A weekly podcast with the latest e-commerce news and events. Episode 188 is an interview with Jim Lyski, the CMO of CarMax.
Jim Lyski is the CMO of CarMax. In this broad ranging interview, we discuss the keynote Jim delivered at EtailEast, “CarMax Goes All-In On Omni-Channel: Building, Scaling And Deploying With Speed”, as well as discussing the digital disruption of the automobile business, and where it might all be going.
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Episode 188 of the Jason & Scot show was recorded on Wednesday, August 21st, 2019. live from the eTail East trade show in Boston, MA.
Automated Transcription of the show
[0:24] Welcome to the Jason and Scott show
this episode is being recorded live from the etail East trade show in Boston on Wednesday August 21st 2019 I’m your host Jason retailgeek Goldberg and unfortunately Scott was unable to join us today so I’m solo,
but I’m making up for it by having a great guest on the show welcome to the show today Jim whiskey the CMO at CarMax.
[0:50] Thank you for having me Jason.
[0:53] I am super excited to have you on the show and I suspected most of our listeners are familiar with CarMax but may not fully perceive the scope so can you kind of give us the soda elevator pitch.
[1:07] Sure like where the nation’s largest retailer used vehicles and we’re basically Coast to Coast with over 200 stores and we sell three-quarters of a million cars a year.
[1:21] That is awesome and full disclosure for me I spend some of my formative years at Best Buy until I still like I can’t hear CarMax without thinking the enemy at Circuit City.
[1:32] Yeah yeah we were a spun out a Circuit City in 1994 so.
[1:38] I’m dating myself I know that that is awesome.
You are the cinema what sorta is the scope of us Eno at a company like CarMax like what what sort of things do you get involved in and how do you spend your day.
[1:54] Yeah well I think you know the CMO rolls a little different every company but that CarMax I’m ahead of all the traditional brand things so I can advertise in Communications PR
as well as strategy marketing strategy and Analytics,
and then an additional. I also had a product organization so the product team focuses on how we represent ourselves digitally as well as in the stores.
[2:21] Got it so that whole in-store experience are in dealership experience and the digital version of that is all in your scope so it sounds kind of like a part-time job then.
[2:31] Yeah exactly.
[2:34] And how did you come to CarMax what was your background prior to CarMax.
[2:38] Well I started off my marketing career at FedEx been about a dozen years there ended up heading up all u.s. marketing for them eventually,
then I went over to Cigna Healthcare Nationwide Insurance and most recently Scotts Miracle-Gro.
[2:54] That awesome so you know we talked about e-commerce allowed on the show and there’s this book retailer in the in Seattle I Amazon the comes up periodically and so,
FedEx makes a lot of cameos on the show and we’re talking about logistics but lately the big news is they sure to boldly,
fired their customer a little bit in an Amazon as a impassioned Observer do you follow that all is that stuff.
[3:22] I think everybody in retail I last saw that and being a former associate FedEx it was particularly interesting.
I don’t know why they did it but that’s pretty smart company so I’m assuming they weren’t making any money.
[3:37] Yeah I know I tend to think you have a finite amount of delivery capacity and if you sell all that to the,
company with the most leveraged in the world you have to sell it at the the lowest price point and I have a feeling FedEx wisely figured out that,
they can sell their capacity Elsewhere for more money at the same time that an exit probably Amazon’s probably investing in their own capacity pretty aggressive.
[4:03] Yeah Amazon I don’t know if you go through any neighborhood in America now you’re going to see those Amazon trucks everywhere.
[4:09] Oh my God the trucks to now and soon there’s now a San Francisco to Seattle it’s the drones on that these on the sidewalk there is crazy.
[4:17] Yeah well then FedEx has her own little robot making deliveries to so I think it’s going to be a dangerous place here pretty soon.
[4:25] I know I know my poor four year olds going to have to learn to skateboard somewhere else I don’t know how that’s going to happen the FedEx drone is even cooler though cuz he can climb stairs and stuff.
[4:34] Yeah it looks pretty cool.
[4:36] Yeah yeah I like that video so you know I have to tell you before we jump in any further or Coho Scott is super bummed to not be here with me today is where both e-commerce guys Scott founded,
well known company in Tipton public in e-commerce paste but he.
Started a new business a couple years ago on demand car washes.
