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Mobile startups hold potential to disrupt car buying: AutoNation exec

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October 16, 2015

AutoNation is ramping up on moibleRANCHO MIRAGE, CA – Automotive retailer AutoNation is investing in mobile to transform the auto-buying experience both online and in-store in recognition of how consumers’ shopping habits are evolving, said an executive at the Mobile Shopping Summit 2015.

While consumers in the market for a new or used car do not typically make a purchase on mobile right now, AutoNation believes smartphones will be a growing source of sales within three to five years. With mobile-first platforms such as Carvana and beepi hoping to disrupt the space, AutoNation realizes it needs to act now or risk being further disintermediated.

“Nobody is really buying cars online because it is a very complex process,” said JennyWatson, vice president of digital marketing and direct at AutoNation. “Auto retail is trying to catch up in terms of what to build for when they are ready to buy online.

“We do believe that in the next three to five years, consumers will be ready to go online and purchase,” she said. “Because it is such a complex thing to build, a ramp up is needed.

“We made a commitment to invest because we want to be able to change the way that cars are sold today. We want to disrupt an industry that has been doing it the same away for 150 years and we want to align with customers’ expectations.”

The comments were made during a keynote presentation at the conference titled Closing The Gap Between The Online And Instore Experience.

Mobile disruption
AutoNation owns approximately 300 dealerships.

While cars are getting more sophisticated thanks to new technology, the car salesman and car sales process has not changed much.

The situation is starting to change, with consumers really driving this. Apps such as beepi, Shift and Carvana are offering tools to enhance the car shopping and buying experience. These are technology startups that do not own inventory the way that AutoNation does. However, they are being funded and do hold the potential to disrupt the space.

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Additionally, the growth of Uber and other similar services is likely to impact how many cars consumers will purchase going forward. Research already shows that millennials are delaying the purchase of a vehicle.

For these reasons, AutoNation believes that annual car sales will slow in the future.

Pricing transparency
Mobile is also impacting pricing transparency in auto sales. Whereas previously there was little transparency, consumers conducting a lot of research online are better informed and expect consistency.

These consumers also come into a dealer well informed and want a more streamlined experience once they are there.

Consumers expect almost instantaneous responses when they submit a lead form online and are increasingly apt to click-to-call rather than have to fill out a form on mobile.

All of these factors underscore the importance of having digital assets available for when consumers are online or in a dealership.

Giving shoppers control
AutoNation’s response has been to build a series of tools designed to help the brand connect what shoppers do online to what they do in the stores with a centralized dashboard that they can log into.

“We are trying to sew all of the parts together in the hope that people will come to our sites, it will be so sticky that they won’t want to switching off of our platform and going to a dealer down the street,” Ms. Watson said.

Creating a mobile-driven online shopping experience has also enabled AutoNation to put the shopper more in control of the process, which has had a positive impact.

A number of the various steps involved in purchasing a car can now be completed online with customers then able to come into a dealer, authenticate who they are and pick up where they left off.

AutoNation claims to be the first automotive dealership enabling consumers to go online, place a deposit and reserve a car. That car is then removed from inventory for when they come in to complete the purchase.

The chain also offers something similar with car service, enabling customers to schedule an appointment and check prices from a mobile device.

“We started with bricks-and-mortar,” Ms. Watson said. “People underestimate the amount of effort it takes to tie the pieces together.

“Customers’ expectations are so low with auto retail that we can only improve,” she said.

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York

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