TrueCar is betting that car shoppers would rather use an app than spend hours researching vehicles across the web.
The internet is changing, and rapidly. The rise of artificial intelligence and the dumbing down of search means fewer people are actually sitting at a computer, typing a question into Google, and clicking through a list of websites (like this one!) to find an answer.
More and more, customers are turning to apps, social media, and AI assistants to get the information they need, rather than sorting through dozens of results. And major companies are starting to take notice.
In a recent interview with CarDealershipGuy (click the link to read the full interview), TrueCar CEO Scott Painter said his company is betting that the next generation of car buyers won’t want to search endlessly for a vehicle and submit a dozen leads to dealerships.
They’ll want to open an app, find what they want, and actually buy it.
Painter believes the traditional car-shopping website may have already reached the end of its useful life. Following TrueCar’s acquisition and return to private ownership earlier this year, he outlined a strategy that moves the company away from its browser-based, lead-generation roots and toward a native smartphone app. As Painter puts it bluntly:
‘I believe that search is dead… Consumers do not need four million answers to a question alphabetically or price ranked or color ranked or any of that.’
Painter argues that the current model is fundamentally inefficient. According to him, the average dealership may have to work through 75 to 100 leads before determining whether a customer is genuinely in the market for a vehicle.
TrueCar’s close rate is already significantly higher among shoppers who have completed more of the buying process, including evaluating incentives, financing, and trade-in values. The company says those customers currently convert at roughly 4 to 5 percent.
Painter wants to push that number to 40 or 50 percent, with the eventual goal of getting as close to 100 percent as possible.
With a smarter app handling more of the process, TrueCar believes it could dramatically increase the number of vehicle purchases flowing through its platform. The company currently moves around 350,000 people through its network for new-car purchases each year. Painter wants to increase that figure to between 2 million and 3 million over the next several years.
TrueCar isn’t just trying to put its existing website into an app. Painter says the company wants to build the technology and buying experience first, then aggressively scale the business once that foundation is in place.
The company has already cut its workforce from just under 400 employees to a little more than 200 and says it has stopped pursuing unprofitable growth simply to generate more leads for dealers.
Painter describes the current period as the second phase of TrueCar’s turnaround. The goal is to build the “engine” before flooding it with customers. He notes:
‘We don’t want to scale the business and go big with our affinity partners and really 10x the volume on the front end until I have the engine done.’
If Painter is right, the future of car shopping may involve a lot less searching and a lot more buying. For better or worse.
Motor1’s Take: Buying a car is a major financial decision, and shoppers should have the ability to slow down, compare vehicles, and read independent reviews. AI and apps can certainly make the process faster, but convenience shouldn’t come at the expense of research.
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Source:
CarDealershipGuy
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