With all the hype Internet retailing has received in the automotive industry, one would think that sales people will disappear from showroom floors like so many intergalactic aliens.
But it's time to re-examine this view of cyberspace nirvana. The truth is that purchasing vehicles on the Internet will never completely replace the conventional process of interacting with a retail dealer, at least not in our lifetimes.
Substituting the Internet for conventional dealers or retail stores would not only be ineffective, but could wind up dissatisfying the consumer. Granted, web sites, such as Car Point and Auto-By-Tel, are flourishing.
But despite the rapid growth in popularity of these Internet services, many consumers that use them still visit a dealer during the shopping process to "experience" the vehicle they are interested in. This ranges from test driving the product to looking at a variety of color and option combinations.
After buyers make a decision, then they use the Internet services to bypass the "dealing process," which is highly intimidating to many buyers. They still, however, have to go to the dealer to finalize the transaction.
But Internet buying services are addressing the symptoms of the disease of automotive purchasing, rather than curing it.
We believe that the approach that will ultimately succeed is one that better connects the retail store with the Internet. Our research shows that consumers still like to "touch, smell, and see" products before they buy, especially items such as clothing that usually require inspection before purchase. This is why the Internet has not proven to be all that successful with retailers that market clothing or a variety of other soft goods merchandise.
Future generations will want the ability to visit a retail store or facility to experience the product they are interested in first-hand with the ability to gather competitive information and even final purchase of the sale "on-line".
Many prospective car and light truck buyers enjoy the process of visiting a dealer to inspect and "test drive" a variety of models, they just deplore the purchase process - including the increasing amount of paperwork that needs to be filled out to complete the transaction.
We envision an environment where automotive retailers become larger and more sophisticated from a brand standpoint. These "new age" dealers eventually will move to common pricing. No longer will it be so easy to hit the web site and find the dealer in Montana who will sell you your Dodge Ram at $4, 000 less than the dealer in your hometown. In addition, these higher-volume mega-stores will be able to provide customers with the exact vehicle they desire within 72 hours.
The automotive retailer of the future will become more of a destination unto itself. Through architectural design and services such as food courts and coffee bars, they will sell the shopping experience as well as the vehicle. The idea is to provide a positive experience for the shopper that reinforces the power and image of the brand being sold.
The Internet, however, will become an increasingly important component in the retail process. The customer of the future likely will use the Internet to gain competitive knowledge about the product he or she is interested in and then visit a variety of retail centers to drive it. Once they have made their decision, they may complete the purchase at the dealership or via the Internet, where they can fill out the avalanche of paperwork in the comfort of their own home.
The bottom line here is that the Internet likely will evolve into a very different tool in the future than it is today. Cyberspace will never be able to satisfy the visual and tactile dimensions on which people must experience something as important to their lives as a new car or truck.
The challenge for automotive manufacturers is to develop a retail approach that provides customers with an enjoyable experience. Remember, consumers love to shop and experience the merchandise. You take that away from them at your own peril. - Chris Cedergren is managing director of Nextrend, based in Thousand Oaks, CA.