"Think Outside the Blocks!"TM
Sunday, November 27, 2016
Friday, October 21, 2016
"I think you guys are doing a fantastic job at your online department, can't think of any improvements needed at this time but love all the improvements you have made recently, just wanted you all to know that! "
Monday, September 26, 2016
Thursday, September 1, 2016
Thursday, July 21, 2016
Monday, July 4, 2016
The Online Perception
Perhaps Buzz is a bit naive... or... maybe Woody has had a bad experience in the past. (For those of you who don't have have kids, I am referencing the image above.) The bottom line is that you have 2 different characters, with 2 different reactions to the same activity: buying vehicles online. I selected this image because I think it truly reflects the current state of online remarketing as we continue to transition into the digital world. In fact, when you first looked at this image, you may have felt Buzz's enthusiasm, or identified with Woody's pain. What is important to understand is where the perception originated, and what auctions can do to improve. Before we explore the contributing factors to the online perception, let's take a look at the existing views.
The Traditional View
For some dealers, there is a blatant resistance to buying vehicles online. The auction experience is a time-honored tradition. It is very important to be able to kick the tires, listen to the engine, look under the hood, and close the deal with a firm handshake. In addition, it's important to engage with other local members of the industry. It's a community.
The Intermediary View
Then there are dealers who are willing to buy online, but have established some 'play-it-safe' rules regarding their activity. For instance, they will only purchase vehicles that are over a specific price point. Some restrict their online purchases to Factory, Fleet Lease, or Institutional events. The majority will not purchase without a detailed condition report. Then there are those that may attend online, but send in a rep to touch the vehicle. Last but not least, you have the buyers who believe the Internet to be a great tool to conduct the preliminary research, but revert to traditionalism when it comes to the actual purchasing.
The Revolutionary View
The world is in a rush, enabled through an onslaught of innovative technology that makes 'waiting' a thing of the past. 'Time' has increased in value, and options are virtually unlimited. Why attend a single, local auction when one can simultaneously view multiple online venues, reaching beyond the geographical proximity of the dealership? If it can't be done from a mobile phone, it's not worth doing.
These dealers are not the majority, but the numbers are definitely increasing, and are expected to rise as Millennials begin to occupy positions in remarketing once held by traditionalists. You do not have to be clairvoyant to predict that there will be a shift from lane attendance to simulcast - that is - if a new technology doesn't emerge to disrupt the entire industry altogether.
The 'X' Factor
Now back to Buzz and Woody. What makes Buzz so confident while Woody appears to be on the verge of a panic attack? A good majority of the industry will tell you that it has to do with the condition report, and the age of the vehicle. However, when I look at similar, successful online business models, I see an unlimited capacity for online sales. One that is not restricted through a single criteria, but instead, is based on the infrastructure of the business as a whole.
The Anti-Online Auction
To date, the majority of brick-and-mortar auctions have become simulcast-enabled. Another way to say it is... they've put their business online. Meanwhile, here's what they didn't do... create an online business.
A dealer performs a keyword search for an online auto auction. He views the auction's website, which offers enough information to prompt him to register. He attends the event, and realizes that there is so much he doesn't know about this auction. He has a few questions. He attempts to call the auction, but it is sale day, so he is not able to get through. He proceeds to message the online clerk who doesn't respond. Finally, he decides to bid on a vehicle, and just as he thinks he won the bid, his offer is retracted, all bids are closed, and the vehicle is sold to the floor.
Now let's say that this dealer bids on another vehicle, and is successful. He has the vehicle transported 500 miles to his location, only to find that the transmission is making a very distinct noise. He looks back to the condition report to find that there were no announcements, and nothing was mentioned during the broadcast. The process to arbitrate the vehicle is arduous, and in the end, he learns that he will not be reimbursed for the cost of transportation. What's more? he paid an additional fee to enjoy this convenience.
What is the common denominator in this dealer's entire experience? Is it the condition report? Is it the age of the vehicle? Or do you think the process could've been greatly improved with a stronger online infrastructure that was globally sound, and provided adequate resources for communication?
