Future Headline: Disney and Google Partner to Buy 100 Auto Dealerships
This article originally appeared on Driving Sales but I wanted to share it with the Dealer Elite community.
(I recently entered a time warp which took me two years into the future. While there I read this article in the March 2016 issue of Automotive News.)
9:45 am U.S. ET | March 15, 2016
This week Google and The Walt Disney Company announced their partnership to establish a new company, Disney Motorcars, which has agreed to purchase 100 new car dealerships in five states. They plan on announcing these locations over the next month as legal documents and filings are completed.
The franchises include domestic, Asian, and European brands and are located in large markets or within 30 miles of metro areas. Disney long known for their focus on the customer experience saw an incredible opportunity that auto dealers failed to capitalize on, even though many dealers completed the Disney Experience Training programs.
Don Duckhouser, Chief Communications Officer for Disney said, “In our opinion it was pretty clear that the majority of auto retailers were hiding behind technology and not focusing on extending relationships to build networks of customers and prospects. Their high employee turnover and lack of respect for their associates indicated to us that implementing a “Disney Process” could retain the best employees, provide a great work environment and still provide personalized service to the auto buying public.” He continued, “If we can get folks to pay $100 a day to ride a few roller coasters and keep them happy while they wait in line an hour for a four minute ride, then selling cars and trucks and providing customers with a stellar experience is a no-brainer.”
Google will provide expertise and technical resources to insure a smooth sales process. Ken Searchwright from Google Automotive Marketing shared his vision of the new stores; “We have designed a simple, friction-free, transparent process that will excite customers, attract a new class of employees, and restore the reputation of auto retailers. Our marketing will be local, organic, socially conscious and not reliant on price or promoting ridiculous trade-in values.”
He continued, “While our operations rely on the latest technology the work environment will be very attractive to employees, offer a powerful home/work balance, and create generous incentives for revenues from repeat customers, their friends and family members. A ramped up level of networking will replace most of the traditional advertising and all media messaging will be consistent across all channels.”
Existing media properties and online channels of Disney and Google will feature interactive advertisements promoting these dealerships; and other tie-ins will be rolled out over the coming year. Naturally Google's team will manage search optimization, online ad placement, and all the data mining to reach in-market customers.
When this reporter spoke to auto industry executives many would not speak on the record, but one individual shared, “For years we have tried to encourage, push, and cajole our retailers to improve their sales process and employee retention. Many just didn’t seem to want to move in that direction, so as manufacturers with a brand to protect we are aligning with companies that value the customer experience and transparency.”
Article written by Marty McFly (mcfly@autonews.com)
(note- this email will not exist until two years from now)
I invite you to share your thoughts about the likelihood of some dynamic shift from outside the auto industry moving in to auto retailing and changing the game.
Replies to This Discussion
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Permalink Reply by Ian nethercott on
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Hello Marty,
Interesting article,
Thanks for the insight!
Cheers!
Ian
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Permalink Reply by Sharon Hill on
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Awesome! Love the art work. Maybe you're on to something. :)
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Permalink Reply by David Ruggles on
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And Disney and Google partner on this acquisition so they could send their staff to actual car dealerships to learn how to negotiate a deal with a consumer, who has unrealistic expectations, negative equity in their trade, less than fast track credit, do a deal, and still get a 90 plus CSI score. Disney people could learn a lot from the real auto retail experience, achievements accomplished many times each day in car stores that dwarf the so called "Disney experience," which is nothing more than making adults feel good after getting raped on entry tickets for themselves and their offspring and forcing them to stand in line in the hot sun while getting jostled by screaming kids between rides.
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Permalink Reply by Mark Dubis on
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David
I'm sure you and many dealers hope you are right and that Google and Disney would never be able to figure out how to successfully sell cars. And with Disney's Market Cap of $147B and Google's Market Cap of $389B, I guess we have nothing to worry about.
Yep, and small hardware stores had no need to worry about HomeDepot or Lowe's.
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Permalink Reply by David Ruggles on
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I'd like to see them have a go at it. As it is, they and others tend to make a lot of predictions based on "research." I can say to you, "My grandmother is in orbit around Mars." It ain't likely, but you can't prove she's not.
What are they going to do? Start their own car company from scratch with all of their capital? A few companies have a large market cap. Toyota, Ford, GM, etc. are not analogous to small hardware stores.
