Other than certain medical examinations, one of the experiences consumers dread most is buying a car.
From being interdicted on the sales lot by a zealous salesman through haggling over the price and signing financing agreements in a back office, the experience for car buyers is rarely a fond one.
Relief, or something like it, could be the way. White River Toyota in White River Junction is test driving a new system designed to reduce the customer’s haggling with sales staff and shift much of the buying process to — where else? — online.
“The whole goal here is to be able to buy a car from the couch at home,” said Jason Quenneville, general manager of White River Toyota, the Toyota dealership on Sykes Mountain Avenue. He said the new online sales platform aims to help do away with “that stereotype of the old, sleazy guy selling you a car” and instead seeks to make car buying “a fun, transparent experience.”
White River Toyota is one of only three of Toyota’s 1,500 U.S. dealerships that have been selected by the automaker to pilot the online marketing and sales system (the others are in Denver and Kansas City, Mo.), according to Quenneville. Called SmartPath, the online program is developed internally by Toyota and enables buyers to complete most of their car-shopping process online — such as purchase and lease options, trade-in valuation and financing plans — rather than, as traditionally, at the dealership.
Of course, online sales in the auto industry is nothing new. A prospective buyer can go to the website of any local dealer and see model and sales information and begin the purchasing process. But White River Toyota staff says most online platforms are designed to tease the customer into the showroom for the old-school hard sell and closer, while Toyota’s will provide the full raft of information and options required for the purchase.
Although SmartPath for now still requires the customer to come to the dealership to finalize their purchase, the online platform is intended to “eliminate the back-and-forth” customers experience when the sales agent runs back to the manager’s office to get signed off on the “best price,” a familiar scene for car buyers, said Bill Severance, a sales manager at the dealership. Instead, by the time the customer shows up at the dealership, they have a record of the price, purchase or lease option and financing plan that they selected spelled out in fine detail, he explained.
A spokeswoman for Toyota Motor North America said that Toyota did not want to comment at this time about SmartPath, “since this platform is still in the early stages.”
The company’s new digital platform comes as auto dealerships have been caught up in the same online shopping tidal wave that has disrupted all sectors of the bricks-and-mortar retailing economy. Younger consumers adept and comfortable with technology now regularly buy homes and get mortgages online, both milestone events that once were done only face-to-face.
National pre-owned vehicle dealers like CarMax sell cars online and deliver them to the buyer’s home. AutoNation in late 2018 invested in online car reseller Vroom. Sites like these are pressuring traditional car dealerships to adapt by matching the convenience.
Also, dealers are seeing the growing clout of services like TrueCar, which negotiates and purchases the car on behalf of buyers from dealerships and cuts into the dealer’s market share and profit. Forward-looking Tesla has forgone the dealership model altogether and sells its cars only online (even the vehicle’s owner’s manual is available only online or via the car’s touchscreen).
Then there’s Amazon, which already sells auto parts and accessories online, but dealerships are warily watching for when it makes the logical next leap.
As a result, automakers are searching for ways to respond to tech-driven consumer preferences while still preserving the dealership system for what it does best, such as being a destination to test drive vehicles and providing mechanics who can service increasingly complicated and computerized vehicles.
Last year, during the annual Toyota dealership’s meeting in Dallas, Jack Hollis, group vice president and general manager of the Toyota Division, emphasized the critical role that the online sales platform would hold for dealers in the coming years, according to Toyota Today, the company’s in-house publication for dealers.
“There’s no going back,” Hollis told the dealers. “We must adapt or risk becoming extinct. Recent studies report that most consumers want online shopping tools to improve time and transparency of the sales process. But almost all of them still want to complete the transaction at the dealership, which is why we have invested in our SmartPath.”
Quenneville said White River Toyota caught the eye of Toyota as a location to pilot SmartPath because the dealership has pioneered several innovations in recent years that have proved successful. For instance, the dealership eliminated the dealer markup in the interest rate charged to customers — standard practice in the industry — which saves customers money in financing costs but forgoes profit for the dealership.
“That was huge, no one does that,” said Kelly Morrissette, a sales manager. “But it makes customers come back.”
Other “culture changes,” Morrissette pointed out, have included a “cruise-the-lot” program where prospective car buyers are provided a master key mechanism that works with any car on the lot so they can take one out for a spin, come back and take another, and another — all without having to be accompanied by a salesperson riding shotgun.
All 14 sales “consultants” on the floor have to be conversant in technology, too – they regularly reach out to prospective car buyers online with personal video emails. Although technology historically has replaced people in jobs, Quenneville said sales staff will remain critical to shepherd the higher volume of sales he expects the online platform to generate.
It once was the case that a customer would visit dealers multiple times before reaching a decision to purchase a car, Quenneville said. But now, because of all the information and comparison data available to car shoppers online, the average has been reduced to 1.6 visits before purchase.
Still, as much as Quenneville said he expects car buyers to embrace Toyota’s online sales platform, he acknowledged it won’t be to everyone’s liking. Some will prefer the traditional method of buying a car.
“There will always be people who like to come in and negotiate,” he said.
John Lippman can be reached jlippman@vnews.com.
