Waking Up to The Digital Reality: Why the Auto Auction Industry Should Self-Disrupt

For many, the hardest part about adapting, is breaking from routine. When you have gotten to the point where you feel like you've trained your staff well enough to do the job in their sleep, you are more apt to reject any new procedures, no matter how much opportunity they present, or how much efficiency they may create. After all, with nothing to indicate that your business is in jeopardy, why do anything? Especially if your business seems to be thriving.  So rather than disrupt your operation, you continue to do things the way they've always been done. If and when the time comes, you will deploy the methods you need to save your business, because of course you will see the attack coming from a mile away... Right?

Well, let's ask Blockbuster Video. Once the undisputed leader of video rentals, BlockBuster began to attribute a large portion of revenue to late fees. Prompted by a $40 fee for a late return, Reed Hastings - a disgruntled customer - founded Netflix... (you've heard of them right?) Not only did Netflix abolish the late fee, but they also proceeded to reinvent the way customers obtained video rentals. They established a strong position in the digital space, allowing customers to purchase movies on demand. Customers demonstrated their opposition to BlockBuster's disproportionate penalties by subscribing to Netflix, who provided convenient access at a reasonable price. By 2010, the brick-and-mortar video giant once valued at $8.5 Billion, had been brought to its demise. 

This is just one example. In most cases, unlike the BlockBuster scenario, the disruption is too sudden to formulate a counter attack. All eyes are on the web, and even simple applications now have the ability to disable traditional markets.  Consider what email and digital payment systems have done to the United States Post Office; what digital photography has done to Kodak; and what Amazon has done to bookstores. The iPhone alone has consolidated what used to be several devices. Social Media has replaced personal encounters. Uber has waged a war on the Taxi Cab industry, and WhatsApp is challenging the telecommunications industry as we speak. 

With the constant availability of the Internet through a multitude of devices, the growing acceptance of shopping online, and a new generation becoming more fluent in the virtual environment, it is safe to say that the Auto Auction Industry should be afraid... very afraid! It is called 'disruption', because you do not see it coming, and there are currently many technologies targeting the traditional auction format. My belief is that the only way for the Auto Auction Industry to sustain itself is to self-disrupt. This is not to say that auctions should perform a complete overhaul of their core business model, but that they should place a stronger emphasis on the development of the virtual equivalent. By simultaneously supporting both traditional and modern methods of operation, auto auctions will find themselves in a stronger position to disrupt the disruptors. 

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"Think Outside the Blocks!"

Deny Your Customer, and Your Customer Will Deny You!

One of the hardest parts about transitioning an old school business to the modern age of digital, is the belief that everything must be done in person. "Customers have to be able to kick the tires!" "You have to shake the customer's hand, and look them in the eye!" These statements are the low-hanging fruit of digital disruption. What if that isn't what the customer wants. What if the customer wants a choice?

To quote Rear Admiral Grace Hopper,"The most damaging phrase in the language is: `It's always been done that way.'" If your intention is to build an online business, then you must succumb to the expectations of the online customer - And why wouldn't you? These customers are not typically 9-5 oriented, and they are willing to explore your information. They will chat, call, or navigate through your self-help portal any time, day or night, if you let them. While searching your site, they may have a quick question that they will just as quickly dismiss if they have to pick up the phone, and make a call. However, when a customer has the option to send a message via chat, then they actually initiate the sales process. This is an advantage that is completely overlooked by traditionalists.

Online customers are not the type to hound you about implementing new features. If you have it, then you have it. If you don't, they will keep it moving until they find an online business that does. Without the burden of travel, online customers are able to sift through businesses like the pages of a newspaper... (which they no longer receive, because they prefer to read the digital version). In other words, you need to know your customers before you decide to make decisions for them. Deny your customers the service options they want, and they will deny you the business you need!

Think Outside the Blocks!