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Differences between traditional retailer and dotcom fading

"Make no mistake, the internet is one of the best marketing and sales fulfilment channels in the history of the automotive industry. After all, it's convenient, cost-effective and accessible 24 hours a day, and how many showrooms can you say that about?

Of course, there are other advantages to using the internet as a fulfilment channel, in addition to the usual arguments about it being the perfect online catalogue to promote your business and stock. Principal among these is the fact that, using the internet as a shop window provides a huge cost saving. Of course, this is true to an extent, as there's no need for expensive premises and dealer forecourts, while staff can remain fully deployed in customer relationship management, rather than waiting around for a punter to come through the door.

But, there again, it's surprising how much it costs to develop and maintain a good website. And, if you're serious about nurturing satisfied customers, you need to have some decent stock levels. Otherwise, the lowest prices in the country won't help support a business that keeps its customers waiting endlessly for cars that might or might not arrive.

In fact, as many of the smaller internet retailers have discovered to their cost, customers still expect the same consistently high levels of service, regardless of what they are paying. Thankfully, several web-based retailers had the wisdom to take this advice on board, and have flourished as a result.

But all businesses must evolve and, as the market becomes ever more sophisticated, there will be a blurring of the distinctions between the conventional – if that is the word – dotcom, and the traditional retailer. Now that the successful internet dealers have had the opportunity to raise their profile to the status of a nationally known brand, they would be foolish not to exploit the opportunities that this provides.

It's no secret that some web dealers are already looking at acquiring bricks and mortar outlets, as a way of capitalising on their brand names. But, that 's not meant to sound like another nail in the coffin of the traditional independent or franchised dealer. On the contrary, many of these sites will be acquired from, or even in conjunction with, existing retailers. And that' s only one way in which the boundaries are being redrawn.

Private buyers only represent a small proportion of the overall car-buying public. It's no different for dotcoms, of course, so many have realised that they need to offer trade services as well as selling to the man in the street. Market share is therefore being built on the back of supplying the independents, some franchises and even car supermarkets with well-priced, desirable stock, especially of prestige vehicles, where there is less need for discounting, and the margins are correspondingly better.

And the demise of the dotcom? Well, it's a very over-rated prediction. The online brands that have done well so far are very much here to stay. But it' s true to say that we'll also see inroads from other alternative channels, with evaluations and pilots being developed and explored by other businesses. For example, I believe that finance houses and other similar channels will start selling direct, especially as a ruling on Block Exemption comes closer."

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