General Motors to "bypass showrooms" according to this story in the Wall Street Journal.
I think the word "bypass" is a bit of a hornet's nest -- when in truth, perhaps GM is trying to take the bull-by-the-horns.
Just saw this in todays's NADA Headlines report:
General Motors Co. plans to expand a new online shopping tool that allows customers to bypass showrooms when buying new cars. The software, which keeps GM's 4,300 dealers central to the sale of its vehicles, will provide a high-profile test of whether the auto maker can better cater to online-savvy consumers without running afoul of state franchise laws that give dealers exclusive rights to sell most new cars. By the end of this year, GM plans to extend a Web-based application, called Shop-Click-Drive, to its entire dealer network.
The app would let new-car buyers use their computer screen to lock in the price of a new car, get an estimate of the trade-in value of their old car, apply for financing and even arrange a test drive or delivery of their new vehicle. GM dealers aren't required to participate in the project, and GM officials say they have had some dealers turn it down. One potential sticking point is that the auto maker for several years has pressured dealers to undertake costly makeovers of their stores—investments that could be undermined if more shoppers buy online. About 100 other dealers have signed up so far through a pilot launched in January in Michigan, Minnesota, Wisconsin and Arizona.
"My initial reaction was we have investment in brick and mortar, and they're trying to come up with an idea contrary to that," said Todd DeNooyer, general manager at DeNooyer Chevrolet in Kalamazoo, Mich., which was among the first batch of dealers to test GM's shopping app. But Mr. DeNooyer said he was intrigued by the idea because he is an Amazon.com customer and was curious to see if a similar business model would work for autos. "We're trying to gear it to millennials who want to take it as far as they can online," he said.
GM says the program isn't intended to replace dealers or their showrooms, but rather to give its dealers a way to reach a growing group of customers, many of them young and tech-savvy, who prefer to complete transactions online and skip the showroom ritual. Of the 900 cars sold so far through the Shop-Click-Drive program, only five have been delivered directly to customers. The vast majority of buyers chose to pick up their new purchases at a showroom.
Source: The Wall Street Journal
While this may be a valiant attempt to address the modern consumer, I predict it will fall far short of expectations. The Shop-Click-Drive technology appears to merely be an online shopping cart, albeit a sophisticated one. These one way shopping carts have been tried many times in the past on a smaller scale, but the results show that consumers will merely use this tool as another means to shop one dealer against another.
The only way to provide the consumer with a hassle free online buying experience and the dealer with the chance to make a fair profit is through building rapport and engaging the consumer. This can be done. I'll offer a free copy of my book "Online Negotiation is Now a Reality" to any DealerElite member. Just email me a request at email@example.com or contact me through this forum. Thanks!
I think this process is interesting. I know through the BDC that people want to be informed. I think the Shop and Click would be appealing to the consumer because that way they don't have to spend half a day at the dealership to purchase a vehicle. I myself would like that and then go to the dealership to test drive the vehicle and finalize the sale. It's more streamlined for the consumer who is definitely tech savvy.