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I read this article yesterday, AutoNation is stepping up their game...

AutoNation's big digital push

Dealership group plans to spend $50 million to attract tech-savvy buyers

Written by Amy Wilson

Automotive News | October 1, 2012 - 12:01 am EST

FORT LAUDERDALE, Fla. -- AutoNation Inc. has poured $500 million into store renovations in the past three years. But customers still can't purchase cars as easily as they buy electronics at the Apple Store or books on Amazon.com.

 

That's why the country's largest dealership group is trying to remake itself. It wants to compete for the business of millennials and others who dislike traditional dealerships, including AutoNation's 215 stores.

 

"The move into the digital world is incredible," AutoNation COO Michael Maroone said. "People come into the e-com world looking for an experience they can get at other retailers, and it just doesn't exist in auto retail."

 

So AutoNation is investing $50 million during the next three years on new dealership Web sites, tablet computers in the service drive and a so-called new digital storefront. The vision: Speed transaction time and let customers control their shopping experiences, whether online or in the store.

 

It may never be as simple to buy a car as it is to purchase an iPhone, but auto retailers such as AutoNation are trying to close the gap. Other dealership groups also are using technology to go after tech-savvy customers who don't like traditional dealerships. Sonic Automotive, for instance, is putting iPads and iPhones in the hands of most dealership employees.

 

Test drives and bricks-and-mortar will always have their place, but many customers want to do as much online as possible, said AutoNation CEO Mike Jackson. To illustrate, Jackson points to what he calls the first moment of truth in any vehicle purchase -- when the customer provides contact information. Today, that happens electronically in one-third of AutoNation's vehicle sales, and that ratio will only increase, Jackson said.

 

Customers are "empowered, and they have choices this power has given them like never before," Jackson said. "But they're impatient and time constrained. They want things simplified, and they want technology to do that for them."

 

That means AutoNation must provide that experience or those customers will buy their cars and have them serviced elsewhere. Helping Jackson and Maroone are three executives hired or promoted in the past year: Alan McLaren, Dave Koehler and Greg Revelle.

 

'Scotch tape'

They have big obstacles to overcome. In the way are multiple technology platforms "hooked together with Scotch tape," Maroone said.

 

Handling a service appointment, for instance, means moving among multiple vehicle inspection systems, the customer relationship management tool and the dealership management system. The resulting complexity is "brain damage for our employees and our customers," said McLaren, senior vice president of customer care.

 

The proposed solution: Get the systems talking to each other in the background. When a service adviser greets a customer in the drive with a tablet computer, the adviser will automatically see the customer's purchase and service history and any rejected repair work. A customer can even pay in the drive instead of waiting in the cashier line.

 

That approach will be tested with pilots starting in November. The company plans to roll out service tablets to all of its stores in 2013. Other big retailers also are using or experimenting with tablets in the service department.

 

AutoNation will build a proprietary system to manage the customer experience, setting up the digital storefront and new dealership Web sites. Maroone calls the $50 million outlay the biggest information technology project in company history.

 

Think of the AutoNation system as a hub surrounded by spokes, many of which will be filled by vendors, said Revelle, senior vice president and chief marketing officer. The key will be integrating the system with AutoNation's dealership management system, which is provided by ADP. Other vendors will be asked to provide a la carte services.

 

Details are sketchy, but the ultimate goal is to link the online and bricks-and-mortar worlds. In other words, when the customer who shopped online at midnight in his pajamas comes to an AutoNation store the next day, staffers could have selected cars ready for a test drive. If the customer initiated an online trade-in, the store could be ready for physical inspection and finalizing the transaction.

 

"We believe customers need to be able to find a vehicle, an exact price, build their own menus, get their own payments, appraise their own trade, if that's what they want," Maroone said. "And all that work that's been done online needs to be easily accessed in the showrooms."

 

Leading the digital charge
Dave Koehler
Title: Senior vice president of sales
Age: 45
Big task: Prepare dealership staffs for the changes

Alan McLaren
Title: Senior vice president of customer care
Age: 46
Big task: Introduce tablets in the service drive

Greg Revelle
Title: Senior vice president and chief marketing officer
Age: 36
Big task: Oversee the new digital storefront

 

15-minute delivery?

Customers will control how much information will be shared, Maroone said.

 

Cutting transaction time is a main goal. If most decisions are made online, Maroone said, it ultimately could take as little as 15 minutes to finalize paperwork and deliver the car. Today, the traditional process takes two to four hours depending on the day of the week.

 

The digital storefront and revamped Web sites are expected to roll out in the first quarter of 2013.

 

The investment means change for dealership staffers. Koehler, senior vice president of sales, is getting them ready. Managers and salespeople are being trained to reduce transaction times.

 

3-year search

Finding Koehler, McLaren and Revelle was phase one in reinventing the customer experience, Maroone said. It came after three years of interviewing candidates inside and outside the industry.

