Editor's note: The name of Reynolds' Retail Management System was misstated in an earlier version of this story, which also appeared on Page 14 of the April 30 print edition.
The 2018 NADA Show's blizzard of dealership-technology presentations was much more significant than usual. Particularly striking to me was the divergence of approaches by dealership management system providers large and small.
Almost everything that happens at a dealership goes through its DMS. And that's where the drama was at NADA.
It started before the NADA Show opened, when CDK Global Inc. rolled out Drive Flex, a pricing plan for one- or two-rooftop dealership groups that links the store's fee to its performance that month. For CDK, notorious for its complicated pricing, it was a breakthrough.
But that wasn't CDK's big news. On March 22, it unveiled Fortellis, a network for dealerships and the software developers who want to sell to them that aims to emulate the Apple App Store. In theory, any developer that follows basic Fortellis protocols, and thus is confirmed as secure from hacking, can offer up its wares. And any dealership can choose Product A from one vendor and Product B from another, confident that all will work together in a plug-and-play style. Let a thousand flowers bloom.
It's rare for a company to launch a product it can't control, but that's what this is. CDK can't make Fortellis a success. That will only happen if software developers at automakers, other software companies and as-yet-unlaunched startups jump in.
Mind you, CDK is keeping its legacy products. But if Fortellis works as envisioned, CDK software will be competing with solutions offered via Fortellis.
Fortellis is "a fundamentally different approach" from Reynolds and Reynolds', said Kasi Edwards, Reynolds' vice president of marketing. She said Reynolds' preferred approach of providing everything a dealership needs, down to the phone system, is superior.
Reynolds' Retail Management System is "a platform where all of a company's services" and software "work as one," because they were designed to do so from the get-go, she said. That's a "huge benefit" in a world where, as dealers tell Reynolds, mixing and matching software can force a sales manager to input a car's vehicle identification number 12 separate times to complete one deal. "Running any business with so many vendors is beyond exceedingly difficult," she said.
Those two wildly different approaches weren't the only ones on display. Among other DMS vendors:
Quorum continues to roll out products while sticking with its straightforward pricing scheme. Dealerships' annual fees may go up, but that fee covers everything. All-new fixed ops software? It's included. No additional fees if a store wants additional features.
Dominion was quietly showing its Vue DMS, which will be in controlled release this year and go on sale to all dealerships in 2019. Dominion says it was designed to be significantly simpler than rival systems, and that it will charge stunningly low certification fees — at least, compared with those charged by CDK and Reynolds — for outside vendors wanting to operate their software on Vue. Its biggest selling point: It runs entirely on the Microsoft Azure Cloud, which Dominion executives repeatedly referred to as a "true cloud," not just off-site servers. Expect to hear a lot from them on why that matters.
Auto/Mate came out swinging as the NADA Show wrapped up. When the feds vetoed CDK's planned acquisition of Auto/Mate on March 20, they said one reason was that Auto/Mate has the potential to be a full rival to CDK and Reynolds. The former David, having been anointed as possibly the next Goliath, has a new swagger in its step.
Dealertrack, Cox Automotive's DMS offering, has completed the inward-looking work of coordinating with other Cox products. Now its webinars and workshops extolling how easy it is to change your DMS provider — really! — leave little doubt that it wants to conquest.
Competition among DMS vendors is nothing new. But in the past, it centered on prices and this feature or that. Today, the sales pitches are about alternative approaches and philosophies as much as competing software. To paraphrase the LendingTree ads, when DMS vendors compete, you win.