Not long into the life of Roadster, the San Francisco-based company made a pivot.

It began as an online vehicle concierge service with more of a consumer-facing mindset, explains chief executive Andy Moss.

The inventory sold came from dealerships, but Roadster was still “shielding” consumers from going through the traditional dealership sales process, Moss said.

Then with the release of Express Storefront in 2016, Roadster changed its model to include dealers.

The company announced last summer that it was making its e-commerce platform available to dealers as a white-labeled solution.

Through the Express Storefront platform, dealers are able to put the entire car-buying process online, “from merchandising through home delivery,” Roadster said when announcing it.

The results since then, as it turns out, have been mutually beneficial. Roadster had greater scalability and was able to expand rather rapidly; dealers, meanwhile, were able to modernize the buying experience for their buyers and offer e-commerce.

Moss points to “a certain modern-ness” in how consumers interact with activities like buying clothes or other goods and setting restaurant reservations, for instance.

The auto industry is at an interesting point where the consumer expectation is growing towards such a modern experience, but the execution is not entirely there.

“If you look at that compared with what the dealers bring to the market today, it feels pretty old-fashioned,” Moss said by phone in late April. “So, in pivoting Roadster, we went from trying to compete with them for consumers to recognizing that and working on the principal that if we can provide the process and the tools, like we were doing with Roadster.com, but for dealers directly, we could effectively provide them with that ability to modernize their experience.”

Tech not enough

But having the industry know-how that a dealer would possess is a crucial element to success in online auto retail. Being all tech with no auto industry background can prove challenging.

Indications are that technology backgrounds perhaps are not enough.

“What we see is that being a car dealer is extremely difficult. There’s a lot of aspects to the transaction, there’s lots of complexity,” Moss said. “They have to understand prices and inventory; the local presence they have in the market, the relationships they have with the OEMs and franchises, all the different aspects around service and parts and all those different pieces.

“And then, a car dealership is a very complex business,” Moss said.

Roadster has found that “in many ways,” working with progressive dealers and providing them with the necessary tools to conduct e-commerce can be easier than a tech company becoming a car dealer. 

To be clear, change is needed among dealerships. They must meet customer expectations for digital options. Otherwise, there’s the danger of what has happened to many box stores and brick-and-mortar retailers in other industries.

“Car dealers do need to change. If they don’t change, they will go the same way as the Circuit Citys and the Blockbusters of the world. But you’re also in a situation now where there are now solutions out there that let you really deliver the world-class technology, and in some ways, they can leapfrog some of the bigger players,” Moss said.  

“The AutoNations of the world and the Sonics, they’ve spent a bunch of money actually working on some of the online buying and the stuff that Roadster does. But even then I don’t think they’ve really focused on the customer experience,” he said. “And then we’re able to bring them the tools to really compete at the cutting edge with the Teslas of the world and the car-sharing services with an experience that, effectively, customers expect, especially the millennials.”

Scaling the model

Being able to utilize a dealer’s industry aptitude played a part in Roadster’s decision to shift its model, along with the potential to scale the concierge business on a national level.

In its concierge model, Roadster developed a “deep appreciation” of the process dealers have to take and the hurdles they have to jump through since the company, essentially, had to go through similar steps itself.

“What we then found (was) the dealers were then coming to us and saying, ‘We don’t love the broker model because it cuts us out of the transaction completely and we want to earn the customer relationship’ — which is totally understandable — ‘and we think that you could provide this technology to us and effectively teach us how to sell cars in this online modern way,’” Moss said, “but beyond that, we could scale the business tremendously by doing that.”

And that is exactly what the company has done. It is now in 14 different states — up from three as recently as December — and works with dealers of 16 different brands. Roadster signed its first dealer to Express Storefront on July 1 (Toyota Marin) and less than 10 months later, it had roughly 50 using the product.

One good sign is that net promoter scores measuring customer satisfaction are similarly high with dealers running the white-label model as Roadster had with the concierge model.

Since it is working through and with dealers, Roadster isn’t hampered by state franchise laws. Dealers also provide an in-depth knowledge of their respective markets and brands.

And once a store has the Express Storefront, the process of establishing that on a group-wide basis becomes easier. Then, a dealer group could have multiple brands for the shopper to choose from, thus providing an e-commerce experience through the entire group.

Price Simms Auto Group, which includes Toyota Marin, was the first group to utilize Roadster’s product and others have followed suit, including the John Elway Dealerships and the Paragon Group.