I was recently asked, “What's happening with the Internet, online auctions, dealer Web sites. And what about eBay? Are dealers dumping older, over-valued inventory on the Web, and if so, does it bring a premium price or is the 'Net just a cheaper way to expose product to more buyers?”
“Wow,” was my first response, my mind reeling. I must admit I was also surprised the question came up in the first place?
After all, most dealers put their cyber dreams in the attic more than five years ago to make room for the new millennium. Remember all those Web masters filling the aisles at NADA conventions in the late 1990s? Now only the factory flow throughs and a few lead aggregators remain.
I have a mental picture of my attic with boxes marked “Internet Department” filled with floppy disks and 28.8 dial-up modems. There's also a dusty box of yellowed “no haggle-one price” showroom posters and a carton of aftermarket eight-track players. I love reminiscing the icons of ideas that were destined to change our industry.
So when someone asks me about the Interet and how many exclusive employees I've dedicated to it (four) and how many units a month I'm selling from it (about 35), it brings me back to the time when those numbers were multiples higher and the mood surrounding them, electric.
The odd thing is that as I reminisce the changes over the past few years, I realize that where my world was once populated with fewer but bigger computers, I've now added two franchises, sold one, added about 155 employees and about 40,000 sq. ft. of new buildings.
There are now countless PCs in an equation that pushes more and more information deeper into the organizational chart (at prices per bit that are almost free).
I also take notice that while the number of in-store visits with a customer has remained pretty constant, the number of contacts (information exchanges) per sale has risen dramatically. It's not just that everyone's running around with cell phones glued to their ear. Instead, like so many of my new-age employees, most of my customers are never more than a few yards from high-speed internet access linking them to endless data streams with product comparisons spawning more and more sophisticated questions.
Where once most of these questions were quieted by the fear of being trapped at a salesman's desk, today's buyer's do their shopping on the fly, free from the near hand-to-hand sales combat of yesteryear. Today's shopping goes on constantly and endlessly, 24/7.
So what has become of the Internet and of my Web site and online auctions and vehicle sales through eBay?
They are all part of this technology that links dealers to buyers, suppliers and manufacturers in less and less personal ways. It has increased the audience, but not the margins on deals.
It has enhanced the speed of a transaction, but not the relationship of the parties to it.
In short, we can now market more products to more people at lower prices. What remains uncharted and unchanged is how we will manage ethics and quality in this virtual world of wafer-thin profits. Moreover, how will we extract much-needed margin from the commodity auction that puts every product online all the time?
I predict that the pendulum will swing, even is swinging, to where products themselves are valued little more than their intrinsic component costs.
Consumers are using information technologies to demand the most perfect of products at precisely the cost a manufacturer pays to produce them. The only premium that's left is attached to assurances that a given product will fill a customer's needs and that there will be easy access to live support people when those needs go unfilled.
The more visible those live support people are to the point of purchase, the more credible the back-end assurance of suitability and reliability, and therefore the higher the premium that will be paid.
At first we may call this point of purchase staff “customer assurance people.” Soon they will be called simply “sales people” and they will be knowledgeable and empowered and paid based upon the sales they influence.
Wait a minute, I think I've seen this somewhere before.
Peter Brandow is a veteran dealer in Pennsylvania and New Jersey.