The “Virtual” Showroom

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Computers aren’t going to kill us all – they’re just going to replace us.Virtual showroom image

Well, most of us.

I just read an article in Automotive News about Cadillac’s plan to turn many of its smaller-town dealerships into “virtual” showrooms. No cars actually there to see or test drive. Just tablets and such for prospects to virtually kick the tires and “learn more” (we’re always “learning more,” aren’t we?) about their prospective purchase.

Who needs salesmen? They cost money. Take days off. Complain.

Or even a dealership, for that matter.

Get rid of the building, too.

The “virtual” showroom could be loaded on any laptop. Just point and click, you’re there … even if there’s no one (and no actual cars) actually there.

Cadillac’s chief, Johan de Nysschen, says “We want to work with these small dealers to give Cadillac a competitive advantage in terms of reach into their local communities… but (here it comes) do so in a way that’s more closely aligned with what we think the Cadillac luxury brand experience should be.”dickhead

Italics added.

This is the same lingo echoing across the land that’s led to fewer people doing more work for less pay.

Competitive advantage. Right-sizing. Productivity enhancement.

Translation: Get rid of those useless-eater salespeople! Get the buyer to do everything. Show himself the car, “learn” about its features. Then make arrangements to buy one.

All online!

One wonders, though, how buyers’ questions about the cars will be dealt with? A computer will have stock answers to some questions but can’t deal with individualized queries.

Will buyers be directed to a call center in India?

What about your trade in? I guess that’s your problem now.

To “learn more,” click here… .

And what happens when there is a non-virtual problem with the car? You can’t, after all, e-mail the thing to the virtual dealership for service. Maybe they will send a technician to you instead? De Nysschen seems to be thinking along those lines. The virtual store is a way to “…immerse customers in a virtual brand experience, so that our dealers need not concern themselves with investing in showrooms and brand-element requirements, which clearly are cumbersome…”

But, cumbersome to whom?dominos

What if you live in an apartment complex or other such where they frown on guys working on cars curbside?  What if you don’t want oil spills on your driveway? What if you want to talk about your problem with a human being in person as opposed to a sweat shop worker in Mumbai?

De Nysschen maybe has not thought about such things. Or perhaps he has. Think of the money that could be saved! The increased profits!

Which would be ok – or at least, tolerable – if it meant the cars cost us less.

They won’t.

Just like you don’t get a discount for checking yourself out (and bagging your own stuff) at the grocery store.

The bastards simply fire the staff – and get you to do their work.

For freeeeeeeee!

They even charge you for air at gas stations nowadays. Remember when they had people working there to do that for you?

No charge, either.Bernie

But don’t rage against the market. We don’t have one anymore. What we’ve got is a government-gimped mess; a crony capitalist feeding frenzy, with us as the chum.

It’s much harder for a dealership to make money selling cars than it used to be because of the cost of government – everything from the endless regulations the store must comply with (EEOC, OSHA) to the taxes and fees it must pay (including Obamacare).

Instead of getting rid of the rigmarole so people could get to work, corporations have figured out that it’s easier to fire the people and let computers do the work.

Computers replacing humans is the last-ditch attempt by what’s left of the market to remain operational. But it’s fatally flawed because buyers can’t exist without being employees first. You have to earn money before it can be spent. The salesmen soon to be fired by de Nysschen will not be in a position to buy used Chevys – let alone new Cadillacs.

Over-the-road truckers are next in line.out of business

The government micromanages how many hours a human can drive – as well as how he drives. Human drivers also cost a fortune because of government-mandated “benefits” (Obamacare, again). Trucks that drive themselves – potentially, for 24 hours a day, seven days a week less stops for fuel and cargo loading/unloading – will be so much more productive.

But what will the idled truckers do?

Same goes for the copy editors and graphic designers in my field – journalism and publishing – who were replaced by software (the reporters and editors who remained tasked with doing those tasks without any increase in their pay) … und so weiter, across the land.

Few of these idled-by-technology workers will be visiting a virtual Cadillac showroom. Or maybe they will. They can pretend to be shopping. Imagining themselves driving the virtual car they’ll never actually sit in.

