This is the prepared text of the speech and may not reflect the verbatim presentation
When Keith Crain and his team at Automotive News first thought up the idea to discuss the future of the Franchise in the Internet Era - most opinion-leaders were probably saying that the franchise system as we know it wouldn't survive.
Today as we sit here, many of those same opinion-leaders are asking if any of the Internet ventures are going to survive.
(VISUAL #2: TYPE BUILD FROM COPY)
Here's how quickly things change:
In spite of this, I don't take the point of view that the Internet is doomed to failure in the automobile business - in fact, I believe the opposite is true - the Internet is forcing all businesses - including automotive and dealers - to re-think a lot of assumptions.
Just as the impact of the Web on the Franchise System was overstated when it first hit our business … none of us should
assume today, based on the last six months, that the Internet won't have an impact on dealers for the future.
It will have an impact - it already has -- and I believe, a positive one.
(VISUAL #3: GALLUP STUDY-CONSUMERS)
What we know for sure is that consumers say a visit to the dealership still provides the most useful information, but more and more consumers are using the Web as part of their new vehicle shopping and buying experience (2000 Gallup Study)
(VISUAL #4: GALLUP STUDY-DEALERS)
Most dealerships today are now wired to the Web:
And here's the best news … the marriage of the Internet and the Franchise System is having a positive impact on how consumers feel about us.
(VISUAL #5: GALLUP STUDY-ATTITUDES)
According to the Gallup Survey, consumers' attitudes toward dealers, and their feelings about the new vehicle buying experience, are improving:
The media isn't picking up on this story - while 75% of consumers had positive experiences with dealers, only 12% of the news media predicted that consumers had such positive feelings.
(VISUAL #5A: ADD MEDIA BULLET)
This is all the more interesting when you consider that 61% of the media surveyed said that they had positive dealership experiences themselves.
(VISUAL #6: COPY POINTS FROM TEXT)
So, here's a scoop for any media present:
(VISUAL #7: "CLICKS AND BRICKS" BULLETS)
The "Clicks and Bricks" model is beginning to evolve as the business model for the future for many important reasons:
Plus, there are essential aspects of a new vehicle transaction that can only be handled at the dealership:
(VISUAL #8: PIX OF CUSTOMER, WEBSITE & DEALERSHIP)
Online car buying is trending toward a seamless transition between the manufacturer's site and the local dealer that will allow customers to research, shop, transact a price and even place an order for delivery.
Manufacturers own the marketing landscape. Dealers own the transaction in local markets. And in this new business model, successful customer relationships will increasingly be shared between dealers and OEM's.
Consumers will use the Internet to get exactly what they want - the right product, at the right price, right time and right place. Every manufacturer is working on speedier Order-to-Delivery capabilities that will give the customer exactly what they want and reduce the amount of time it takes to get it to them.
The Internet holds the key to making this a reality. It is the link between the customer, the supplier, the factory and the local dealer.
The Franchise System will evolve, as dealers find new ways to add value to the customer.
(VISUAL #9: FUTURE OF THE FRANCHISE BULLETS)
The need to carry a large vehicle inventory will decrease as manufacturers work on improved OTD capabilities, and as customers become more familiar selecting models, colors and options over the Internet.
Dealers will find opportunities to reduce floor plan and related expenses.
Given consumer trends toward greater versatility and adaptability in vehicles, the dealership of the future will add value by being the "Go To" Place for things customers can't get on the Internet:
In other words, I believe the Franchise System is "alive and kicking" … and there are a lot of opportunities out there for
dealers to enhance and grow their retail business for the future. That's what we want, because it will make all of us stronger.
Alfred Sloan said it best almost 40 years ago … "The franchise system of distribution makes sense only if you have a group of sound, prosperous dealers as business associates. I have never been interested in business relationships that are not of benefit to all concerned. It is my belief that everyone should be rewarded accordingly."
As long as we all remember this, the franchise system will do just fine.