In a recent yet-to-be-published study, fewer than 35% of people surveyed said they would prefer an online trade evaluation or finance process as opposed to in-person. In that same study, only 15% of those surveyed said they would prefer buying their car online versus in-person.
When you do the math, these are H-U-G-E numbers. If 15% of auto shoppers say they would prefer to buy their car online, that is plenty enough for companies like Carvana, Clearshift, and Roadster to exist. With nearly 60 million vehicles sold each year to consumers in the United States, that’s about 9 million transactions.
Friction in the Shopping Cart
Reality is, we don’t need studies and surveys to know that there is a lot of friction for auto shoppers to make a vehicle purchase. Practically every adult in the US has had at least one chance to experience the friction themselves.
Case in point…my last vehicle purchase took me 7 hours at the dealership. Now, this had more to do with my finicky shopping interests than it did the dealer’s process, but remove my “finicky” factor and we were easily looking at 3-4 hours. Not to mention the fact that I had to go back in a week later and re-write the deal because the original deal was written up incorrectly and got rejected by the bank.
Not including the drive there and back, that was an additional 90-plus minutes. And yes, I would have much preferred being able to do that digitally and online.
Panel Discussion with Carvana, ClearShift, and Roadster
Auto shopping, buying, and owning a vehicle today is changing drastically right before our very eyes. We all know it and we are all adapting to it – not only as industry insiders but also as consumers ourselves. So when the team at CarGurus invited me to moderate a discussion panel at their inaugural Navigate Conference in Boston this month, I agreed.
On the panel are:
- Jeff Miller, Carvana VP of Strategic Partnerships
- Jeff VanderWal, ClearShift Founder & President
- Rudi Thun, Roadster COO
The focus of the discussion will be on the differences and similarities that each of the three companies sees in shopper behavior, such as online activity, friction, and crossing the bridge to transaction.
Get $300 Off Registration to Navigate ’19
As part of an exclusive arrangement, CarGurus is extending a $300 discount off registration for AutoConverse Subscribers. Tickets are priced at $695 each but as an AutoConverse Subscriber your price is only $395 when you enter our promo code AUTOCONVERSE upon registering. This is a 43% savings just for being subscribed to AutoConverse.
Video Overview of Navigate ’19 Conference with Ashley Karr
For an overview of the conference, check out last week’s MTC Show that featured CarGurus Head of B2B Marketing Ashley Karr where we talked about the the Keynote Speakers – Guy Kawasaki and Daymond John – the breakout session, and the exclusive Women at Navigate Dinner.
Why These Companies?
Carvana is unique in that it is a national brand with deep pockets, buying and selling used cars with an emphasis on reducing or eliminating that aforementioned friction with an online-only process. The company debuted at number 8 on Automotive News’ list of the top 100 retailers based in the U.S. ranked by used-vehicle retail sales in 2018. Carvana retailed 94,108 vehicles in 2018, more than double what it sold the year before, and the company was not on the 2017 list.
If you were to use the 15% value from the CarGurus study as the number of people who would prefer to buy their car online rather than in-person, this means that Carvana has only tapped into about 0.01 percent of its potential market share.
Please understand that this math is based on numbers in a study and in no way should be considered as viably calculated market forecasts and projections. I’m only using them to illustrate a point. This is probably why Carvana investors remain excited despite $250k-plus quarterly operating losses. They are gaining market share, lots of it, quickly, and there’s a lot of market available, and it’s growing.
ClearShift is akin to Carvana in that it too is buying and selling used cars with an emphasis on reducing or eliminating friction with an online-based process. The differences however are that a) ClearShift is not a national brand. It serves a regional market – Rocky Mountain Region; and b) it is not a public company with infinitely deep pockets. In fact, ClearShift, like traditional brick and mortar dealers, must operate with a profit.
Roadster, which was founded in 2013 and came to market initially as a consumer-facing brand now provides consumer-driven omni channel commerce solutions for dealers with a proprietary technology platform. With Roadster, dealers can provide “hassle-free” car buying in-store, online, and on the go. From inventory merchandising, to financing/leasing, incentives, trade-ins, service plans and accessories.
Submit Your Questions Below for the Q&A
Use the comments section below to chime in with your two cents on the subject. And if you have specific questions for the panelists that you think would make the discussion engaging, post them here in the comments section before Wednesday October 23rd. As the moderator, I will state your name and ask your question either during the Q&A segment, or during the conversation.