Goog-uhl glasses for everyone … and maybe a van down by the river, too!

The tragedy is the market will get blamed for what the government has done. And the solution – begged for by the people – will not be a return to market principles but a strident demand for more government. The success of both Trump and Sanders (feel the Berrrrnnn!) attest to this – and give us a hint of what’s to come.

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25 COMMENTS

  1. I have mixed feelings about this topic. I absolutely abhor the idea of buying a car without an inspection and a test drive. OTOH, I do not see salesmen as worthy of their rent-seeking jobs! They are merely massively overpayed store floor clerks that usually lie nearly every time the tell you something.
    Many if not most customers already know what kind of car they want when they arrive at the stealership. Why do people like them and myself need an overpaid cashier fluent in lie-speak to sell the damn thing to us?
    Back when I was a truck mechanic in the late ’90’s; a mechanic trainee would spend several thousand dollar in education and soon spend ar

    • I got interupted by a phone call and then I couldn’t properly return to my post. Anyway…
      Spend several thousand dollars and then soon spend $10K in quality tools and only earn around $30-40k after a few years experience where a salesman gets some education and buys a $2K suit and earns $100k while making promises he cannot keep?

  2. “And what happens when there is a non-virtual problem with the car? ”

    My guess is they will keep the service and parts department open or even expand them. Parts are a big business for car companies.

    As to financing, with all the claims of racism and whatever else replacing the financing personnel with an app is not a bad idea.

    Sales. How many good salesmen are there? My guess is the internet sells more cars these days anyway.

    Test drive. I don’t think you need a dealership to do that. Car rentals could do it. Want to buy one, rent it for a week.

  3. When I decided to buy my Audi, I went to the “local” dealer, about a 45 minute drive in the next town over. Not far for where I live. I also took a trip to Denver because the dealer there had a model in stock that was pretty close to what I wanted. They were prepared to deliver my car to my apartment in Aspen and pick up the trade. They do it so often that they actually have a car carrier trailer that makes regular trips. If the salesman hadn’t kept me waiting for an hour (scheduled appointment) I would have likely bought from them. Hey, if I’m going to pay too much for a car, at least kiss me first…

    I could see something similar for Cadillac’s virtual showroom. But the test drive will always be a problem, unless they just have one of each model all decked out.

  4. Solid Points Eric.

    As an engineer in the automotive industry, I have been saddled with a cell phone, which I must answer day or night. My promotion to a “senior” level just means that I get to spend an even greater proportion of my miserable life dedicated to the perpetuation of a dying, suicidal industry. All while sweating logic-less regulations some political science major shoves down our collective throats.

    And don’t get me started on dealing with the OEMs (I work for a Tier 1 supplier). It is obvious that the same management that drove them into bankruptcy the first time are still in charge. That’s what happens when you subsidies failure. Subsidies anything – get more of it.

    I read all these articles about how millennials don’t “like” cars.

    Newsflash: They can’t afford them

    Average new car transaction price has gone from 53% of Median Income to 61% since just 2009.

    A very tiny amount of this increase was due to actual consumer driven demand.
    By 2025, EPA dictates that CAFE must reach 54.5 miles per gallon. Not a single car achieves this today. Not even subcompact hybrids.

    What is it going to cost to achieve this?

    We can’t even do it today with stop/start, cylinder deactivation, active grille shutters, multi-turbo gas engines, underbelly pans, variable duration valve trains, hybrid/gas powertrains, and 9+ speed automatics with “highway idle” overdrive ratios. These overdrive ratios can induce drones so severe that Active Noise Cancellation is required just to make the drive tolerable. So now if you blow a speaker, it can sound like your car is broken.

    If even with all this overly complex BS, the industry still can’t make 54.5, where the hell is my job headed?

    Interest rates are already the lowest they can go on a swiftly depreciating asset. No more “hiding the price increase” with central bank manipulations. Nobody seems to believe my predictions of doom for the industry, but exactly WHO IS IT BUYING ALL THESE NEW CARS? WHO?

