McKinsey’s latest survey is required reading for people in our business. The first section is a recap of things we already know about customers going online, but the last ten pages are dynamite. They model the impact of their ideas on a sample dealer network, increasing its gross profit by 3 to 5% (your actual mileage may vary).
McKinsey’s ideas include superstores, test drive centers, pop-up stores – and an array of online “touch points” already familiar to my readers. These ideas are presented from the perspective of an OEM, but would also be relevant to a large public group. Weak dealerships are converted to service centers.
One in three customers would buy a car online, according to the study, which cites the “unpleasant experience” of haggling over price. This is where old school dealers have really hurt the industry. I have long been an advocate of a more transparent process – what you might call the Best Buy model. Now, we can look forward to a business more like Amazon.