What has held many B2B businesses back from starting their own direct sales channels is the need to invest significantly in marketing, fulfilment and customer services, in short, the bits that distributors are currently experts at.
What is the future for dealers?
Looking at Hyundai’s digital first approach again the role of the dealer has not been made redundant but they are no longer an essential part of the transaction between manufacturer and consumer. If the consumer needs to sign a credit agreement, this will happen at a dealer. The dealer will also be the on-going point of contact for continued servicing of the vehicle.
‘Manufacturer Approved’ second-hand car sales are one avenue for car dealers, but this could also be threatened by advances in consumer-facing technology. Virtual Reality and video content could enable a consumer to thoroughly check out a used car from their sofa, on their smartphone.
A good analogy here might be to look at one of the key players in digital disruption, Apple. Second hand ‘Apple Certified’ hardware is sold on-line, and their version of the ‘dealer network’, Apple stores, is generally predicated around product servicing and repairs.
We would suggest that the traditional role of the intermediary will continue to shift from being transactional to a role geared around customer services.
The death of a salesman…or just a new suit
It remains to be seen whether ‘Click to Buy’ will be a success for Hyundai, and whether other automotive companies seek to emulate their approach. Looking back at the patterns of digital disruption over the last ten years, Autotrader and Rightmove for local newspaper advertising or Google for The Yellow Pages, for instance, we can see a shift in the paradigm emerging and an industry ripe for disruption.