And today he’s now expanded into like 13 states and raised a bunch of money and so he’s become a total car guy so I know I just wanted to spiritually give Scott a shout out that I’m here and you’re not.
[5:13] Yeah and he’s really going to be pissed because we’re going to go on a test drive and in a Ferrari F40 the right after this interview.
[5:21] That you went you didn’t I just bet that I can I drive around in the black one.
[5:24] Level of a little race.
[5:28] Yeah exactly yeah she’s a guy and he’s going to point out that like potentially in a straight line the test I can take the Ferrari but I’m going to point out that is long as we put a curve in there we’re in great shape.
[5:42] Plus you and I are going to look a lot cooler than sky.
[5:45] Yeah well that was true even without.
I love it when he’s not here to defend himself that’s my favorite thing so.
Tomorrow you are speaking in detail in your session title your keynote is Carmax goes all-in on omni-channel building scaling and deployment speed,
and so I’m assuming you’ve thought about what you’re going to say tomorrow or you going to work on that after this.
[6:10] No I thinking if you have any words of wisdom I’m going to incorporate that was sent to my speech tomorrow but I have an outline at least.
[6:16] Yeah well what has mostly made a success for me is making fun of Scott so I feel like.
Did they send you do that on stage you’ll you’ll be ahead with the audience no matter what.
I promise not to let any of us Tomatoes audience listen to the show in advance can you get a sort of a high-level about what your POV is about like what it what do you mean by going all-in on omni-channel.
[6:39] I think it’s pretty clear across all our retailers that the consumer expects to be able to conduct business with the with Brands both online and in-store with retail brand and I think you see brands
that are traditionally brick-and-mortar going into the online space and vice versa right so,
Arctic is going to be just how did we excel at both.
Make it a seamless experience and then scale at out Across the Nation we’re right in the midst of rolling this out or we’re not in about 45 States right now and
by February we’ll have more than 50% of our customers on our omni-channel experience that stuff is really just about
like how do you do that how you take a massive company and and make this pivot really really quickly.
[7:28] Yeah and I know it’s it’s doing pretty easy right you just sent out a memo and everyone changes behavior in.
[7:33] Yeah we didn’t we only have 25000 Scioscia it’s on the front line so I think they should be able to modify Behavior within a week or two.
[7:40] Yeah that seems like I mean maybe give it three ways to be safe yeah
so I think of Carmax as being sort of an original disrupter of the car shopping experience but now the Choppers are used to all of these digital amenities and how many channel has has become
prevalent and I assume
that different said all the consumers have shopping unit doing buy online pickup in-store at at apparel store or a consumer electronics store now impact their expectations,
when they shop for a much more expensive higher consideration I don’t like an automobile.
[8:15] Yeah I think you’re pretty spot-on on that the the major major difference is that this is a very considered purchase so far lot of our customers this is the largest purchase they’ve ever made an and four others maybe it’s the second largest so,
the a buying journey is as nonlinear and it kind of starts and stops and it’s squirrels a little and so being able to,
give the consumer a lot of you know full credit for everything they’ve done online.
Or when they eventually walking to the stores extremely difficult but but absolutely critic.
[8:51] And so it’s digging in that little bit like there’s two things I’m always interested in so one is.
The customer-facing Experience so I’ve done a bunch of research on your website before I ever go to the store probably let you know evaluated your inventory and I you know I probably should have preferences and I might have even there all day
Pacific Beach vehicle before I land at the store.
Does anyone in the store know all those things I did or do I have to start over with that sales associate in the dealership.
[9:19] Yeah so last year you’d probably have to start all over but this year are we rolled out across all of our stores are CRM platform which is salesforce.com,
and we take all the information and all that work that you’ve done online make sure that’s readily available to the customer and the associate both,
and so we try to make it like I said very seamless experience where you don’t have to repeat the effort that you re put in and you actually get credit for it and you can progress quite quickly so,
if you progress pretty fully online that you can walk into the store and get the keys and drive off in about 15 minutes,
still have to sign some papers each State’s a little different but 15 minutes 14 minutes is the fastest we’ve done one so far but,
that’s quite a different experience to walking it a dealer spending all afternoon they’re getting put in an office with the finance manager and you know,
eventually walking out feeling like I don’t know if I got a good deal.
[10:24] Yeah yeah you’re almost at parity with the guys that steal the car now.
[10:28] It’s almost as frictionless.
[10:29] I got it I got to trim five more minutes.