    My wife and I make several times median income and would never consider buying a new car now, even if they weren’t saddled with a thousand pounds of vision blocking crap we don’t need.

    I was a “car guy” even before I became an engineer. I HATE new cars now. I despise them. I hate the entire industry.

    One can only imagine what cars might look and perform like without NHTSA and the EPA.

    1985 Honda CR-X (40 City / 48 Highway) Carbureted no less.
    2015 Honda Civic Hybrid (44 City / 47 Highway)

    What miracles 3 decades, thousands more regulations, and a complex hybrid powertrain can achieve.

    Anyway – I’m looking for a new line of work.

    Keep up the rants.

    • CAFE is going to break.

      Route 1) Automakers stop playing. One giant will stop and then all the others will follow. Some smaller makes (like BMW) have already sort of dropped out. But that’s not enough. A giant has to do it. Just pass it on as tax on the cars or eat it. Either way the first giant to do it and the rest follow.

      Route 2) CAFE calculation becomes a farce. The 55mph NMSL was never obeyed in mass but according to government paperwork and reports it was. Why? Year after year the calculation to show that enforcement of the 55mph NMSL was working became more and more absurd and more detached from reality. But the farce the federal mandate was working went on for 20 years. They could do the same with CAFE.

      My guess is route 2. There are some signs of it already.

    • Amen, Blake.

      Your point about Millennials not being able to afford cars is, I think, spot on.

      I’m a Gen X guy. My cohort was able to afford V8 muscle cars (well-used, granted – but still) on a high school/fast food budget.

      Today, a crappy little FWD shitbox car costs a small fortune (especially insurance) and maintenance is forbiddingly complex/costly for a teenager just learning about cars. I know some (a few) do, but the ranks are much thinner now.

      I also hate most new cars. They are suffocatingly over-controlling, homogenized in styling and – powerful and fast as they are – lacking character.

      My ’76 Trans Am is a study in contrast. It’s not “safe” by modern standards but it has personality and character. Its drivetrain is approachable, even by a teenager.

      But my biggest gripe with the business is the way the managers amen every new proposal the government trots out. We love electric cars and hybrids! We need more air bags! Etc

      • eric, I’ve said this for a long time, new cars are not affordable. I see millenials driving old 80’s and 90’s stuff, saw some yesterday driving a ’75 Chevy pickup that was not in good shape. Pulling into a small town near dark I see a mid-70’s Chevy pickup that looked better than new. Yep, it was a subsidy farmer I know with plenty bucks and a passion for pickups.

  5. “They even charge you for air at gas stations nowadays.” Yeah, well they used to be called ‘service’ stations. Pump your gas, wash your windshield, check the oil and the tires. No more. Service? What’s that?

  6. It’s obvious now that they have lost sight of what stimulates buyers. Not only do I want to kick the tires, look in the trunk and under the hood(an engine cover now, not so great) but I want to sit in it and I want to “smell” it.

    At one time we locally had a Chevy/Buick dealership and a Ford/Lincoln/Mercury or maybe it was just a Ford dealership but the guy who owned it(my cousin)said he’d order you anything you liked, brand be damned(now that’s the way to sell cars). My whole young life I couldn’t get around the smell of a Ford but a GM had a completely different smell. Not saying both smells weren’t the cause of cancer just that I preferred GM cancer smell to Ford(I kill me….as Alf used to say).

    When people would cross shop and look intently at a Ford I’d always think “Gee, can’t you smell that?” I could still smell the difference of those cars from back then. I’m sure, and it wasn’t something spoken of a lot but those in the know knew about it, smell was one of the ways to lure a customer.
    I recall the old Wagoneer’s had a leather that smelled like no other. I liked it and liked a Wagoneer as long as somebody else paid for the way over-priced suckers. Put a GM a/c, engine and transmission in one and you have a winner.

