DR and Public Dealer Groups

In today’s post, subtitled, “the good, the bad, and the ugly,” we look at where the Big Six public dealer groups stand on Digital Retail.  Some of them get it, some of them don’t, and others have missed the point.

“Once they start the process online, customers tend to buy a car at a much higher rate than … walking into our showroom” – Daryl Kenningham, Group 1

It’s not essential to spin up a distinct site, though many have taken this approach.  It’s a clever way to get in the same space as Carvana.  Thus, we have new brands Driveway, Clicklane, and Acceleride.  For example, you can enter Group 1’s DR process from either Acceleride or the Group 1 site. 

  • Penske – Penske started experimenting with DR way back in 2015 and something called Preferred Purchase.  Today, it’s still called Preferred Purchase, but it’s the DDC Accelerate system.
  • Group 1 – GP1 recently (2019) launched a Roadster implementation called Acceleride.  It is now selling more than 1,000 units per month, including new cars.  This is the top initiative in their investor deck, clearly showing management attention.
  • Asbury – Asbury was also an early adopter, starting with Drive (2016) and now their own Clicklane offering.  By my count, this is their third experiment – exactly what you want to see with digital transformation.
  • Lithia – Lithia has a branded DR site called Driveway which, unfortunately, requires users to create an account before entering the process.  As I wrote in Design Concepts for Online Car Buying, you don’t create an account until the customer is ready to save a deal.
  • AutoNation – AutoNation has made strategic investments in DR vendors like Vroom, and launched its own AutoNation Express in 2014.  As with Driveway, step one is a lead form.
  • Sonic – Sonic announced a plan to use Darwin but, alas, there is still no sign of DR on either the Sonic or EchoPark site.  Maybe the new eCommerce team will fix that. 

I can understand why new-car dealers might want to start with a lead form.  New cars are commodities, and vulnerable to price shopping.  This is where used-car dealers CarMax and Carvana have an advantage.  Otherwise, DR requires a strong commitment to price transparency.

Digital Retail is synergistic with modern sales practices, like one-touch and hybrid teams.  Sonic is the leader here, and has the highest used-car ratio, so you would expect them to have an edge.

Finally, it’s hard to sell protection products online.  Groups with growing DR penetration are likely to see reduced PVR.  This has long been a knock against Carvana.  Experts agree that the solution here is an AI-based “recommender.” 

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