TrueCar embraces many lanes to purchase

LAS VEGAS — TrueCar CEO Mike Darrow said he thinks of the ways that consumers connect with dealerships like swim lanes in a pool.

On the far left is the traditional lead model, in which would-be buyers submit their name and contact information to a dealership. Next are digital tools that enable them to do more of the transaction online. On the far right is the express lane, where customers could complete an entire transaction online.

TrueCar is working to create ways for customers to switch between lanes as they want or need to interact with a dealership. The vehicle listings company's new TrueCar+ digital retailing tool allows consumers to choose a vehicle, set up financing, add protection products, arrange delivery and complete a transaction all primarily within TrueCar's platform. It started as a pilot in Tampa, Fla., in September and was expanded to a few other parts of that state for a public launch in March. TrueCar plans to roll out the tool to more markets this year.

"The traditional business will exist. This express business is what everybody's talking about and what TrueCar+ is. And then there's a whole lot of business in between there that we'll facilitate with dealers as consumers get more comfortable with these tools," Darrow said.

"The good news is, as we describe that to the dealer, they go, 'Well, all this business ends up with us. No matter which lane they pick, it's business that ends up with us,' " he added. "They're beginning to see consumers using digital tools are more efficient for their sales process. A sales process doesn't need to take four hours."

Darrow, 64, spoke with Staff Reporter Lindsay VanHulle at the NADA Show here in March about TrueCar+, digital retailing and how TrueCar aims to differentiate itself from other listings sites. Here are edited excerpts.

On third-party vehicle marketplaces:

There was a point in time where the third-party sites were seen as competitors — and sometimes the bad guys — to dealers because they thought you were driving prices down. That's beginning to pivot in a meaningful way. And the reason I believe that is they're all scratching their head on how to compete with the new tech — the Carvanas, the stuff that's come into the industry. How [many] resources do I have to put to it? Is it a software solution?

Our strength will always be our brand and our 8 or 9 million monthly [unique visitors]. And then when you combine that with our dealer network, that's where we have all the tools that we really need to put everything together and create that marketplace.

Dealers have come to the realization that companies like Carvana, like Tesla — that's not a fad. They're too big, they're too strong. It's the real deal. That's where the industry's going. The expression I'm using with our folks is we can take the black hat off and put the white hat on. We're suddenly the good guys because we have solutions. We can start to help these guys come on and compete in a very quick way.

On digital retailing:

Because you have a trade tool on your site or because you allow someone to calculate payments, that's not digital retailing. Those are digital tools. They're helpful for consumers. But if you really want to be a modern-day marketplace, you've got to connect all of those things in a way that makes sense. What we're learning is, we tried to define the car-buying process as linear, and it's not. Not when you're at home. It may be if you're in a dealership, but at home, people go partway. They got to take their kids to school, they take a break, they come back, they have dinner. So you've got to build this marketplace in a way where it's friendly for people to use. They can go in and out of it when they want to. They can go as far as they want in a digital way.

On what's next for TrueCar+:

Initially, the software and technology behind TrueCar+ will just be on TrueCar. We are getting some requests: Are we thinking about a version for dealers? Where we white-label a process for a dealer? That would kind of be next-gen stuff for us. We're really focused on getting our marketplace right first.

We haven't exposed this to any of our partners yet. We've told them about the product. They're excited. American Express, Sam's Club, they're all really excited to have this opportunity.

On delivery and shipping:

We're doing some delivery testing in Texas. TrueCar+ will ultimately have a delivery component to it that we provide so that the dealer doesn't have to worry about it.