Scion is looking to make waves on the Internet with the revelation that it is interested in shaking up how its dealerships do business online. Internet car sales are an important part of the vehicle industry, but it is rare for an automaker to encourage its dealers, as Scion is doing, to adopt a direct retailing strategy alongside its more traditional network of online partnerships and website listings.
What makes the new Scion online sales initiative so unusual? Scion is encouraging its dealerships to model its online activities after the Amazon.com retail model. What this means for new car buyers is that they would be able to directly access an Internet vehicle configuration site, which would allow them to build the exact vehicle they are looking for right on down to the options, color and interior specifications. A report published by The Automotive News details how the order would then be sent out across Scion’s dealership network until a matching vehicle was found in nearby inventory. The car would be priced using a “no-haggle” system (borrowing a turn of phrase from the now-defunct Saturn brand) and delivered to the buyer after payment had been made.
The idea of removing physical dealerships from the car buying processing is somewhat alarming to established franchise owners who have honed their craft and centered it around their presence and reputation in their communities. Scion does not intend, however, for these types of online retail sales to replace dealership sales – rather, Internet sales would be a complementary strategy. The automaker has also cautioned that the idea of online retail car sales should not be misconstrued as being similar to what BMW has offered with the 2011 BMW X3, which can be built to order in a matter of weeks. Scion vehicles are assembled in Japan, which would introduce too much lag to provide a competitive “a la carte” ordering system.
The push for Scion to connect with a more online-oriented demographic reflects the struggle that the brand has had in recent years while attempting to connect with younger drivers. Although initially positioned as a car maker focused on quirky and cutting-edge styling, the passage of time saw the average age of Scion buyers eventually crest 40. Although it is now sitting at 39, only one Scion vehicle – the Scion tC – enjoys an average owner age of less than 30 years old.
It is clear that a Scion online retail experiment would not disrupt the role dealerships play in selling automobiles for the company. While it could add an extra dimension in the sense that dealerships might end up servicing vehicles that they technically never sold to that particular customer (creating a unique relationship between owner and staff), most new car buyers will still head to dealers for test drives and research – at least for the foreseeable future.
It is also unlikely that Scion’s gambit would disrupt current Internet sales and advertising strategies, as websites devoted to serving up vehicle research information, price quotes and connections with local and national dealerships play an important role in the online car sales ecosystem. Scion’s decision to take a risk and embrace something new – after several years of somewhat conservative sales and design decisions – could be an indicator that Toyota is once again willing to give the brand additional breathing room to push the boundaries of established auto industry practices.
