Innovating Automotive Retail

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.