Why online sales outlets want to ‘disrupt’ things
Take a quick drive through most communities with more than a few traffic lights and you’ll likely find what dealers might describe as “car row.” You know; it’s that stretch of retail-filled highway where franchised stores especially are clustered together.
Well, a wide array of companies are bolstering their resources to take on “this new challenge of disrupting the automotive industry with technology,” in an attempt to eliminate the need for thousands of square feet of brick-and-mortar retail space that often highlight a city’s commerce center.
The latest development arrived on Monday when Vroom — an online used vehicle retailer that has raised $73 million equity funding — added a trio of executives from well-known websites.
Michael Akrop, who previously led the finance team at Zappos, will be aboard as Vroom’s first chief financial officer.
In addition, Paula Buzzard, who worked in product development at Google, will serve as the company’s first chief product officer.
Furthermore, Emily Scott Frankel, formerly vice president of digital marketing and innovation at KAYAK, will serve the company as vice president of marketing.
“We’re thrilled to be expanding our leadership team with three hires who have deep experience at some of the most successful consumer web properties in the world,” said Elie Wurtman, executive chairman of Vroom. “We look forward to welcoming Michael, Paula, and Emily to the Vroom team and learning from their vast expertise.”
Each of the new executives described their enthusiasm about joining Vroom, which reported that sales for the month of May came in at $20 million, propelling it toward what it expects to be a $300 million sales year for 2015. But perhaps Frankel’s comment might be the gauntlet thrown directly at dealers.
“I’m excited to help Vroom ramp up its marketing efforts and use data to improve the customer experience and help spread the word about the company’s unprecedented innovation,” Frankel said. “I’m eager to apply my experience with bringing the travel industry online to this new challenge of disrupting the automotive industry with technology.”
Meanwhile, Akrop was previously VP of finance at Zappos where he oversaw the financial operations of the Zappos family of companies, reporting directly to CEO Tony Hsieh. Since 2006, Akrop played a leading role in restructuring and optimizing the Zappos finance organization into various specialties.
Akrop didn’t hold back when aiming Vroom’s target directly at dealers.
“I see a lot of parallels between where Vroom is today in the automotive industry and where Zappos was in the retail industry 10 years ago,” Akrop said. “There’s a huge demand for this type of service, and I’m excited to help Vroom transform the car buying experience to make it as easy and enjoyable as buying a pair of shoes.”
Vroom certainly isn’t alone in trying to muscle in where dealers have thrived for decades. Following its most successful quarter ever, Carvana announced back in May that it expanded its footprint to meet customer enthusiasm for buying vehicles completely online.
Carvana expanded to Texas, doubling its capacity with a new 30-acre operations center in Dallas. With the new center, the company can now offer free next-day delivery to Dallas-area customers, on top of shoppers in Atlanta, Nashville, Tenn., Charlotte, N.C., and Birmingham, Ala.
Companies such as Vroom and Carvana are catching the attention of other online outlets that cater to consumers whose connection to the Web is as vital as the air they breathe.
Earlier this summer, a website called The Cheat Sheet posted a commentary titled, “10 New Car Trends Taking Over the Automotive World.” At the midway point of the rundown, the site touched on Telsa’s ongoing pursuit of retailing its electric vehicles directly to consumers without dealerships. The segment came with a description that might dealer principals upset, stating the trend was to “Eliminate the Middleman.”
Now before dismissing the sentiment as a single blogger, The Cheat Sheet contends it “is the largest and most comprehensive modern man’s premium lifestyle site.
“The Cheat Sheet is the ultimate, high-quality set of time-saving cheats/guides to everything modern men want, need and ought to know, do or buy so they can get the most out of life.”
So as if dealers didn’t have enough challenges — compressed margins and rising costs to remain compliant and efficient — perhaps now store managers and owners need to keep a close watch of operations that have a minimum physical presence but likely a growing online footprint.
“Elevating the experience of buying and selling your car online is crucial for Vroom in its quest to disrupt the automotive industry,” Buzzard said. “Our goal is to make the mobile experience in particular as convenient and delightful as possible.”