946 and the other in 1966. Quite ancient by contemporary measures but think about the technology available at the time of construction: telephones. In the old store (1946) the telephone was relatively new and used only in a few offices. We even had our own PBX with wires to connect the calls. I'm sure it was expensive but invaluable. And how many people had phones in their homes in 1946? (or televisions, either).
When the 'new' store was built, phones were cheap and were put everywhere. Most homes had telephones and it became a must-have method to communicate.
Because phones were expensive in 1946 an intercom system was installed to communicate within the store. By 1966 it was cheaper to use telephones instead of the intercom. Result: we broadened the use of technology when it became financially feasible AND it solved a business problem.
If it wasn't for the NEED to communicate with the employees, we'd not demanded a rohbust phone system. Today, we have the stores linked by a private T1 network for voice, data, voice-mail, etc.
Now for the internet...
About 10 years ago it became apparent that a new form of communication was on the horizon. Some of us had experience with the 'net via e-mail, compuserve, etc. and the proliferation of this technology was limited by cost of equipment and the connection to handle the traffic (like telephone technology in 1946). Much faster than the 20 years of the telephone story, we are able to field personal computers to just about everyone at the dealership for $150 each (cheaper than the phone units in some cases!) and connect them with a high-speed data network. But is there demand for this expense?
There is for us. Our mfg (GM) has put almost everything they do on a website somewhere: gm-dealerworld does alot of stuff (bulletins, VIS lookups, incentives, lease programs, parts locators) and providing access to these tools has been important to getting our job done. I'm also able to communicate to my managers (or the factory) via e-mail and that is much more time-convenient.
What about selling stuff on a web-site? We keep our site pretty fresh, load inventory info (although gmbuypower is rather accurate for new cars), provide helper sections, answer questions, etc. I'd say we sell some cars but not as 'directly' as others, we like to have people come to the store. Just like a phone call: when someone calls we try to get them to visit the store.
In the '40s we'd advertise our phone number as 'sycamore 95203' where sycamore was the local exchange. Today we advertise a toll-free number AND the web address.
Think of the issue this way: Could you survive in business today without a telephone? Hardly. Has the internet provided the same 'revolution' in business as the phone provided in 1946? Not yet, but it will.
scott
I don't think the internet is a passing fad and it has become a must use medium in some respects. Perhaps the 'bubble burst' really applies to those who tried to expliot the technology prior to it becoming a business neccesity, let me explain.
Here's a story about 'communication technology' with some similarities to the implementation of the internet.
I've got two dealerships, one built in 1946 and the other in 1966. Quite ancient by contemporary measures but think about the technology available at the time of construction: telephones. In the old store (1946) the telephone was relatively new and used only in a few offices. We even had our own PBX with wires to connect the calls. I'm sure it was expensive but invaluable. And how many people had phones in their homes in 1946? (or televisions, either).
When the 'new' store was built, phones were cheap and were put everywhere. Most homes had telephones and it became a must-have method to communicate.
Because phones were expensive in 1946 an intercom system was installed to communicate within the store. By 1966 it was cheaper to use telephones instead of the intercom. Result: we broadened the use of technology when it became financially feasible AND it solved a business problem.
If it wasn't for the NEED to communicate with the employees, we'd not demanded a rohbust phone system. Today, we have the stores linked by a private T1 network for voice, data, voice-mail, etc.
Now for the internet...
About 10 years ago it became apparent that a new form of communication was on the horizon. Some of us had experience with the 'net via e-mail, compuserve, etc. and the proliferation of this technology was limited by cost of equipment and the connection to handle the traffic (like telephone technology in 1946). Much faster than the 20 years of the telephone story, we are able to field personal computers to just about everyone at the dealership for $150 each (cheaper than the phone units in some cases!) and connect them with a high-speed data network. But is there demand for this expense?
There is for us. Our mfg (GM) has put almost everything they do on a website somewhere: gm-dealerworld does alot of stuff (bulletins, VIS lookups, incentives, lease programs, parts locators) and providing access to these tools has been important to getting our job done. I'm also able to communicate to my managers (or the factory) via e-mail and that is much more time-convenient.
What about selling stuff on a web-site? We keep our site pretty fresh, load inventory info (although gmbuypower is rather accurate for new cars), provide helper sections, answer questions, etc. I'd say we sell some cars but not as 'directly' as others, we like to have people come to the store. Just like a phone call: when someone calls we try to get them to visit the store.
In the '40s we'd advertise our phone number as 'sycamore 95203' where sycamore was the local exchange. Today we advertise a toll-free number AND the web address.
Think of the issue this way: Could you survive in business today without a telephone? Hardly. Has the internet provided the same 'revolution' in business as the phone provided in 1946? Not yet, but it will.
scott
[This message has been edited by sallen1 (edited 03-26-2002).]
- sallen1
Where is the Internet heading?
by Matt Parsons » Tue Mar 26, 2002 5:29 pm
Sallen1, great to see someone with such a practicial approach to using technology. Constantly evaluate, change as needed, invest where you think you will get the most return, and most importantly, don't think that they cycle ever stops. For those that want to stop, fine, but don't be surprised when your customers and employees want to move on.
- Matt Parsons
Where is the Internet heading?
by puredealer » Tue Mar 26, 2002 6:53 pm
It's nice the see the boards alive again!
An interesting angle to this discussion is "what does the consumer want" of the Internet in relation to our dealerships. We often speak of what the dealership wants, but it may be more productive to think of the customer.
As more and more Consumers get onto the Internet, with even faster connections, how will dealers need to react? Internet usage is only growing, yet many dealer's feel that their Internet investments have yet to be realized. Some do feel the Internet's time is over, yet to me it is still in it's infancy stages.
Will dealers need to change their approach and make their websites more consumer friendly- offering more services and conveniences? Can dealerships thrive without having any focus on the Internet customer? Can the Internet customer be ignored?
In my opinion, the Internet's potential has yet to be realized. There is little in terms of standards out there, and most of the dealer sites stink in a big way. The corresponding Interent strategies or lack thereof need alot of work as well. Some dealer's have embraced this medium with the same vigor as paid to their newspaper ads, inventory turn over, and profit margins. Yet many dealers have become lemmings running in tandem with each other on this Internet- all heading towards what they had hoped was a new way of doing business when in fact they were just going with the flow rather than paving a new way.
-Michael
------------------
www.puredealer.com
An interesting angle to this discussion is "what does the consumer want" of the Internet in relation to our dealerships. We often speak of what the dealership wants, but it may be more productive to think of the customer.
As more and more Consumers get onto the Internet, with even faster connections, how will dealers need to react? Internet usage is only growing, yet many dealer's feel that their Internet investments have yet to be realized. Some do feel the Internet's time is over, yet to me it is still in it's infancy stages.
Will dealers need to change their approach and make their websites more consumer friendly- offering more services and conveniences? Can dealerships thrive without having any focus on the Internet customer? Can the Internet customer be ignored?
In my opinion, the Internet's potential has yet to be realized. There is little in terms of standards out there, and most of the dealer sites stink in a big way. The corresponding Interent strategies or lack thereof need alot of work as well. Some dealer's have embraced this medium with the same vigor as paid to their newspaper ads, inventory turn over, and profit margins. Yet many dealers have become lemmings running in tandem with each other on this Internet- all heading towards what they had hoped was a new way of doing business when in fact they were just going with the flow rather than paving a new way.
-Michael
------------------
www.puredealer.com
- puredealer
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