 

Koehler came from Sonic Automotive in April 2011. A runner who hits the pavement before sunup and is in the office by 7 a.m., Koehler initially was hired as a market president, and promoted to the top sales job in late 2011.

 

When Jackson learned McLaren was leaving Mercedes-Benz to return to his native Australia, he called and asked, "If I make you an offer you can't refuse, will you stay?" It worked. McLaren, who oversaw Mercedes customer service and the company-owned flagship store in Manhattan, started in January. Like Koehler, he spends a lot of time at dealerships and is typically among the last to leave the office each night.

 

Revelle, a former executive at Expedia, a travel Web site, was hired in April. Jackson felt he needed someone with online experience to lead digital investment. A Seattle Seahawks football fan who studies game strategy, Revelle analyzes various possible outcomes of a business plan before making a move.

 

The three lunch together once a week to trade ideas. They are in their 30s and 40s, but this is not a race to determine who will succeed Jackson, 63, and Maroone, 58, company leaders say. Maroone and Jackson say they intend to stay for the long term. They want to see the customer experience change on their watch.

 

Said Maroone: "Both of us are very committed to the business and seeing this through and to delivering to the customer a remarkable and unique automotive retail experience."

 

IT investment
Autonation wants to reinvent the customer experience with technology.
Budget: $50 million
TImetable: 3 years
Goal: Speed transaction time, let consumers control their shopping experiences

 

SOURCE: http://www.autonews.com/apps/pbcs.dll/article?AID=/20121001/RETAIL0...

Views: 1562

Tags: Alan McLaren, AutoNation, Automotive, David Koehler, Digital Push, Gary Revelle, Marketing, Michael Maroone

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Comment by Ashley Lopez on October 3, 2012 at 8:50am

I was thinking the same thing Andrew Compton ---Bobby you are right, we have customers come in every day that they would rather drive the 15-20 minutes out of the city to have the service they receive with us...but it still stumbles us that the AutoNation store in our area trumps everyone else's sales for the month...People tell us day in and day out that they were on the lot for 15-20 minutes before anyone EVER walked up to them...but they are selling more cars than the other dealerships in our area?

 

I am really curious to see how this new technology plays out for AutoNation...I agree with Tom that customers are just looking for a seamless operation---they want to know that they can come in to a dealership, do a quick look of the vehicle of their choice and then walk over to F&I where all their paperwork is ready for them...

Comment by Andrew Compton on October 3, 2012 at 8:22am

Very interesting.  Auto Nation is making a $50 million dollar bet they can "build a proprietary system to manage the customer experience" better and faster than anything currently in development. Click Motive was purchased for $47 million yesterday by Dealer Track.

Comment by Bobby Kullman on October 3, 2012 at 6:51am

People will always buy from people they like and trust. I admire AutoNation for the investment, but you can't forget about the one-on-one interaction our business is built on. We have just started using the Ipads in sales and service at our dealership, but it still comes down to a sales persons relationship with the customer if the deal gets done, or the service writers interaction on how they handle the concerns of the customer on whether or not they ever come back or buy from your store. Technology may make it easier, but it will never replace this in any business. 

Comment by Tom Gorham on October 3, 2012 at 4:56am

I think what everyone is looking for here is a seamless operation.  If a customer requests a quote on a particular vehicle, does an online trade evaluation and finance application, the dealership should be prepared when that customer comes in and the transaction can perform smoothly and and quickly... theoretically. 

Online service appointments should be a done deal for the customer and service aisle interactions should be fingertip simple on the iPad or tablet IF the tablet app integrates seamlessly with the data management and CRM tools. 

The real key is total integration done properly by trained and skilled staff. Currently, we have "multiple technology platforms hooked together with Scotch tape," as stated in this article.  Most of them do not play well together.

Comment by Roosevelt Gist on October 3, 2012 at 2:38am

It must be nice to have that kind of money thrown at technology when it's been documented that the phone contact is a money saver if handled properly. Even with better information about the customer the person accessing and presenting this information must be professionally trained to understand the data in hand.

Comment by Doug Davis on October 2, 2012 at 7:51pm

Of all of the large automotive groups, AutoNation does the poorest job of marketing their cars.  Of the four metro markets that I have worked in, AutoNation didn't have a market leader in any of them.  I've been recruited by AutoNation but never worked for them.

Wasn't it about two years ago that we heard how AutoNation was going to reinvent their used car business?  I didn't see major success stories coming from that.

I haven't seen any of the market leaders coming from the large groups.  Most of what I have learned has come from trial and error.  I worked in an environment that encouraged that.  Groups don't like mavericks.  They stifle creative thinking and new ideas.  There is nothing like a bunch of MBAs, in Florida, telling people how to sell cars, when they have never done it. 

It will be interesting to watch.  What will take them three years to accomplish, the rest of us could duplicate in three months.

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