Article

Cracking The Code

Attendees of Edmunds.com’s inaugural Hackomotive event tackled some of the industry’s biggest issues and were offered a glimpse at how the tech community could bring about change.

May 2013, Auto Dealer Today - Feature

by Brittany-Marie Swanson

On a sunny February morning in Santa Monica, Calif., more than 150 web developers, marketing professionals, entrepreneurs, sales trainers and others gathered to discuss solutions for a major problem facing the automotive industry: Car buyers hate buying cars.

The event was Hackomotive, and the format was borrowed from Edmunds’ Hack Days, a series of meetings the company stages to solve in-house dilemmas.

“It started on the technical side, where technology people were forming teams to work to solve problems. We’ve since expanded it across the organization,” Edmunds CEO Avi Steinlauf told Auto Dealer Monthly. “And we’ve seen great benefits from that.”
Among the consumer gripes participants listed was that dealers aren’t delivering an experience on par with other retail industries. Shoppers, they said, want to shorten transaction times, quickly find vehicle information and receive more accurate time estimates at the service center. 

The discussions set the stage for the competition portion, which gave 19 teams 36 hours to develop pitches for consumer-facing websites and mobile tools that spoke to the event’s theme: “Reinventing the Automotive Shopping Experience.” On the line was $28,000 in total prizes.

“[The theme] is near and dear to us,” Steinlauf said. “That’s what we’re all about.”

Trust Issues
The judging panel was a mix of professionals from a variety of fields, including executives from FordDirect, American Honda Motor Co., The New York Times Co., software maker OpenTable, and Dealers Carl Sewell of Sewell Automotive Cos. and Tamara Darvish of DARCARS Automotive Group. 

The judges made clear they were looking for solutions that got to the root of the problem: distrust of salespeople. And that’s exactly what the two grand-prize winning teams, Tegrity and My Motive, delivered.

My Motive’s entry sought to empower car shoppers by allowing them to select their salesperson before visiting the dealership. “We’re trying to solve a specific problem: ‘How come the auto shopping experience is not on par with other retail experiences?’” said My Motive team member Krish Sailam, who serves as director of ad sales for Phunware Inc., a mobile advertising firm based in Austin, Texas.  

The team suggested creating profiles for the sales team and making them available online, via a mobile app or a kiosk on the showroom floor. Salespeople could also integrate those profiles into their business cards via QR codes. 

Co-winner Tegrity sought to “rebrand salespeople” by creating profiles that would incorporate elements of Yelp, DealerRater, Facebook and Twitter. Customers would be able to see localized recommendations and filter search results by demographic. 

“The problem we’re trying to solve is the customer being able to trust the integrity and knowledge of the salesperson,” said Tegrity team member Oren Weintraub, founder of MyCarBuyingSercrets.com. “We’re actually creating a system where we can rate the salesperson based on customer feedback.” 

Social Dealings
Other teams, including Kar Match, eCarmony and Car Match by Team Love-o-Motive, showcased entries that leveraged data found on social media sites to pair car buyers with other shoppers, compatible vehicles and more. 

Facebook Auto Client Partner Phillip Rather told Auto Dealer Monthly there is a good reason competitors incorporated social media into their entries. “We think shopping for cars is naturally a social thing. You ask your parents and your friends and family, ‘What kind of car should I buy?’” 

Rather was also in attendance to answer Facebook-related questions and to help participants integrate the social network’s Open Graph function, a service that allows third-party developers to create apps that automatically share users’ engagement with the app on Facebook. Spotify and Hulu are examples of such apps.

“Anything [Hackomotive participants] build here, we can figure out how to put the social hooks in to get it News Feed distribution, or use it to poll your friends or bring your own personal identity to the shopping experience,” Rather noted. 

The need to interact with Facebook users came to light this past January when Facebook rolled out Graph Search. The search engine provides users with a way to sift through the social network’s one trillion connections to locate useful information about businesses, games and more.

The new tool, which is being beta tested in select markets, will also include ratings and reviews. A recent study conducted by DealerRater suggests that four out of five customers won’t move forward with a purchase based on a negative review, making Facebook’s Graph Search all the more important to the industry.   

Going Mobile
The shift toward smartphones and tablets was another hot topic. Event organizers even provided teams with mobile app development assistance. Emerging among the surplus of mobile-geared entries were teams Grease Monkeys and Cartell, which finished in second and third place.

The Grease Monkeys’ creation focused on the ownership experience. Team members proposed an in-vehicle device that could send real-time vehicle diagnostics straight to a driver’s smartphone. Team members stressed that alerts should be “jargon free” and recommended that consumers should be able to get repair quotes from multiple shops. 

Team Cartell pitched a mobile app optimized for tablets, which would allow users to connect with other car buyers with similar interests to locate the best deal on their desired vehicle. 

The approach is far from futuristic, according to a study conducted by eBay Motors. Analysts found that more than one-third of 18- to 35-year-olds use a smartphone to compare vehicles during their dealership visit. One in five respondents even said they’d consider purchasing a vehicle using a mobile device — a realization that’s causing change at DARCARS.

“We’re sort of migrating away [from the isolated Internet department] because such a great majority of our customers are going on the Internet before they come into the dealerships,” DARCARS’ Darvish said. “Everyone in the dealership needs to be educated to handle these customers.”

Altering Perceptions
Darvish is well aware of dissatisfaction among car shoppers, and, like most dealers are doing, she’s exploring all avenues to improve the experience. “I thought [Hackmotive] would be a great opportunity to learn about others’ views of our industry,” she explained, adding that many complaints may be rooted in the industry’s past missteps with consumers. 

“I think the biggest problem with the consumer-buying experience is their perception of what the experience is all about. … We’re a whole different business right now than we were 20 years ago or even 10 years ago.” 

Jeremy Anwyl, Edmunds’ vice chairman, agreed, but said that change is being driven by the fact that the vast majority of consumers shop online before setting foot in a dealership. “That process has changed markedly,” he says. “Now customers can get all that information [they used to get at the dealership] online.”

But several consumer-protection laws, including the Red Flags Rule, as well as privacy and disclosure rules, stand in the way of the industry’s push to a more web-based transaction model. But Anwyl said the industry can still work to improve the connection between what’s done online and in the dealership. 

“There are gaps between the two; they don’t connect,” he said. 

As for dealers who feel a move to a more web-based transaction model will one day cut them out of the equation, Anwyl offered this assurance: “There is no way people are going to buy cars without interacting with the dealership.”

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