It’s being said General Motors is not trying to copy Tesla’s circumventing of the franchised dealer model with its online shopping pilot project, but it is working on maximizing Web-based sales in a program called Shop-Click-Drive.
The initiative has around 100 dealers signed on around the country. To date 900 sales have been made and by year’s end all 4,300 GM dealers will reportedly have ability to opt in to the customer gathering virtual fish net.
“There are some dealers out there who are Internet savvy and enable consumers to do a lot of the experience online,” said Ryndee Carney, manager of cross-brand communications for GM in an interview with Time magazine. “What’s different about Shop-Click-Drive is that consumers can virtually complete the whole transaction online all in one place.”
Undoubtedly other dealers are watching whether GM can make this into a profit center, but to date the “what’s different” portion has only seen five out of the approximately 900 sales fully consummated online.
The other 895 sales so far had to get around sticky issues like customers wanting to test drive a car before clicking five figure commitments sight unseen, not to mention dealers’ need to see trade-in cars before a deal can be completed.
But indicators are GM may be onto a good thing as it and others seek to tap into that more elusive species we keep hearing about, the “Millennial” or Generation Y buyer. These youngest buyers aged up to lower to mid 30s are reputed to drive less, and be way more Web savvy, and routinely research and buy online.
And actually, they are not utterly avoiding car purchases either. In 2012, according to Polk Research, Millennials bought over 1.2 million cars, a bit less than 10 percent of the U.S. total, and a sizable revenue stream to cater to.
Time notes that consulting firm Capgemini’s annual survey of buyers found 94 percent will research globally online and one third would be willing to buy online.
The de-personalization of the traditional dealer-to-customer sales process is seen as a mix of potentially positive and negative changes.
Among the perceived positive is consumers’ ability to avoid the dreaded haggling process, and having to physically and time-consumingingly travel to a dealer, who may be nice, friendly and competent, or not.
Among perceived not-so-good for dealers is they may forfeit ability to sell profitable add-ons to a car sale, and cultivating customer loyalty could be more challenging when the customers are face to face with their monitors, instead of a friendly salesperson.
“The dealer might actually make slightly less money per unit using this new process but because their volume’s gone up, their overall profit has gone up,” said Tom Libby, a senior forecasting analyst at Polk in an interview with Time. “From that standpoint it might very well help them.”
For now, only Tesla is attempting to actually deal factory direct. GM says it is not willing to upset the applecart having seen the power of dealers to fight for their share.
But like Tesla, GM is making it possible to buy a car from start to finish online.
Tesla also delivers its cars – for a fee of just around $1,000, but even if GM’s Shop-Click-Drive buyers do the whole thing online, they will still have to go to the dealer eventually, if they want to “drive” the car the shopped for and bought.
Observers say if the process can be made to work, it could see more attempts at the auto manufacturer level, and stands to reshape car buying in years to come.