[Yet Another] Online Car Sales Conundrum

When we last commented on work being done over at Borrell Associates, it created some further dialogue in relation to observations made by Amy L Phoenix, in her interview with us for our Keep It Real Interview Series.

While happening again upon something from Borrell [purely coincidentally, as it goes], we will comment this time instead on work being done by a client of theirs. A client embarking on a new venture in a corner of the world that MoM[S] also happens to have great expertise: Automotive Sales & Marketing practices in the Digital arena.

In fact, we’ve worked at AutoTrader.com under CEO Chip Perry, the subject here of Borrell’s interview entitled, Auto Advertising: Dawn of a New Era?. [Disclosure: MoM[S] was the first National Brand Mgr ever hired at Mr Perry’s firm, and spent more than 3 years there.]

atc1

Whereas Chip admittedly states that, “We have puzzle pieces we are working on today…”, which sounds early-stage to me, it will be quite another thing to be, “talking about…becoming the Amazon.com of the auto industry”, as the Borrell author states it. Those are quite a ways apart.

Now, as much of this is somewhat vague at the moment [probably intentionally so], the key issue…as always in the car business…is how this impacts the Dealer function. It is that one element, that has slayed many an online firm over the years, while building others.

As Mr Perry clearly knows where the line is on this [if anyone does], it would appear that AutoTrader may be closer than ever before to not only crossing this line, but wiping it out all together. Until they find some happy medium amongst all those ‘puzzle pieces’ to effectively offer some version of a “Concierge” type service, it will be very interesting to see what moves they can make to progress the online experience further, without at the same time alienating their core source of revenues: Dealers.

And THAT is the key difference with Amazon, which the article does not address: Amazon derived its early success from book-buying customers, not from bookstores. So there was no “threat” to its revenues by going directly to customers; it was nil. Not so with AutoTrader, which generates many hundreds of millions of dollars annually, conceivably from what may be directly impacted by the move talked about here: Car Dealers.

In looking at how this applies to AutoTrader, apparently the days of merely assembling & aggregating most of the available Dealer inventory across the nation as a Best-In-Class web property, making it easy to search & compare, and then bringing in Factory incentives for shoppers to be enticed by, is no longer enough.

Also coincidentally as it goes, in the week following this interview, the January 21 edition of AutoNews, featured not one, but two articles talking about a seemingly very similar topic, but from the other side. These were offered in terms of how wanting many purchasers now find the online ‘Automobile Shopping Experience’ in 2013. Interesting timing between all of these.

See those articles here and here. Maybe Chip Perry is once again on to something, and charting a new course for others to once again follow.

That said…change in the Autos biz is hard, despite the many great successes of this firm. The disastrous set of turns alone at TrueCar.com has certainly proven that. [And it has to make you wonder: How are they still in business at this point?]

And you can reference the many trials, twists & turns at other firms like AutoByTel, or CarsDirect to follow if you like.

Like always in the case of this legendary online firm, AutoTrader is not one to be counted out. This despite the seeming odds against them at their beginning, and once again now, as they look to define a new course for Automotive shoppers on the Web another time.

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~ by MindOnMediaSales on March 3, 2013.

One Response to “[Yet Another] Online Car Sales Conundrum”

  1. Good information. Lucky me I came across your website by chance (stumbleupon).

    I have book-marked it for later!

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