What is it you think everyone should be worrying about? Do you think Disney thinks selling cars is like operating a theme park? Better yet, do YOU think auto sales has anything to do with operating a theme park?
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Permalink Reply by Brian Bennington on
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Why Mark, aren't you clever! Did you come up with this article all by yourself or was this a "Carfolks.com" collaboration. I noticed you're crediting "Marty McFly" at mcfly@autonews,com as the author, but I just have the feeling AN has nothing to do with it. But, hey...if I wrote this, I wouldn't claim it either. Regardless, I'd rate this as the biggest "waste of time" blog I've read in my four month DE membership. If this is an attempt to peddle your company's services, like most of what I peruse here is, you might be wise to jump back on the drawing board. I like learning about what our many vendor members sell and encourage them to write about it, but in a direct concise easy-to-read-and-understand format.
Oh, and don't kid yourself. Disney and Google would never get involved with auto sales unless they were manufacturing the vehicles, and they definitely have the money to do it. But, why would they? Both deal in commodities with considerably larger margins and I couldn't visualize either involved in something as "mature" as auto sales. Now, don't be upset with me about this. You wanted "shared thoughts" and I'm giving you mine. As to "dynamic shifts," I'd anticipate an enormous shake-out of small IT companies (and God knows one is formed every time two people who have smart phones and know what "SEO" means meet), because the best cover IT-undereducated dealer management has to protect themselves from "catching hell" from their bosses is deal with the "big boys" (Cobalt, etc.). I know I'd rather explain why I spent their money on Cobalt than explain why I decided on "Carfolks.com," and besides, manufactures want their dealers to use established and proven IT vendors anyway.
Did you know there were thousands of US auto makers during the first two decades of the 20th century. I think you can guess why you can now count them on the fingers of one hand. I could go on and on, but if you would like to post something I'd like to read, let's hear the "Carfolks.com" story and your value proposition. You may have already done it, but do it again. There are new members joining all the time. Now that would be interesting!
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Permalink Reply by David Ruggles on
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@ Brian - While I don't agree that Google or Disney are any threats to auto dealers, I think you missed the point of Mark's article. What does your reference to CarFolks have to do with anything? Am I missing something?
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wow, someone complaining about some alleged self-promotion by behaving like a jerk. Were it to have been self-promotion - it wasn't - it was far smarter than your contribution by miles. Perhaps you should take a lesson and behave appropriately.
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Permalink Reply by Brian Bennington on
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Initially, let me apologize to David Ruggles, whom I have great admiration for, and to Sharon Hill, who I don't know, but who still has my respect as a fellow DE member. In response to Mr Ruggles' comment that I might have missed the point, what I got out of this was a future fantasy scenario when, because of auto dealers' ongoing inability to improve their sales processes and employee retention, the "big bad wolves" (Google and Disney) could step in and "show 'em how it's done." In selling, that's a classic "back the hearse up, open the doors, and let 'em smell the flowers" technique. I could be wrong, but I don't think this story will move any dealers to action. Please David, if there is another point (or points) I'm missing, wise me up?
As to my reference to Carfolks.com, always before I respond here or to ADM posts, I first read the blogger's bio and, if listed, their business website. As Mr. Dubis lists his employment as an executive team member of Carfolks.com, I used that in my comment for a comparison only. Of note, Carfolks.com is an interesting company that, for consumers, helps them find dealerships that focus on customer service while, simultaneously, offering dealers their "Carfolks Integrated Digital Marketing Solutions." I especially found their "Honest Exchange" methodology interesting. (Mark, I hope this direct concise easy-to-read "plug" for your business eases the pain of my earlier comment.)
Finally, Ms. Hill, let's clear the air. Forgive me. The reason I regularly behave like a jerk is because I am one. I've always been the guy who, when someone mentions "cute little pony," starts looking for horse poop. Unfortunately, I probably won't change. But, fortunately, my customers overlook it because I deliver what's proven (over 20 years) to be highly profitable relationship-building marketing sans the Internet. I'm just damned lucky I'm good at it just as I'm damned lucky I don't need to solicit business on DE or ADM. (Yes, that could change, but for now my "dance card" is full.) You might read my comment again as I did state I am a strong proponent of my DE colleagues explaining, i.e. selling, their products/services here, but "in a direct concise easy-to-read-and-understand format." I'm relatively sure my response won't move you away from the gigantic throng of people who dislike me for a myriad of reasons, including "jerkiness," but my apology is sincere, if for no other reason than I don't like to upset anyone on a Sunday!
