Adapt or Die: Auto Retailing Continues to Evolve in the Digital World

auto retailing

In the movie “Moneyball.” Brad Pitt’s character, Billy Beane, looks at a longtime Major League Baseball scout and says, “Adapt or die.”

The scout is aggressively challenging Beane, the Oakland A’s general manager, on using data to decide which player to sign to the team. “You don’t put a team together with a computer,” the scout tells Beane.

Using computer statistical analysis didn’t fall in line with how MLB teams and scouts had evaluated and signed players for many years, according to the scout. The old way works, not this new-fangled way.

Sound familiar? It should. While the scene in the movie is fictional, the scout’s mentality still exists today among a lot of dealers – “We’ve been selling cars this way forever, and its worked and will continue to work. This new technology stuff is going to fail in time.”

Still Haggling?

A lot of dealers out there can’t seem to shake the thought process that the only way to sell a car is by bringing a customer into the showroom for hours of haggling. They hold that view despite the emergence of technology companies making it easier for customers to avoid the experience.

Survey after survey has shown that car shoppers have generally grown weary with the typical car buying experience. They don’t want to sit with a salesperson for a long time and then be shifted to the F&I department for more haggling.

There’s a reason startup companies have sought ways to make it easier for people to buy cars –It’s called demand. And, that demand has shifted to doing more on the internet.

The corporate landscape is littered with companies that failed to innovate, change and adapt with the internet. Look what’s happening with Sears. Know where Blockbuster Video went? What about Circuit City? Each of those companies didn’t innovate or pivot when the competition from the internet arose.

The internet has been changing how the cars are sold since it began commercial expansion more than two decades ago.

Autobytel, today known as AutoWeb, started during the first internet boom with a business model that provided auto dealers with leads through its internet site. In 1997, the company was the first internet company to advertise during the Super Bowl.

About the same time, Scott Painter founded and later Both generate customer leads for new and used cars to dealers through their internet sites.

Decisions Made Without Visiting

The use of internet technology to drive sales has been evolving since, accelerating rapidly over the past few years to include mobile phone applications.

We’ve reached the point where a customer can choose a car and have it financed all through an app on their smartphone. They never have to step into a dealership.

Painter left TrueCar in 2015 and is back with a new company,, which looks like it could do some disruption in the auto leasing business. Through the company’s mobile app, customers can lease used cars. Again, all of the F&I can be handled without the customer going into the dealer.

Then there’s Roadster. Founded five years ago in San Francisco, it took online buying to new cars while everyone else is playing the used-car game. Initially, the company’s technology allowed customers to avoid the showroom by selling inventory to them from dealerships. Roadster served as a broker.

But the company pivoted two years ago after listening to dealers. It began offering Express Storefront to dealers so they could provide the modern digital buying experience directly to customers.

One of the selling points is protecting F&I dollars by automatically offering products and services that are tailored to a customer’s needs. Dealers in more than a dozen states have incorporated Express Storefront.

There will be Struggles

Not all of the companies who have jumped into the digital auto retailing fray will survive. Beepi, for example, was a highly touted peer-to-peer used-car marketplace, but shuttered completely last year. And now, Vroom appears to be struggling. It has laid off up to half its staff and closed a couple of operations. Three years ago, “Forbes” listed the company among the Hottest E-Commerce Startups.

Carvana struggled after going public last year, but has rebounded and now valued at more than $2.4 billion. That seems to indicate that the company has figured it out.

Others surely will follow while new ones launch with the hope of learning lessons from those that failed.

Meanwhile, big dealer groups have shifted to more online selling and financing. AutoNation, for example, started building out AutoNation Express several years ago. Sonic Automotive launched EchoPark three years ago for used cars, creating a standalone store that allows customers to buy online or visit. Sonic had record sales last year and announced plans to further expand EchoPark.

One aspect of all of it is clear – buying, selling and financing cars via a mobile app and the internet is here to stay. And the echo of “adapt or die” will be prevalent.

Do or Die

Train your staff on how to best engage with the customer earlier on through a digital process that meets the customer expectation.

It may be just as easy to provide the customer with the flexibility to self-desk, doing some of the heavy lifting on a dealership’s website prior to going into the dealership for delivery. Take the burden off their shoulders. Reduce the time the customer spends in the dealership buying a car and finalizing the transaction with a finance insurance manager or a single point sales associate.

The way this will work is to align your online experience with the in-dealership experience. Have the vehicle and paperwork ready for delivery. The customer comes in, test drives the car, works with the sales associate, and then finalizes the paper work with the finance manager and offering additional products. The customer is in and out of the dealership in less than an hour.

No matter how you slice it, customers have access to online tools. To keep up with these disruptors, dealers need to think outside the box and be ready to provide alternative solutions others won’t.