[10:31] Yeah hopefully we’ll make it so personal us that they’ll stop wanting us to you
I would be ideal and then the other thing is interesting to me is the attribution so you mentioned it’s a considered purchase so you probably invest in a bunch in marketing vehicles and probably not very helpful to focus on the last click attribution and see how many people.
Immediately transacted so do you guys have a notion of a omni-channel attribution model to try to understand how how your marketing is impacting.
[11:01] Yeah absolutely Remy we do multi-touch attribution and we we.
I do again.
I’ll just I can answer you have to repeat if it’s a question if you don’t want to.
[11:15] I’m going to just put a little Mark in there go ahead.
[11:18] So yeah we do multi-touch attribution analysis and being able to figure out exactly that customer journey and what was influential in the making the decisions has been pretty critical to our marketing Investments.
[11:34] Sorry now I’m getting distracted yeah I’m just going to cause for one second they’re sorry.
[11:39] Yeah that’s good it’s hard.
Little quips painful for both of us.
[11:58] If that’s the most painful thing we have to endure will be in good good shape.
And how many dealerships did you say you had or how many.
[12:13] Storefronts Wacom stores so we’re at what are we up to and we’re almost at 2:10 am I supposed to know.
[12:24] What you just did you at we on vacation during his last tour opening.
They’re probably kind of persnickety about accuracy.
[12:32] I think Lubbock Texas was 208 I think.
So that is that certainly makes sense with you have over 200 stores now are there any particular challenges with a doing omni-channel at that kind of national scale or is it actually easier when you’re covering the whole country.
[13:00] Yeah I know I don’t know which would be easier but but it is been pretty challenging because it’s a behavioral change for our Associates and so.
We were in kind of the original disruptor in this industry we rolled out no-haggle pricing,
and you know and that allow the consumer to have a great retail experience in the used car industry nobody did that and it was highly differentiating.
The backbone is delivering that experience are our Frontline Associates that are in the stores and so we have about 25,000 of them and
if we’re going to roll out a new experience to the consumer we first have to make sure that are sociopaths are very aware very comfortable and very well trained on it,
because we’re not going to take a step back in the end delivering an awesome experience.
[13:48] Yeah I know that makes total sense in Dysart have a philosophy that most of these customer experiences are about 10%
technology and Platforms in 90%,
people in organizational change management so I’m guessing when you deploy that CRM 25,000 Associates last year that was a big cultural shift that you had to be a sort of embraced and reinforced was.
[14:13] Yeah absolutely,
I think it was one of those who Moved My Cheese kind of moments for them and so you had to show him how they’re going to be more successful,
how they’re going to be able to provide an even better experience at maybe a little bit more personalized experience to the consumer are Associates that really care about delivering a great experience and.
I don’t know if you know this but,
all of our sales consultant for example if they are on a flat commission they don’t care what car you’re in so they’re not in Center to put you in the car you can’t afford there and send it to put you in the car if that best fits your needs,
and anything that we can do on the technology side on the data side to allow them to better fit you into a great vehicle,
the happier they are until once we show them how how salesforce.com was able to provide them information that allowed at personalization they bought in holy until,
we’ve been able to we’ve been very pleased with the experience that we’re delivering right now.
[15:15] Yeah that’s awesome and I can imagine there’s a little bit of the internal communication to sort of evangelize those benefits to those those internal Associates it’s it’s funny cuz in a lot of retail categories
people now experimenting with self-service technology UI digital you know amenities or or you know experiences on the phone that the Shopper can use themselves,
and it it’s always the case that the most cost-effective way to deliver a digital digital experience inside of a store is to digitally enable that,
sales associate turns out it’s really hard to get customers to download your app and I’m not going to say it’s easy but it’s easier to get those 25,000 Associates using your app.
[15:57] Yes absolutely.
[15:58] So what do think I’m curious about is on the title of your your topic you qualified it at speed,
and I suspect this is somewhat relative like what does feed mean at Carmax is that transformation you’re trying to change over a course of years is it something this year like what what is the the speed goal.
[16:21] That’s an interesting question I never thought of it as a speed goal but the way I’ve thought about it is that.
We are the industry leader we have a good distance between us and number two,
and I want to extend that distance so when I intubate I want to get it out faster and faster faster I want to do it at a pace that nobody else can keep up with so when we think about speed.