  7. Insulated and isolated from human interactions is what the home internet is for. A brick and mortar showroom requires something other than a virtual 360 degree spin on a touchscreen. Yawn, a show room with nothing that can’t be done at home. Customers go to the dealer for a spin around the block. The good salesman will hypnotize the customer in the driver’s seat while that new car look, smell, feel and sound sells it. Here’s the color you’re looking for, drive it home today! No one buys from the tiniest inventory in the state or comes back for another visit.

    Cadillac used to be luxury automobiles oozing with glamour and style wrapped in the sex appeal of unbridled power. They used to spin slowly on turn tables in beautiful showrooms. Now they are upgraded Chevrolets with the illusion of being something entirely different. If the plebeian heritage must be disguised with virtual reality, that will not play well upon delivery.

  8. About 20 years ago I needed a simple handle for a piece of plywood that would act as a cover for my well hut. I went to Loweshomedepot and it took me nearly a half hour to find it. When I asked I was repeatedly sent to the “knob” department where all the ceramic rose adorned knobs lived with their brass and brushed aluminum brethren. Finally I found what I needed in the “hardware” department.

    It hit me then, we don’t live in a “service society”, we live in a “SELF-service society. If you don’t know what you want, woe be unto you. Ain’t nobody left to help you find it in the BigBox store. The good news is a guy bought a failing hardware store here in town, he’s doing quite well, knows lots of tricks and loves to help. When the stocks tank and the bigbox goes dark, I have a feeling he’ll still be telling you how deep the frost goes around here.

    https://www.youtube.com/watch?v=bgs3tqIEwAU

  9. Sounds about right, now that they have product worth buying, find a way to tank sales – isn’t this always the GM way. That said, I do think the old way of selling cars is way over-due for an overhaul; however, I think Lexus is closest to getting it right. Make your dealership somewhere people want to visit.

  10. One of the things that is trendy (at least among those running them) in the retail world is fewer locations in “key” places rather then more locations everywhere. It works best if you are an upscale retailer or are a very strong brand name, like Apple. Note that Apple is only on the “best” shopping streets and A+ class regional sized malls. That means most people are NOT located anywhere near one of their stores. They won’t even locate in a class B mall even if its the only regional mall in a trade area.

    They are hoping you’re willing to be a tourist and come to them. So in many ways they are running showrooms (though Apple has about the highest sales per square foot in retail). The model does work for Apple.

    For example Apple has quite a few locations in the Chicago area. However if you don’t live on the north or west sides, there isn’t an Apple store near you. They are all bunched up basically in one area of the Chicago area, not spread out somewhat evenly. I understand the rational for locating like they do (near the biggest pockets of the very wealthy of the area), but its very shortsighted in the long run.

    They don’t seem to care that it basically annoys all those NOT living near one of their stores because their customers are not just wealthy people. I live just across the border in Indiana, and all the Chicago area Apple stores are not convenient to anyone here. Even though the Indiana side of the Chicago area has nearly 800,000 people (would be a good sized city by itself if it wasn’t touching Chicago) there is zero Apple stores. So since there is no class A mall and the wealthy people in Indiana don’t live bunched up like they do in Illinois, no Apple store for you. They consider the area “covered” by the Illinois stores. The reality is they are for the most part, not covered at all. I find it annoying there are no places to see their products near me, and if I go to one of the Illinois stores, it costs me more the the cost of getting there because Illinois sales tax is nearly double that of Indiana. I have even told one of the GM’s of the Apple store in Illinois why I wasn’t ever going to buy here.

    What Caddy is hoping they can do what Apple does. Be in only a handful of locations. No more small town (or most suburban areas for that matter) dealerships where they struggle to sell a hundred cars in a year. They want the location where they sell that in a week. Will it work for them as good as it has for Apple (its clear apple doesn’t need my business)?

    I don’t see that happening. Cadillac is no Apple. They aren’t even Lord and Taylor. I don’t think they have enough customers to give up local locations, plus you HAVE to be wealthy to buy Caddy. They will lose people who will want a local location, even if its small. I know someone here who really liked a Land Rover, but she won’t be buying one. Why? Land Rover hasn’t bothered to open a local dealer and that is a deal breaker in her eyes.

