By Christmas, CEO says, customers can initiate digital transactions

AutoNation preps for online sales

By Christmas, CEO says, customers can initiate digital transactions

AutoNation CEO Mike Jackson: Online capabilities will expand during 2015.

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By Christmas, AutoNation Inc. customers will be able to initiate a vehicle purchase online.

That's when Web sites for the nation's largest dealership group will switch from informational in nature to transactional, AutoNation CEO Mike Jackson said last week. It's part of a two-year, $100 million investment AutoNation is making to bolster its brand and create digital storefronts.

By the end of the year, "customers can select specific vehicles, get a committed price, give us a deposit, and that becomes their vehicle without ever having entered the store," Jackson said. "If somebody walks in 10 minutes later and wants to buy that vehicle, no, it's committed to that digital transaction."

During 2015, AutoNation will expand online capabilities to include purchasing customer vehicles and giving committed trade-in prices, plus committed quotes on financing, Jackson said. Service customers will be able to make appointments and pay bills online and get online updates on vehicles being repaired.

With the effort, which Jackson calls transformational for the company, AutoNation is moving away from third-party lead providers. Leads from those providers have generated 13 percent of the company's vehicle sales but at a cost well above the cost of leads from the company's internal efforts.

Jackson's remarks came during a conference call with analysts and media after AutoNation reported a 12 percent gain in second-quarter net income. The retailer missed analysts' profit expectations largely because of higher spending on the digital initiative.

Jackson wouldn't specify how much the company had spent on the digital and brand investment. The effort includes both marketing spend on the AutoNation brand name to drive more traffic to the Web sites and technology investment in the sites themselves.

AutoNation research clearly showed that a seamless experience for customers requires sites that can handle actual vehicle transactions, Jackson said.

"Informational sites are useful," he said. "They've taken us to a certain point, but the customers are not interested in doing all that work, disconnecting, and then coming to the stores and starting over again."

You can reach Amy Wilson at awilson@crain.com.


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