We think about delivering those objectives every quarter.
And then you know we obviously plan out years and one year and multiple years in advance but it’s really kind of,
orienting our product teams about delivering that next iteration or that next Improvement in a relatively short amount of time usually in about a two-week Sprint site.
[17:07] So what’s pivot a little bit to the car buying experience.
Categorize things in a two experiences there there’s the used vehicle experience and there’s a new experience in WoW,
like York really known for used vehicles I think you do own some new car dealerships as well a few,
so but that gives you enough of a taste to the maybe you can weigh in on this little bit.
The new car buying experience in u.s. like I would argue totally sucks
and a big part of the reason why is there this multi-tiered distribution system right so there’s got you not coming to manufactures the car and they have to sell it to a local dealer who sells it to a consumer in so give
the expense is going to improve.
Every local dealer has it independently decided they’re going to improve the experience and sort of deploy it out like the manufacturer can’t do something at scale and dictate that that all these dealers do it,
in the used car business you don’t have that multi-tiered model you guys on the inventory you’re on the hook to sell the stuff and you’re on the hook to invent the experience across.
[18:16] Your 208 stores to deliver that experience,
so as customer expectations Elevate and I bought a used car and I had a great experience or I bought you know some some something else,
it was a tie bought a wedding ring or some other high considered item I did Julian had this great experience and now I’m going to buy a new car for the first time and I have this sort of could you experience the website that I’m doing research on can’t even give me a price because.
Mercedes website doesn’t sell car hairs and a night you know the,
refer me to a dealer is kind of a I don’t know what to email marketing for him or something you know they’re all these these frictions that consumers are increasingly not used to is
is there any hope that that’s going to change in the u.s. is economic like art are we going to figure out how to deliver a good experience through that multi-tier distribution model is.
Are consumers ultimately going to put pressure on the model and you know I know there’s at least one car manufacturer that’s trying to.
Disrupt that like what what are your thoughts about the evolution of the new car buying experience.
[19:21] Yeah yeah I think it’s got a modify for a few reasons so one I’m a big believer in macro trance and is certainly a macro Trend around customers expectations,
customers expectations have never grabbed it toward gravitated south has gone up and up and up and so the consumers becoming every year,
less willing to put up with stuff that suboptimal buying a car is going to be no different secondly.
All the oems desperately would love to control the experience all the way through but these dealer groups have a ton of power I mean I can
only imagine the meetings where the dealers come in and they are unveiling new makes and models and new commercials and,
you’re not telling telling the marketing department that he hate the commercials and I me I can only imagine how those go because it’s crazy how much power that they have,
and they don’t do what they don’t want to do know some of them are very Progressive and they get right in line and they see the big picture and but most most,
dealers in my experience are really about extracting as much money out of your wallet as they can,
and that just doesn’t align with the consumers expectations so I think they’re going to have to modify in and when things like,
autonomous vehicles and things come out in the future I think it’s just going to put the increasing pressure on that bed modify.
[20:44] Yeah no for sure another macro Trend when were taking American census been interesting to me.
The people in the buying used cars I assume for almost as long as there have been cars
it’s a high high capital expenditure for your point and it it like it’s not a new paradigm that you would buy used car it’s not a new paradigm that you buy a used home but I’m noticing is,
previously owned products are becoming more popular in many more categories so I in a parallel we now have,
you know monthly rentals of business attire from Rent the Runway and we have
the real real just going public with sell all these previously owned luxury goods and thredup has been on the show and all that you know as consumers get more and more used to,
getting a better value from these previously owned things does that make it like,
even more likely that they’re going to make a decision to a used car versus a new car or I had the had those sort of go-karts already played themselves out.
[21:48] You know I I I hope it does but I don’t know if I will but I hope it does cuz the difference in value you get from a lightly-used vehicle in a brand new vehicle is monstrous if you look at the depreciation curve Cindy years 1 and 2.
Nuts and for some cars that’s it’s significantly nuts.
[22:08] Oh my God yeah I know I mention Scott’s a big test with man so I just let him by all these new vehicles every time they come out with the new color he has to buy one and then I I just tried to buy his old ones off of them witches has worked out.
[22:19] Yeah you’re saving about 30% probably.
