As the direct-to-consumer and peer-to-peer side of online car-buying moves into high gear, so too does the dealer segment of e-commerce.
And count Asbury Automotive Group, one of the nation’s largest and publicly traded dealer groups, among those.
Asbury has been offering 100-percent online car-buying at select stores through an e-commerce solution from San Francisco-based Drive Motors, though doing so relatively quietly.
The startup provides dealers with software that facilitates direct-to-consumer sales on the dealership’s website. With this white-label solution, the customer goes to dealer website to buy. Dealers are charged a monthly fee to use the software.
“The industry is changing, and I think it’s changing for the good. Similar to when we didn’t post car prices online 10-15 years ago, and now obviously it’s common standard ... if you don’t do it, you get left behind,” Asbury director of marketing Miran Maric told Auto Remarketing earlier this month.
“When we look at it, it’s mainly about respecting the customer and the amount of information that they want and what they need,” he said.
Aaron Krane, Drive Motors
Drive Motors was started about a year-and-a-half ago, says its chief executive officer, Aaron Krane. The online car-buying service has been available for about six months, he said.
Krane said he wanted to take the “opposite approach” to what's commonly referred to as disrupting the standard auto dealer-based car sale.
“And I decided I’m going to build a technology company that’s in Silicon Valley, but we’re going to work with the dealership,” Krane said in a phone interview this month. “We’re going to make them our primary customers. And we’re going to give them the ability to offer the solution to consumers.”
He said he has researched and watched other endeavors in this space and came to this conclusion: “If you would like to solve this problem for consumers, you must empower dealerships to do it.”
Krane added: “Because dealerships, they have a regulatory control on the market. Furthermore, they’re incredibly valuable as customer service centers and as showrooms and as, well, all of the functions they provide.”
As Krane explained it, the process appears fairly straightforward. The shopper finds the car on the dealer’s website and has the option to buy online. If he or she selects that option, there is an online check-out process that comes across from the right side of the page, keeping the customer on the dealer’s site.
That check-out process includes the option for add-ons, trade-in and the desking/finance portion. The delivery of the vehicle is up to the dealership. Dealers have the option to require in-store pickup, but Drive Motors recommends delivery.
Delivery mileage is also up to the dealership.
The service is available for both new and used vehicles.
“People will buy used cars with online checkout just as readily as new cars,” Krane said.
He declined to reveal the number of dealerships Drive Motors is working with but noted that more than 30 brands are represented and that it’s across the U.S. on “tens and tens of thousands” of vehicles.
Of course, one of those utilizing the platform is Asbury.
Maric, the Asbury marketing director, said the process for his group started six to seven months ago when he began discussing the project with Krane.
The group quietly launched it at three stores to test the platform out. Asbury wanted to gauge the impact before putting any marketing behind it
Maric said that typically, combined traffic for all of Asbury’s dealership websites is around 2 million unique visits per month, so the group picked high-volume traffic stores for the tests.
The group wanted “to see if consumers would even go down this route.”
Initial results were positive, so the group conducted some A/B testing and utilized some SEO/SEM tests.
“Our hypothesis was correct,” Maric said. “We were able to prove out that they would.” That is, go down the route of buying a car completely online.
Asbury started expanding the 100-percent online car-buying to other stores, and Maric said the group has at least one store using the Drive Motors platform in all but one of the states in which they operate.
A larger rollout is planned, he said.
Of course, it is still on a relatively small scale. In July, Asbury sold just under 75 vehicles entirely online through the Drive Motors platform.
But, Maric said, the numbers are likely much higher for folks who perhaps used the online platform for part, but not all, of the buying process (which, by the way, consumers can do).
And keep in mind, Asbury hasn't been chatty (publicly, at least) about this program, Maric said. There hasn’t been a marketing push.
As for delivery, Maric said it’s different from store to store within Asbury.
Most of Asbury’s stores in major metropolitan areas keep the mileage limit to 100, but that is flexible/negotiable at each store.
So, what is the next step in this process for Asbury?
“As the states and as the lenders — and as the OEMs — get more comfortable with signing documentations 100 percent online, I think the next relevant step that we’ve talked about with Aaron (Krane) and some of his teammates is really including docu-sign and some of the additional items in place that we might be prohibited by maybe a certain law in a state or a lender or whatever it is,” Maric said.
“That’s slowly changing now because the OEMs are now really starting to push a lot of the e-contracting, if you will,” he said. “So, you’ll start to see more of that and you’ll start to see us expand into, for the most part, all of our markets.”