Sonic 'delighted' with rollout of new retail plan
Exec sees faster deals, higher share
Three weeks into the rollout of Sonic Automotive Inc.'s customer experience initiative, customers at the pilot store for the launch, Town and Country Toyota in Charlotte, N.C., aren't yet getting the promised iPad-enabled transaction with a single salesperson.
But new desking software for drafting deals and calculating customer payments, as well as centralized new-car pricing and ordering -- also part of the $250 million-plus One Sonic-One Experience -- already are leading to higher market share and speedier transaction times, Sonic's operations chief says.
The launch store's share of new Toyota vehicles in the market jumped 2.4 percentage points since July 1, Jeff Dyke, Sonic's executive vice president of operations, said. Gross profits per new vehicle are down about $200 in the same period, but Dyke attributed that to the store's less-than-optimal inventory when the initiative started. Centralized ordering is improving vehicle selection, and store managers are starting to see some per-vehicle profit improvement, he said.
July 1: Rollout began at Town and Country Toyota in Charlotte, N.C.
Aug. 11: Salespeople start taking some customers through full process
Sept. 1: Entire store moves to full process
Oct. 1: No-haggle pricing is locked down and marketing begins as approach spreads to Sonic's 4 other Charlotte stores
Early 2015: Rollout spreads to one store in each region
Source: Sonic Automotive
Dyke spoke after Sonic, the country's fourth-largest dealership group, reported second-quarter net income that more than tripled. But the soaring results reflected extraordinary items that boosted this year's profit and lowered last year's.
Sonic executives say the company's transformation will justify the investment by reducing transaction times, improving customer satisfaction, lowering employee turnover and ultimately increasing sales and market share. They say customers will be able to complete a vehicle sale from beginning to end in 45 minutes or less with the help of a single sales rep using an iPad.
Dyke, who spent Saturday, July 19, working the sales desk at the Charlotte Toyota store, said he's "delighted" by the rollout thus far.
"The feedback from the customers was just amazing," Dyke said. "We literally penciled a deal -- and it was a cash buyer -- but we penciled a deal with products in less than a minute."
The store is delivering cars in less than an hour, Dyke said, though the average that day was 11/2 hours because of high traffic and a backup in the store's detail area. The dealership is still negotiating prices, but wiggle room is being tightened in preparation for the move to one-price selling.
In what Dyke described as a "soft launch," some salespeople will start taking select customers through the full experience the week of Aug. 11. By Sept. 1, all sales personnel will move to the new process. In October, Sonic will start advertising to the Charlotte market, and the store will lock down its no-haggle policy. The approach will spread to Sonic's four other Charlotte stores by year end.
In early 2015, Sonic will take the initiative to other markets, selecting one store in each region to start. That will help regional managers get experience and troubleshoot problems, Dyke said, before they have to deal with multiple stores being converted. Sonic intends to have all stores converted by mid-2016 or earlier.
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