So I think so I think you know that’s helped the train keeps going that way as consumers get more and more comfortable with it I think that one counter to that is,
that a car is still a status symbol and haven’t you know be like Scott and you want the latest and greatest the shiniest in the most gadgets and,
yeah you’re willing to pay for it and there’s always going to be a subset of the consumer that does that which is great for us I mean you and I who don’t mind buying one and two year old car that has all the latest gadgets and is awesome.
[22:55] Yeah I know for sure once more so because you just highlighted something like there are all these,
like a pretty different missions that different car owners might have right in for some people it’s utility to get to work for four other people it’s a you know part of their identity and a status symbol,
when you’re thinking about marketing and driving traffic to your stores,
I do have a sort of persona base model and you do different kinds of campaigns for those those different personas or if you figured out how to.
[23:31] Yeah I know we definitely have a Target I think I’ll great marketers know where the bullseye of the dartboard is and that’s where you aim that doesn’t mean you aren’t going to get customers outside of that as a bull’s-eye but you always have a bullseye in so we have one,
I always tend to be very considered purchasers like they’re they think about,
the value that we just talked about of a used vehicle they think about the functionality they also think about you know it’s just something they like and want to,
I want to have you know kind of represent them a bit so they’re very very consider they do a lot of research,
and appreciate our cars have been really well conditioned well kept in on 90 day warranty is all that stuff really matters to them and so that’s our Target we go after them and I and we did a lot of others outside the target.
That’s that would be the Persona we go after.
[24:26] Don’t you in are there any like particular marketing tactics that you feel like are the bread-and-butter that have been most successful for you that you.
[24:35] 04 us.
I don’t think any particular tactic other than talking about value I think value is a strong tactic like, I don’t know if you know this we don’t have sales.
We’d obviously don’t have a call that’s you know that what we are founded on we don’t give discounts to different,
user groups or anything like that it the prices the prices the price and so we’ve never in a broken out Labor Day sale and you know Mother’s Day sale and God knows what the next one’s going to be but,
but we’ve relied on we feel that this is a great value that we’re offering and so we try to educate around that and it’s done pretty well for us.
[25:18] I sort of think of you as having what I would calling everyday low price So Pro,
and it’s funny in if you survey all retail through edlp retailers tend to do better than promotional retailers the the one caveat is once you become promotional,
it’s virtually impossible to recover your edlp position until we’ve seen some bad examples in recent memory of our friends that like Macy’s or JCPenney trying to.
Make that shift and have it not go well.
[25:49] Yeah definitely be careful how you condition your consumer.
[25:52] Yeah it turns out they will learn and that’s one of the most fascinating things to me about all these in this reason I think it’s absolutely true in yours.
The traditional model used to really rely on what I’ll call in information imbalance like the the traditional not highly regarded used car dealership,
had a lot more information than the person buying a car so only the dealership new the history of the car and what the true value of that car was and likely all the information the buyer was going to get.
Was the information that the deal are deemed appropriate to share them which was,
likely to be self-serving information today we have this massive transparency we have all these information sources and it feels like,
there’s nothing that could be known about that vehicle that the consumer isn’t going to know if they choose to before they,
they buy the car and so I know that site in your case,
you make a lot of that information available so I let you know you can get that information from your own digital tools you’ve enabled your salespeople digital tools so they have a bunch of information and then they’re there is a bunch of third-party tools,
that the consumers can use as part of their consideration process as well do you view those third-party tools as a good thing because they help,
consumers figure out what the right vehicle is and you know you have the right vehicle at the best value or.
Would you prefer that you could keep that customer in your own Echo System more.
[27:17] Oh no I think we prefer having transparency in this industry we think if it was fully transparent and accurately transparent we would do a even better than we’re doing now.
I think some of those tools are partially true and partially not I mean when you look at things like.
I get onto the site and says all this vehicle is a good deal and I would ever great deal good deal what you don’t know what you know what they don’t know and hence the consumer doesn’t have frame damage.
And that’s not a good deal with a car with frame damage or this car may have an electrical issue going on,
it’s still get salt we have some markets where where the average price of a liked like vehicle with our inventory is actually below hours.
But when we look at the cars and we We examined over 2 million cars a year we look at the cars we.
Passed on buying those cars to retail because we knew there’s something wrong and now we’re watching them being sold at these other dealerships and think there’s no way the consumers really going to know that even when they use.
All these third-party tools they just look at something and say oh great deal okay.
