Think Outside the Blocks! ™
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