Go Big or Go Home by Stephane Ferri - Internet Sales 20 Group
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Go Big or Go Home by Stephane Ferri - Internet Sales 20 Group
- 1. GO HOMEGO HOME GO BIGGO BIGor Stephane Ferri Division VP, Southeast; Cox Automotive Stephane.Ferri@coxautoinc.com 404-568-8183
- 2. Source: The Conference Board, Moody’s Analytics 2 Consumer Confidence Down Slightly But Near 16-Year High May negative news saw confidence dip and plans to purchase a car fell as well 0 3.75 7.5 11.25 15 0 32.5 65 97.5 130 2/1/15 7/1/15 12/1/15 5/1/16 10/1/16 3/1/17 8/1/17 1/1/18 6/1/18 11/1/18 4/1/19 9/1/19 2/1/20 7/1/20 12/1/20 5/1/21 Consumer Confidence % Planning to Purchase Car in 6 Mos
- 3. Source: BEA; Recessions (shaded) defined by NBER's Business Cycle Dating Committee 3 New Vehicle Sales Move Up and Down Within Business Cycles Historically a below trend turn in new vehicle sales was caused by a recession or credit event 0.00 0.25 0.50 0.75 1.00 0.00 4.75 9.50 14.25 19.00 1980Q1 1982Q2 1984Q3 1986Q4 1989Q1 1991Q2 1993Q3 1995Q4 1998Q1 2000Q2 2002Q3 2004Q4 2007Q1 2009Q2 2011Q3 2013Q4 2016Q1
- 4. Source: BEA, Bobit 4 YTD Through May, New Sales Down 2% Retail share has been growing as declines in fleet have been more significant 78% 81% 84% 86% 89% 0 400,000 800,000 1,200,000 1,600,000 1/2/2020 3/2/2020 5/2/2020 7/2/2020 9/2/2020 11/2/2020 1/2/2021 3/2/2021 5/2/2021 Fleet Retail Retail % of Total
- 6. Source: AutoData 2016 WITH 18.4M NEW VEHICLES SOLD 2017 WITH 19.55M? 6
- 7. Ride SharingCar Sharing Alternative Ownership 7 New Transportation Models
- 8. Source: Company filings *KMX shifted forward one month to correspond with calendar quarter 8 Margins are Contracting Chart Title 8.0% 9.1% 10.3% 11.4% 12.5% 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sales-weighted average for KMX *, AN, PAG, SAH, GPI, ABG, and LAD PUBLICLY-TRADED DEALERSHIP GROUPS
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- 10. Strengthen Internet Leadership Position Expected to grow sales 150% in 2014 and is generating operating profit. Extends the customer experience in to a new arena for Nordstrom strengthening its online relationship with the consumer. “It is very important to understand the customer’s need to find time to shop” — Blake Nordstrom TRUNK CLUB ACQUISITION 10
- 11. 11 There is a Shift Happening in Automotive
- 12. 12 Consumer Behaviors Impacted by Experiences Better Experience with Technology Purchases from match sticks to mortgages Save Time Groceries, Home Products, and Food Transparent Buying Process Local store delivery and try before you buy
- 13. 13 Disruptors are Aggressively Attacking Car Sales “Trust and simplicity come standard.” “Skip the dealership.” “A car without a salesman.”
- 14. 17 4002 14
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- 16. Based on sales data from over 2500 vehicle sales that were facilitated with Make My Deal, the deals resulted in 75% higher front end gross, 26% higher back end gross, 19% higher price on service contracts, and 51% higher prices on GAP product sales. 16
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- 19. “I can buy everything else online, why not my next car?” Buy Now! 19
- 20. BUY ONLINE FREE SHIPPING SKIP THE DEALERSHIP 20
- 21. 21 Customers are frustrated with their car buying experience 1. The time it takes 2. Negotiating price 3. Comparing payments 4. Getting a value on trade 5. Obtaining financing 6. Being sold F&I products
- 22. Source: Based on data from Autotrader’s Digital Retailing Study 1/26 –2/12/2017 n=128 Source: Based on data from Autotrader’s Car Buyer of the Future Study 22 It’s not you OR the computer, Want to start the purchase online 70% 88% Would not purchase a vehicle without test driving first. 73% Say personal connections with dealers are important. it’s you AND the computer
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- 24. 1. Inventory really available 2. One price, no negotiation 3. Trade-in value locked, sight unseen 4. Online cashable deal sheet 5. Customers have zero questions 24 Are Shopping Carts Right for Automotive Retail? BUSINESS MODEL CHANGES REQUIRED
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- 26. Relationships 26
- 28. Source: Cox Automotive, NCM Associates 28 The Biggest Cost in Selling the Car is Selling the Car $500 Advertising $750 Labor $150 Labor Research and Shop Structure Transact
- 29. Source: *McKinsey’s 2013 Retail Innovation Consumer Survey ** 2009 J.D. Power Autoshopper.com Report 29 3-5DEALERSHIPS 1.467% ONLINE SHOPPING 2006
- 30. 30 Digital Retailing — WHY Your customers want an online experience … because they are frustrated with today’s buying experience But the future is not just “click button, get car” They want to start online, then meet you and drive the car, then sign The biggest cost in selling the car is selling the car The biggest problem in retail is lack of greater profitability The biggest problem in retail is customer experience (getting to yes) These are the same problem The car business is a relationship business so communication, trust, integrity are the basis of competition But you are making your customers go first online (lead forms on VDPs) You must evolve/change
- 32. 32 Retail Sales Process STEP 1 “Landed on a vehicle” The Car STEP 2 “Getting to yes” Desking STEP 3 “Spin the paper” F&I
- 33. 33 Digital Retailing STEP 1 “Engage” Start Deals STEP 2 “Communicate and Agree” Make Deals STEP 3 “Transact” Transact Deals $439 EST. PER MO.