[28:35] Got you so I think so some of those tools are bring to our surprising deals with like you know I can’t imagine like that does arm the customer with some some new tools that they didn’t have previously,
think of there being tools that give people a pretty detailed history of the car,
are you saying that those like his reserve or imperfect in terms of like identifying the potential flaws or evaluators of the vehicle.
[29:03] There definitely are two also you can go and look at vehicle history and those tools are better than not having any,
and they are not 100% accurate by any stretch and sew what they know so some of those tools use you no police reports and DMV data will not every DMV Department reports and whatever,
police reports and other shoes other kind of data and it’s just imperfect and so.
They do catch some things for sure like if I was on one of those sites and I sawed this car has electrical issue or it has a toners or something like that would be like all right that’s definitely a no,
so I know that’s that’s it you know not a good car but there’s some false positive there’s some listed is clean it just are not clean.
[29:55] Sure and I can imagine a lot of them seem like they’re based on public record so the car has been in an accident rate I know that if the frame is Rusted or it was mistreated in some way that didn’t create a police reports,
that’s where like you you need to like have significant car knowledge or a smart friend.
[30:13] Exactly like I could you know I could get in an accident in my car you know a single-vehicle accident and I’m not going to report this to the police write a report that happens all the time.
[30:24] Shirt go go trade it in the CarMax and get a new one.
[30:28] Yeah we buy any car any car.
[30:30] Yeah but you probably are pretty good at evaluating the True Value.
[30:34] Yeah I have all the cards that we buy which is in a four hundred thousand a year even more like six hundred thousand year only about a third of them make the cut to get retailed again the Russian we auction off to other dealers who are going to sell them to you.
[30:48] Got you all right show me a pivot to one more macro Trend I keep hearing that
teenagers are slower to get driver’s licenses in a lot of Metro’s in the like obviously they’re all these ride-sharing services that make it,
more possible to not own a vehicle at all.
I’m inferring from that that potentially like car ownership may have Pete and I’m just curious why am I dead wrong and we’re buying more cars than ever or or is growth slowing down like what is the overall status of car ownership.
[31:22] Yeah I know we look at this pretty closely in the overall status continues to grow so we look at a stat that is a number of vehicles per household and that’s actually increased over the last decade,
with the Advent of ride-sharing and all of that still moving up and then obviously the United States continues to grow in that household so,
are we see vehicle gross till we haven’t really seen at Plateau it may be plateauing in new or something or subcategory but overall,
it’s been a very minimal effect in some very dense markets it’s probably more exact exacerbated but,
across most of America’s it’s a minor thing.
[32:03] Great all my in-laws from Detroit are now going to Ward over me that I’ve been wrong when I told him that that.
[32:08] I’m glad I could help you.
[32:10] Yeah probably more important than you help my in-laws than me anyway so,
Swiss turn to the Future for just a second if you could put your sort of future has had on we get in that time machine and go visit a CarMax store in 2025.
Is it going to feel a lot like the the experience you’re rolling out right now or do you feel like it’s going to continue to evolve another any particular areas you’re hoping it involves in.
[32:38] Yeah I know,
I as I mention we’re going to be rolling out this Omni experience to most of the country by February but that still leaves another third of the country to go or so and so,
with about 5 years from now it’ll feel mostly similar I think we’re going to continue to innovate aggressively and iterate
they offering I think the consumers going to get more and more comfortable doing more and more online so I would Envision that the visits to the physical stores is going to continue to go down in time,
I mentioned we’re already down to about 15 minutes that doesn’t mean everyone’s 15 minutes,
but we think more and more will move towards that sub our level 30 30 minutes or less basically so I think that’s I’ll be the primary feeling that you would see if you walk if we walked in the store five years from now.
[33:32] There’s a lot of other categories that retail that have been disrupted by digital and the the store is role as a,
Discovery in browsing his is greatly diminished but it’s its role as a service and fulfillment center for that shopping experience has expanded and it sounds like like you’re anticipating to see more of that same progression in your space.
[33:55] Yeah I think they’re still be a strong merchandising aspect to this because you’re going to buy a car you’re going to be sitting there for hours and hours,
ever used car we are Iowa State ever used cars like a snowflake everyone’s different they had a different owner different miles different conditions you just did somebody smoker not smoking all this you just like want to sit in it,
and and will bring the car to you will let you test drive it at your house but a lot of consumers just want to come see you in a couple different cars make sure that you know the Honda Odyssey is the car that they really want and
all the different car seats and everything fit in it and,
I don’t think that’s going to change too much I think more Marvel by sight unseen but largely.
