March 23 FOCUS: Automotive

Randy Kennedy of Southern Motor Co. says the internet allows the dealership to reach more customers. (Photo/Southern Motor Co.)

By Patrick Hoff
phoff@scbiznews.com

Jim Gerow was running a Subaru dealership in 2007, working seven days a week, when he decided that he needed to see his family more.

“I called the owner ... and I just told him I wasn’t going to work for him every day of my life,” Gerow said.

Shortly after that, he set up his own dealership, Charleston Auto Sales, which he has run ever since.

Though Gerow had enough clients at the time to start the business, he said he wouldn’t have made the decision to set off on his own if he didn’t have the internet as a resource.

“I wouldn’t have made it,” he said. “There’s no way, not with one person, because ... I don’t do any billboard advertising, or any television or radio, or any electronic media as far as the normal advertising. It’s all internet for me.”

Car dealerships across the Charleston region say the internet has given customers better access to information, which makes selling cars easier.

“It gives us prospective buyers that we’ve not ever had a chance to see before,” said Randy Kennedy, sales manager at Southern Motor Co. in North Charleston. “People that we may not have ever gotten to talk to because they’re in a different state, sometimes even a different country.”

Gerow said his customers sometimes know more about the vehicle than he does because of the amount of research they’ve done — also on the internet.

“The internet allows them to do research in a way more convenient and timely fashion and not just go into the car lot blindfolded and hope for the best or try to negotiate a deal,” he said.

Carvana customers buy cars online and have them delivered to their homes. (Photo/Carvana)

All that information can sometimes make it harder to sell a vehicle, Gerow said, but it also allows him to run his dealership in a more hands-off way.

“The customers do all the work here,” he said. “Like I might give them a set of keys and put a temp tag on their template. But they walk around the lot with the website pulled up on their phones ... and most of the time I don’t even go out there.”

Sometimes Gerow will lose a client because of this approach, he said, but most customers enjoy it because they can spend time looking at the cars without a salesperson breathing down their neck or twisting their arm.

“It’s the opposite of what I was trained to do my entire adult life,” Gerow said.

Another change in the business of selling cars is the amount of knowledge that younger car-buyers now have,
years before they can legally get their license.

“I mean, they have their smartphones out, they know as much about my inventory, if not more, than I do,” Gerow said. “And I’ll just point to them. If the parents ask me a question, I’ll just point to the 13-year-old and he or she will know the answer. If they don’t, they can have it in 10 seconds.”

Kennedy said the internet has also forced dealerships to focus on customer service instead of how much money they’re making on each automobile.

“It makes good service more prevalent,” he said. “You can’t do the things that dealerships in the olden days used to do and just try to just beat on people and abuse them into buying a car, make them feel bad about buying a car, or in some dealerships that I’ve even dealt with ... that you should feel privileged to buy a car from them because of how big they are.”

Online reviews have also influenced the way dealerships operate.

“If you have all bad reviews or mostly bad reviews, that’s another speed bump that’s probably going to make them try another dealership,” he said.

Gerow set up his system so that when he posts vehicles on his website, it populates marketplaces, such as AutoTrader, Kelly Blue Book and CarGurus. He said that is the only way he’s able to be successful.

“That’s the only way I can do this by myself,” he said. “I have ... a title clerk and she helps me buy the cars. That’s probably the most time-consuming.”

Kennedy said some might believe buying vehicles online and having them delivered is the way of the future, similar to the way national company Carvana operates, but he doesn’t think it’ll work for used vehicles.

“I think that the internet is a great way to do your research and get ideas of what you’re looking for,” Kennedy said. “But to purchase a pre-owned vehicle without driving it, without looking at it, I don’t think that that’s going to end up being the final way that everybody ends up handling everything.”

Amy O’Hara, associate director of communications for Carvana, said the automotive market is fragmented, and Carvana is trying to fill a specific niche.

“There are a lot of players doing a lot of different things,” O’Hara said. “We’d like to feel like we are the present — not necessarily just the future — but the present of the opportunity that customers have for car buying.”

Carvana allows customers to inspect used vehicles in a 360-degree view online before purchasing it and having it delivered to their home.

The company also allows a customer to return an automobile within seven days for any reason.

“You don’t get that with a test drive, kind of the four right turns around the dealership block,” O’Hara said. “So a seven-day return policy gives customers the peace of mind but also the opportunity to confirm this is the car for them.”

Kennedy says he sees the internet as just another platform to provide good service to people.

“The car business is going to constantly change, but in the end, even with the internet, you still have to provide a service and provide a customer experience that is above everybody else’s and make sure that you take care of your clients,” Kennedy said.

Reach staff writer Patrick Hoff at 843-849-3144 or @PatHoffCRBJ on Twitter.

Coming up in the print edition
of the Business Journal:

• April 6: Education and Workforce Development
• April 20: Architecture, Engineering and Construction
• May 4: Hospitality and Tourism