Research suggests car buyers will be increasingly willing to forego the money-saving ‘dealership haggle’ in return for the heightened convenience of buying online, says Holden.
The brand today announced a click-and-collect online retail model to be piloted in Melbourne, in partnership with its dealers, walking buyers from research to delivery of their wheels, with finance and trade-ins sorted on the way.
Modelling suggest that 30 per cent of consumers are already willing to buy a car online - particularly among younger demographics - and that this proportion will only grow.
The scheme will see dealers retained as the point-of-contact (contrasting it to, say, Tesla), and they will sort delivery and servicing, meaning they won’t be cut out of the process entirely.
Indeed, the pilot could see dealer foot traffic fall to more sustainable levels at peak times, through the initial take-up of online buying is expected to start low. In time, there may be fewer sales jobs, but it’s early days.
“We work with a subset of the dealers and they’re pretty excited by it. They’re the backbone of the whole online experience. The trade-ins, delivery and servicing, they keep the customer relationship,” Holden managing director and chairman Mark Bernhard told us today.
One obvious downside for buyers (though naturally not for Holden and its franchise partners) is the lack of scope for haggling on purchase price. In time, a system where franchise dealers can ‘bid’ for a customer by matching or bettering one another’s offers is expected to emerge, but for now it’s pay-as-you-see.
“The research would say, people are prepared to pay a no-haggle price [in return] for convenience,” Bernhard said.
This may well be the case on new, high-demand metal like Commodore VXR, but one look at the classifieds tells you that very few people are paying RRP for an Astra at the moment…
Does a projected growth in online retail mean people don’t care about test drives anymore? You may recall that Holden is commendably offering 24-hour test drives for buyers, a scheme it calls the ‘Take Your Time Test Drive’.
“That’s a small subset…” Bernhard said. “We still think test drives are a critical element.
“Over time we’d like the 24-hour test drive to evolve to be part of the online experience, and get the cars to customers. That’s the next step in the process.”
The online retail is one of many moves Holden has made to set its retail experience apart, now that it no longer makes cars here.
Last November, the newly fledged sales, marketing and development company announced it would co-fund a circa $200 million cash injection, with its franchise dealers, into its 200-site network.
The company parted ways with some franchise dealer partners in recent times, some metro and some regional.
“At the end of the day it was a footprint review for us to make sure we have the right size network for the volume we want to deliver,” Bernhard said.
That’s code for ‘we had too many dealers given the number of cars we think we can sell in the future’.
Holden also leads in the ride-sharing space with its GM Maven service, and will soon start to roll out its OnStar subscription suite, bringing a 4G WiFi hotspot link to the car, an ability to locate the vehicle, remotely start it, perform remote diagnostics, and provide emergency call assist.