We want you to test drive it before you buy this it means a lot of money.
[34:45] Yeah and there is right I’m perfectly fine with people buying something digitally but there is this some fun psychology element there’s a thing called the endowment effect in like once you you try something,
you now imagine yourself owning it and so now I frankly the psychological promise is am I going to get this car back to the gym or am I going to keep it right so literally
like it’s a loss aversion like one once I imagine owning that this and now in effect kicks in and it’s it’s you know frankly much,
much more likely that they’re going to buy so I like I certainly feel like there’s there’s always a role for that that that physical Tryon and for that endowment effect to kick in.
You highlighted one thing I want to just follow up on a little bit like every car is a snowflake and that it could be so again if I may use a new car dealership I have this merchandise.
and hopefully the dealership makes a bundt or the manufacturer makes a bunch of them that are exactly like that one car maybe with some different color paints in your inventory,
you you could have a large quantity of the exact same make model but each one is.
For your point unique and might have different value based on its attributes and all these different things.
[36:02] How do you try to meant like I meant I could imagine as an e-commerce guy I’m like oh my God that’s a pain in the neck like every SKU.
Is is quantity wine and when however much I’m going to invest in the digital shelf for that skinny one stack ourselves that investment goes with it so I.
Why are there some particular digital amenities you think about her how do you think about like.
Telling the story of each individual car is it just kind of value that you can afford to invest a lot in each one or.
[36:33] How is like I don’t I don’t know how many Nissan Altimas I sold last year but it was a lot.
Literally in the tens of thousands and I took.
Pics 30 pictures of each one of those 360 degree pictures on Interiors Stills exterior shots.
And you know I’d highlight if they had new tires or or what-have-you we describe all the features and we did that last year over 750,000 times,
so I wish I could take one picture of one Nissan and then say it represents all but that’s how it’s not as transparent as we like to be,
so we invest in it because we think it’s the right thing to do and you know we’re hunting for way to do it more and more efficiently but we spent about.
Then I’m probably every 14 minutes we produce a new car in a store right self-storage taking cars reconditioning,
trading L replacing parts that are worn touching up paint,
waxing and polishing pictures all that every 14 minutes they’re rolling out and we do that across you know dozens and dozens of our stars and so it’s just the right thing to do and we invested time in the money to get it done right.
[37:54] That is interesting and I mean I certainly agree with that approach in the apparel industry there are these off-price retailers in
they get very thin inventory
of items but they’re high value items right and so I think I’d like a TJ Maxx for example in until they you know often they talk about their store experience as a treasure hunt there’s,
there’s one really good Jewel in there and you’re only going to find it if you come visit that store,
and there’s a lot of talk they just had an earnings report in their way behind on digital and they would say yeah because digital is not important to us you can’t have the Treasure Hunt online we can’t create a great digital experience for all these,
unique items that we have no depth one of inside they’ve kind of said oh digital is for selling other stuff in addition to the the treasure hunt you find in our store,
I feel like you’re you’re sort of an extent but the fact that that’s not necessarily true or sustainable and I you know I feel like there’s a bunch of advantages to the,
transparency of having all that inventory online and and you sort of do Evan online digital treasure hunt.
[39:02] Absolutely and I think you know I like I can’t imagine saying you know being able to do that you know when a digital Treasure Hunt is impossible when you got companies like eBay out there that’s,
all it is is a digital treasure head right so,
yeah we believe we believe that it’s worth it and we believe that’s what the consumer wants I can’t imagine not aggressively digitally merchandise in my view.
[39:30] That makes a lot of sense and that’s going to be a perfect place to leave it because it happened again we’ve used up all our listeners a lot of time so if folks want to continue the conversation you’re welcome to jump on our Facebook page or hit us up on Twitter,
Jim is the listeners want to get in touch with you to hang out somewhere on the Digital internet like LinkedIn.
[39:52] Other than spying on my kids yeah I think LinkedIn is probably the safest place to hit to sniff me out.
[39:58] All right well hopefully with your kids won’t listen to this episode and we’ll put your LinkedIn profile in the show notes I bet you I really enjoyed our chat and I really appreciate the time you took today.
[40:08] Thanks for having me it’s been great.
[40:09] And until next time happy commercing.
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