The thought that Amazon, or any other online outlet, would one day be selling cars was laughable a few years back.
After all, who in their right mind would buy a vehicle online without seeing it in person or taking it for a test drive?
It hasn’t happened yet in the United States (though Amazon is selling cars in Italy), but there aren’t many businesses that the online-retail giant doesn’t currently have its hands in (or plans to), and one should just expect that it, and similar firms, will be selling cars before we know it, letting customers skirt the traditional dealership. It’s called the “Amazon Effect” in some circles, and plenty of former retailers with physical stores are all too familiar with the results.
But that doesn’t spell the end of car dealerships as we know them, stresses Max Zanan, in his newly released book “Perfect Dealership.” It does mean that dealerships need to up their game in some key areas, though.
Zanan is a New York City-based automotive consultant. He began selling cars in 2001, and by 2006, he was Platform President at Elite Auto Group, overseeing three dealerships that reportedly moved 700 vehicles per month and averaged $2,800 per retail unit, over two hours per repair order and a 45 percent gross profit in parts.
There is a lot of great information in the book, but Zanan hammers home one point in particular: The customer is in control.
With more Internet information than ever at their fingertips about the vehicles they want to buy, and an inherent distrust for dealerships, it’s tougher than ever to get a customer to make a transaction, much less keep them coming back.
Zanan has plenty of dealership-specific tips that industry insiders will find helpful, but he keeps coming back to the importance of the customer experience, which is being embraced, albeit slowly, by the overall retail industry, which he references several times in the book.
One of the examples he refers to more than once is Apple Stores. When a new iPhone comes out there are lines around the corner the day it is available to purchase. Apple Stores are famously successful, but you can buy anything they sell in them online.
So why do people even bother to show up at these outlets?
They are drawn to them for the experience. The same is true for Costco Wholesale, which one probably doesn’t associate all that much with the upscale and sleek design of an Apple Store. At Costco, though, consumers are drawn toward the enjoyment of free food samples and the anticipation of a new product that could be in stock.
This is the kind of buzz that car dealerships need to generate, Zanan argues. Instead of a chore, shopping for a vehicle should be looked at as an enjoyable opportunity.
“I wrote this book because I didn’t want the car business to be the next Blockbuster,” he writes at the end. The implementation of a lot of his ideas could be a step in the right direction toward avoiding that fate. See below for more information on ordering a copy of Zanan’s book.
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