    I think in the long run it will cost them more sales then it gains them. Apple runs circles around Dell and the like, but Caddy doesn’t do the same in the car world.

    • ” it will cost them more sales then it gains them.”

      THAN it gains them, richb. Then and than are different words which have different meanings.

    • Apple also has “stores” in Best Buy and shelf space in Target (along with any wireless carrier store for phones and tablets). Where it becomes messy is when you need to use Applecare. Then you’re stuck either shipping it back to Apple’s repair center or schlepping it to the store to meet with a “genius.”

      But the whole point of the Apple store is that it is a special occasion.

      • “Then you’re stuck either shipping it back to Apple’s repair center or schlepping it to the store to meet with a “genius.” ”

        Yep. The closest Apple store to me is 45 miles away in an upscale West End mall. You can’t get service by walking in, you need an appointment, and you’ll wait an hour or so past your appointment time for one of the insufferably arrogant teenaged geniuses to tell you that your Apple device has to be shipped out for repair.

        Maybe Apple has to have their stores in areas where SWP or Urban minority types hate to shop, just to ensure the safety of their snotty assed little techies, who would get their asses whipped in most retail locations.

        Anyway, since the lines were drawn between Mac and PC, my attitude has always been “Fuck Apple”. I wouldn’t wipe my ass with anything they produce, even if Apple devices were free and toilet paper had become unavailable.

    • I agree that they’re going for more of a premium buying experience. They’ll probably terminate the franchises of dealers who aren’t willing to spend a half-million on improvements to their showroom, or aren’t willing to have a separate Cadillac building and sales staff (“advisors”) from the more plebian GM lines.

      The other thing I see them doing is changing how the cars are sold. Rather than buying one off the lot, you will commission a car, and it will be built to-order for you. It’s the difference between buying at Men’s Wearhouse and visiting your Savile Row tailor.

      This means the dealers will no long have the lot carrying-cost (other than for a few well-equipped demonstrators) so it helps their bottom line. But it also means that impulse buys are no longer possible.

      If Cadillac can have a matching improvement in design and build quality, I think they’ll be very successful with this strategy.

  11. Well, if I were to buy a new car … which I have no intention of doing, since slightly used cars are way cheaper … I’d want to actually test drive it.

    Which a website can’t do.

    Seems like a doomed project — unless this is an endrun around regulations against people buying cars direct from manufacturers. Which I imagine dealerships will lobby to kill before it gets started.

  12. Caddy wants to eliminate physical dealerships so potential customers cannot test drive the actual product? Then they would worry even less about building a decent car.

    They could sell a real piece of s**t….at least for about half a year. Seems like that’s the direction they’ve been headed for three decades. But this quickly should bring things to an ultimate conclusion.

    • Caddy wants to eliminate physical dealerships so potential customers cannot test drive the actual product? Then they would worry even less about building a decent car.

      They could sell a real piece of s**t….at least for about half a year.

      Who gives a shit about customers anyway? They’re just nuisances who demand that businesses WORK for their money by furnishing a product or service. This just costs businesses money by making them have to hire employees, which is murder on the bottom line. If customers would just leave their money in the cash register and go the hell away, then all would be right with the world. But noooooooooooo … they actually want something in exchange for their money, the greedy and unreasonable bastards! Who the hell do they think they are?

  13. The market gets blamed because people refuse to inform themselves. The media and the schools tell them these are market failures and they believe that at face value. They don’t learn what led to it. If the businesses complain the media attacks them. The media sets the frame. Government says it is illegal to hire a person for less than X. Any job with an economic value lower than X either has to go undone, eliminated by capital equipment, rolled into the job of someone else, or left to the customer to do.

    A company could just pay more than the economic value of the job but then it has to fire other people to keep things profitable in the net. Look at Walmart. The constant attacks resulted in them raising pay for the lowest paid positions and they fired people at the home office as part of the program to deal with the expense. They also squeezed suppliers who fired some their people to cut costs. So for shelf stockers to make marginally more, better paying jobs they could have moved up to were eliminated.

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