It seems as though the burden of a good online experience weighs primarily on the dealer's ability to overcome the lack of an online infrastructure. Essentially, the auctions are waiting for the dealers to adapt rather than adapting to the dealers. Why? Mostly because they don't know what they don't know.
If you're a dealer, and you buy at online auctions, we are looking for your feedback. Voice your concerns, or your satisfaction. This is an opportunity to improve the online experience. You will be heard. Click here to locate and review an online auction now!
Think Outside The Blocks
Saturday, May 14, 2016
Sunday, April 24, 2016
Monday, April 11, 2016
The Customer Perspective
Your lane customers show up to the sale, and they are welcomed with greetings from the staff, Early Bird Specials, free lunch, a chance to win prizes by participating in physical activities after the sale... It's all part of the physical auction experience. The online customer logs in... no incentive to attend, no acknowledgment of their presence, the fear that floor bidders will be shown preference, and an added fee for the privilege of being able to purchase online. What are we saying to online customers?
This scenario is the condensed version all of the discouraging factors I have seen at various auctions throughout the country. These practices were implemented through the direction of the simulcast vendor, the perception of the auctioneer, and despite the absence of research and development. Live Auction Broadcasts were sold to the auctions as an enhancement, not as a virtual expansion. Therefore the perception not taken into consideration was that of the online customer. This is probably due to the fact that, back then, online attendance was extremely low, and online options were limited.
Why Do We Tax the Online Customer?
I remember working at the auction, and having the simulcast provider sell us on the idea that we could make money by charging our online buyers an added fee for the convenience of shopping online. Looking back, I see that this was a tactic to counter our reaction to the investment we would be making in licensing the software. Now, compared to other platforms, it's almost as if customers are being fined for attending the online event. Additionally, when a buyer makes the decision to purchase vehicles, he has to factor in that added cost, which reduces the motivation to buy. I think it's safe to assume that motivated buyers lead to higher conversion rates. I am also going to assume that the revenue from the buy-fee would be more lucrative than an online tax.
The Digital Revolution
In the last issue, I distributed an article on digital disruption, and the impact it has had on Fortune 500 companies. The moral of the story was that managers who did not direct a healthy initiative towards virtual development were unable to compete with advancements in online automation that reduced operating costs and created greater efficiency for customers within their industry. They also went on to point out that the digital revolution is reaching all industries. Let's look at the evidence in wholesale remarketing. Auctions are now beginning to compete with former consignors as new platforms are emerging, branding dedicated marketplaces for companies like GM, Hertz, and most recently, the dealerships. In order to counter this disruption, we need to focus on the advantages the online auction facility brings to the digital customer. We have to undo all of the wrongs, and eliminate anything that may discourage customers from online participation.
How To Counter The Attack
AuctionVcommerce was developed for this exact purpose. So of course we're going to recommend membership. In the midst of this digital revolution, it is imperative to align your organization with others looking to preserve the future of the industry. You can continue to enhance your technology as part of the plan, but at the end of the day... Did you provide your online customers with a memorable experience? Were your online customers able to enjoy your virtual facility without unnecessary inconveniences? Most importantly... will your online customers be back?
In our review of the auction data that we have accumulated over the last 5 months, we have made the following assessments: Across the board, the ratio between online attendance and online participation is extremely low. Increased attendance, for the most part, does not impact the percentage of participation as it should. Active bidders tend to be the same core group week to week with a small variation of random participants. Meanwhile, there also seems to be a dedicated group of observers, or at least, attendees with ongoing records of low to no participation.
Collectively, we are developing the standards that will serve to transition the traditional auction model to the virtual space. Our goal is to open the discussion with Auction Owners, Officers, General Managers, and anyone else involved in the decision making process. You have read my personal point of view on auction fees, and online incentives. I would like to know where you stand on both of these issues. Please respond with answers to the following:
- What is your point of view with regard to online fees?
- What incentives do you currently provide, or would you be willing to provide to online customers?
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