- 34. 34 Digital Retailing: Step 1 – Start Deals STEP 1 “Engage” Start Deals $439 EST. PER MO. STEP 2 STEP 3
- 35. $439 EST. PER MO. 35 Digital Retailing: Step 1 – Start Deals STEP 1 STEP 2 STEP 3 ONLINE IN-STORE
- 36. Finance $204/mo Lease $215/mo Finance $204/mo Lease $215/mo 36 Step 1 – Start Deals Online Payments on Every Listing Shop by Payment
- 37. START DEALS MAKE DEALS TRANSACT DEALS 37
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- 39. 39 Appeal to Buyers Across the Credit Spectrum n=50,814 (900-750) (749-700) (699-650) (649-600) (<599) 0% 10% 20% 30% 40% Excellent Very Good Good Fair Poor Customer Submitted U. S. Average
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- 43. n=13,207 0% 25% 50% 75% 100% Excellent Very Good Good Fair At Handshake Customer Submitted KBB Benchmark 43 Trade-in Condition
- 44. n=13,207 0% 25% 50% 75% 100% Excellent Very Good Good Fair At Handshake Customer Submitted KBB Benchmark 44 Trade-in Condition
- 45. n=13,207 0% 25% 50% 75% 100% Excellent Very Good Good Fair At Handshake Customer Submitted KBB Benchmark 45 Trade-in Condition
- 46. 10x 46 Step 1 – Start Deals Online Payment Merchandising Self-Penciling Payment Merchandising Self-Penciling Engagement! 27% CAGR
- 47. 47 Start Deals on Your Website and Autotrader
- 48. powered by 48
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- 50. powered by 50
- 51. 51 Work Deals, Not Leads HOW YOU DO IT TODAY First Name Last Name Phone Email Get ePrice 2017 Mini Van $49,500 Price $519 per month 60mos / 6.99% APR / $5,250 down $8,427 KBB Trade Value 2012 Truck / 87,326 miles / Fair Condition) Vehicle Protection 3-yr Prepaid Maintenance / Appearance Protection Pre-Approved $53,000 / Tier 2 / 5.49% “I would like $9,000 for my trade, I’m looking at purchasing this weekend” My name is Ann, credit score is 680 680 Credit Score / Shopping for $400 - $450 payment HOW IT WORKS WITH DIGITAL RETAILING
- 52. 52 Digital Retailing Step 1 – HOW Move the conversation to payment online (go first in the relationship) Make payment merchandising a top priority for your 2017 marketing Increase VDP engagement up to 10x with self penciling Put the customer in control of their buying experience Give customers the information they need online, don’t make them go somewhere else to get it Let customers tell their computers the truth about how they want to buy… then let it show up in your inbox Start the in-store experience with the car and the payment they personalized online
- 53. DEALER 53
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- 56. Admin Fee 56
- 57. 57 Digital Retailing: Step 2 – Make Deals Online Communication Deal Structuring Connection Agreement Acceptance Admin Fee
- 58. Source: Cox Automotive Inc. 2016 + 20% 58 Gross Profit
- 59. Results EXPERIENCE TOP CAR BUYER FRUSTRATIONS SOLVED Save Time Comfortable Price Negotiation Transparent Payments Guaranteed Trade Value Convenient Online Financing Shop Online For F&I Products 59
- 60. 60 Results DEALER PROFITABILITY ROI VDP Engagement (10x) VDP Conversion Rate (2x to 3x) Sales Closing Ratios (+30%) Gross Profit (+20%) Faster Turns (5 days less)
- 61. 61 Digital Retailing: Step 2 – Make Deals – HOW Sell the car, not the appointment
- 62. 62 Digital Retailing: Step 3 STEP 2 “Communicate and Agree” Make Deals STEP 3 “Transact” Transact Deals STEP 1 “Engage” Start Deals $439 EST. PER MO.
- 63. 63 Digital Retailing: Step 3 – Transact ?☹ $439 EST. PER MO. STEP 1 STEP 2 STEP 3 ONLINE IN-STORE
- 64. 64 Digital Retailing: Step 3 – Transact $439 EST. PER MO. STEP 1 STEP 2 STEP 3 ONLINE IN-STORE
- 65. 65 Digital Retailing: Step 3 – Transact STEP 1 STEP 2 STEP 3 ONLINE IN-STORE $439 EST. PER MO.
- 66. 66 Digital Retailing: Step 3 – Transact Deals Online Reservations Deposits
- 68. 68 Digital Retailing STEP 2 “Communicate and Agree” Make Deals STEP 3 “Transact” Transact Deals STEP 1 “Engage” Start Deals $439 EST. PER MO.
- 69. 69 Messaging to Customers STEP 2 “Communicate and Agree” Make Deals STEP 3 “Transact” Transact Deals STEP 1 “Engage” Start Deals $439 EST. PER MO. “Real monthly payments!” “Get your deal online, sign in-store!” “Buy online!”
- 72. 72 GED’R DONE!TM
- 73. GO HOME GO BIG HOW TO BE ON THE FOREFRONT OF DIGITAL RETAILING GO BIGor GO HOME Stephane Ferri Division VP, Southeast; Cox Automotive Stephane.Ferri@coxautoinc.com 404-568-8183