E-commerce gains perspective at Chicago conference

CHICAGO - Dealers and manufacturers are gaining experience with electronic commerce - and its impact on the automotive industry is beginning to take shape.

That was the theme of the first eAuto World conference, held here June 19-21. Dealers, manufacturer representatives and service providers for perhaps the first time were able to report on actual experience dealing with Internet customers. They followed that up with forecasts.

Brian Kelly, president of Ford Consumer Connect, addressed the conference via satellite. He discussed what he feels are the main myths and realities of the Internet.

The first myth is that dealers will disappear or be minimized.

"There was a lot of discussion eight to 12 months ago that dealers would not necessarily go away, but their role would be marginalized," Mr. Kelly says. "In fact what were seeing in reality is exactly the opposite. We're seeing a real renaissance occurring in retail. The best com-bination of clicks and bricks wins."

He says in the future, Ford wants to work in conjunction with its dealers to improve customer satisfaction.

Another myth is that Internet-driven build-to-order vehicles will dramatically alter the industry.

"We think reality will be that build-to-demand will drive the real efficiencies in the next five years," he says. "We mean actual consumer demand driving what our plants build. Consumer demand driving what dealers order and stock on their lots. We're very close to being able to get pure, unadulterated, unedited consumer demand into our plants to be able to begin that process.

"A build-to-order system is going to take quite a bit of time to work through the automotive infrastructure," says Mr. Kelly. "All the automotive plants, the supply chain, all of those systems that are embedded in the industry will have to change dramatically. We will see that occur, but we won't see it occur dramatically in the next three to five years."

Yet another Internet myth that Mr. Kelly attempts to debunk is that it only is going to be used by customers to gather information.

"A year from now or two years from now, we'll see customers a little more confident and comfortable getting on the Internet and going farther down the chain," he predicts. "The better they get at buying books on-line and the more comfortable they get buying clothes on-line and doing banking transactions on-line, the more likely they are to do the same in the auto industry."

Mr. Kelly says the debate between manufacturers and dealers about whom "owns" the automotive customer is misdirected. It's his contention that the customer is in charge.

"We think the debate between dealers and OEMs about who owns the customer is outdated," he says. "The only answer is the consumer owns us. The argument shouldn't be who owns the customer or who owns the database, but how we, collectively can give the best satisfaction to the consumer."

Mr. Kelly also says that the auto industry should change its view on customer satis-faction. "You have to prepare for the age of the never-satisfied customer."

Another myth he explored is that the Internet can transform brands or products into commodities.

"The reality has become such that it's the branded community itself that will become added value," he says. "When you look at brands themselves on the Internet the clutter is tremendous. What's really important is to stop thinking about building your brand and start thinking about building the community of users, the community of consumers that are part of the brand."

Dealers discussed their experience with Internet customers. Bob Tasca III, vice president of Tasca Ford Sales in Rhode Island says his store has implemented a process he calls TIPS.

That stands for traffic, interactive web site, process and sales.

Mr. Tasca says dealers should use one web site for all of their brands to improve traffic on the site and to leverage advertising.

He also advises dealers to use third-party lead generators and to educate the staff on the importance and benefits of the web site.

Once a customer gets to the web site, it should be interactive and easy to use, Mr. Tasca says.

"We've taken our home page and made it very simple," he says. "We have three main categories: research, inventory and express quote. The accuracy on this information is key.

"You could have a terrific web site and a ton of traffic, but if you don't have the internal process at the dealership, it won't be successful," he stresses.

He says a dealership should establish a dedicated place, dedicated people and a dedicated pay plan.

"Our Internet coor-dinator's main responsibility is to set up an appointment, period," he explains. "The best thing you can do is set up an appointment and get the customer in the dealership so we can start to build value in the relationship."

He notes that the dealership uses menu pricing and that the prices are the same for Internet customers as anyone else.

The Tasca dealerships follow up the sales process by setting up personal web pages for their customers. They also established a relationship development center. That follows up all sales customers seven days after delivery, and every 90 days thereafter. The center calls service customers 48 hours after they pick up their vehicles.

* In addition to their own websites, more than 50% of dealerships in 1999 subscribed to one or more third-party Internet shopping service, such as Cars.com and MyDealerKid.com. That's up 31% from 1998.

* Fully 97% of dealers with websites have dedicated staff to maintain and monitor their sites; and 95% assign salespeople specifically to handle Internet-generated inquiries.

* The median percentage of salespeople using e-mail to communicate wih customers is 10%. More than one-fourth (26.8%) of dealerships are without e-mail capability for their sales staff.