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Permalink Reply by David Ruggles on
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No apology necessary in my case Brian. It WAS a fantasy that is never going to happen in my opinion. And dealers DO need to learn how to retain their people. I don't think Mark Dubis disagrees with that at all.
But IMHO it isn't the processes that are the problem. It is the fact that dealer processes are largely in the hands of some folks who aren't very artful, probably because of the turnover you mention.
I don't know anyone who is concerned about Disney or Google taking over auto retail. Ford tried it in some markets and got burnt badly. Disney and Google could try to design and manufacture vehicles and attempt to sell them in an unconventional way. They would find that less than 20% of consumers are fast trackable on credit, that many if not most have negative trade equity and need a big rebate and/or a lot of dealer input with lenders to get a deal done. A third of auto consumers are sub prime or Buy Here Pay Here. The volume lives between the top and the bottom with all of the credit challenges and negative equity issues imaginable. Auto dealers aren't able to give the majority of consumers what they want. They are in the position of having to make consumers like what they get. Non retail people have to learn this the hard way.
I know a lot of sales people who have been selling cars for decades. They still have demos. They have other perks other sales people don't have. They also have a HUGE book of business and sell 20 - 30 cars a month at substantial gross. The lowest income guy of the group made $150K last year. These are low tech guys. Low tech still works. In the rush to engage Gen Y many forget about the generation that has real money. Many of those are somewhat tech savvy but will go both ways. They appreciate a relationship.
In the case of GenY/Millennials. At some point, they'll move out of their parent's basement and pay off their school debt. As with shooting ducks, you don't aim at the ducks. You aim at where the ducks are going. They'll grow up like we all did. At this point, abandoning old school to chase new school might not be a smart decision. Who knows what the game will be once the Boomers die off. But dealers will adapt to it. It won't be Disney who figures it out.
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Permalink Reply by Brian Bennington on
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Gosh Darn, David. I cant believe you referred to this goofy "take-over" pitch in your last comment as much as you did. As I think about it, I know what direction I'd take any presentation if I was trying to sell you. Of course, all of your points are valid. Which brings up, perhaps, the most important question. Is the purpose of DE to state and restate the problems of this business or, for those of us with experience, to explore realistic and doable solutions to them? (And do it without any personal gain or outright pursuit of business. I only say that because, when people see the $$$, the BS begins.)
You definitely have a "Joe Friday" writing style in your third paragraph when you reviewed everything that can go wrong with a deal. Man, it was so powerful, I was ready to bet that every store in the country would "blank" tomorrow! Make that the world! (Haven't I mentioned to you before that you can be a bit depressing at times?) As strong as you can "hit the negatives," I'd say you're no stranger to the "flowers in the hearse" technique. I've used it myself many times, as there's a gigantic number of the the populace who respond to "fear." Look how profitable delivering only "The Promise" can be for an effective minister. Done right, the wallets open wide for the granddaddy of fear-inspired motivation.
Loved your 4th paragraph! I was never that big on demos, perks, etc., but your reference to the profitability of maintaining traditional marketing practices is dead on. (If you Googled up "relationship centered marketing," the first three listings will take you to my website and you can see how much my work agrees with you.) I wouldn't "play them down," though, by calling them "low tech." They're actually the true fundamentals of selling and knowing them is critical to any sales process, regardless of how the customer arrives on the lot. To me, it's fascinating how much pitching and publishing the continuous updating of this "new technology prospecting" gets. However, getting tech-dependent reps to put a similar amount attention into the above-mentioned fundamentals is as difficult as it is to get a game boy away from an 8-year old.
I'm not nearly as sure as you are the "GenY/Millennials" will eventually jump back into the market. A lot of them are learning a new level of frugality paying off their loans, and because it's such a painful lesson for them, it will likely influence their spending habits the rest of their lives. (After all, no one really needs a new car.) As to abandoning traditional selling methods because a rep is "wired up" to social media, etc., let 'em do what they want. If they're comfortable hunting for price-dependent customers and going "toe-to-toe" with their competitors in a race to the bottom, let 'em go!
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Permalink Reply by Mark Dubis on
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@brian- I'm the one you accused of self promotion. Don't I get an apology?
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