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Virtual Reality Is Coming… And Your Dealership Is Going!

There are already several plays by start-ups to build online powersports dealerships that sell and finance motorcycles nationally rather than locally. A few are focused on pre-owned motorcycles, but we all know that pressure will eventually force a paradigm shift in the traditional franchised business model.

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Did you catch the news in April when Long Beach BMW Motorcycles offered the first “Virtual Reality Experience” in their California showroom? Riders could take a virtual test ride on a variety of BMW motorcycles simply by strapping on some VR goggles. No insurance hassles, no wrecked demo bikes… no problem! Technology has dramatically changed the world.

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Even the artificially insulated environment of the franchised dealership will be under assault from “virtual” competitors before you know it. The fact is, larger, internet-savvy dealers already cross traditional territory lines by engaging in predatory marketing practices online, making it known regionally they are offering a better price, better service or better selection than
the local neighborhood dealer. You can go along for the ride or your dealership can go the way of the Dodo.

There are already several plays by start-ups to build online powersports dealerships that sell and finance motorcycles nationally rather than locally. A few are focused on pre-owned motorcycles, but we all know that pressure will eventually force a paradigm shift in the traditional franchised business model. The “online factor” for new vehicles is what tampers with convention by allowing a dealer to sell to customers outside his typical geographic franchise territory. These out-of-the-box dealers truly are thinking bigger and leveraging their power across larger and larger regions, using the internet to do so.

The internet leveled the playing field in non-motorized retail and is still wreaking havoc on chain stores, as several of my previous columns have detailed. So, let’s switch from PG&A products to the state-licensed powersports unit sales. Is it “cool” for customers to be able to complete a unit purchase online without ever actually speaking with one of your staff? Tesla buyers seem to think so. Extracting the “human element” from the sales process frightens some of us, yet we do it every day while clicking “Buy Now” for our favorite commodity or luxury products.

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Many modern customers don’t care much whether the “buy button” is for a Belchfire 2000 SUV, an XYZ branded helmet or a 24-pack of four-ply toilet tissue. The fact remains that if customers have all their questions answered – and objections overcome – they will make the decision to buy from home rather than in your destination store’s closing booth. Does a real human salesperson matter while buying anything anymore? Amazon doesn’t think so. Would the same concept work for pre-owned and new motor vehicles if they weren’t controlled and licensed by the state?

Tesla’s online business model delivers a new automobile to your house. Seeing a real unit at a mall-based showroom is optional because the entire sales process can be done online, avoiding all traditional sales interactions completely. We know some states are still wrestling with this concept, but most are beginning to accommodate it as long as it doesn’t break previous franchise agreements, which Tesla doesn’t have as a relatively new company. New brand, new business model = no baggage like franchise laws.

The new CSC motorcycles at www.cscmotorcycles.com are also available to be delivered to our home after an online experience – with the exception of the master importer, there are no brick-and-mortar showrooms available. BTW, CSC has terrific online presence, good spare parts and accessory supply, plus special events and a robust social media experience. These online vehicle retailers are getting better – right under your very noses.

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The latest entry into the online-only motorcycle market is www.revstop.com out of San Diego. Their press release dated March 1, 2017, offers a new website, which allows retail customers to “shop, finance and purchase a powersports vehicle without stepping foot into a dealership.” Sounds a lot like Tesla. “The online shopping platform replaces the dealership with technology, offering customers a wider shopping selection and potentially better savings.” The press release also states: “To start, the company will focus primarily on used-motorcycles, but as Revstop expands, it will offer a full selection of new and used recreational vehicles.”

Remember when the internet was new, there were two rules everyone was told to heed:

• Never input your credit card and personal information online for a purchase. Phone it in.  
• Never allow someone on the internet to know  where you live, to meet you or arrange to pick you up in their vehicle.

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So there you go! Someone in California is attempting to replace you and your retailing function with an automated website using menu buttons titled: Home, Inventory, Sell a Vehicle, Financing, Learn More and News. Can they really make that happen anytime soon? If they sell the sizzle of riding a powersports vehicle well enough, I believe they can. I recall prior to the “dot.bomb” era, an entrepreneur somewhat like this who was attempting to build a national network called e-powersports.com, which would deliver a new machine to your house anywhere in the nation. It never panned out because they only focused on price. It might be a different story now with smartphones and VR goggles.

VR is already changing the travel and fantasy sex industries… and as the case study with Long Beach BMW indicates, they will be able to offer virtual motorcycle demo rides your dealership can’t. If you can’t see that VR goggles are a threat to your livelihood, you may be suffering from what my old mentor John Wyckoff called “rectal myopia” – get a checkup, SOON!

Well, things change. Now your personal info and credit cards are well protected and used daily on the internet. Match.com, Facebook, Uber, Lyft and hundreds like them connect people-to-people and people-to-transportation all on a simple smartphone app in seconds.

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As behaviors evolve I wouldn’t put it past some established OEMs to create new “online-only brands,” which could go retail direct – online like a Tesla or CSC. Your 20- or 30-year franchise agreements with traditional brands would be protected, but as alternative go-to-market strategies change, look for distribution channels to change as well.

It probably won’t happen soon, but it will happen. Customer behaviors have been altered drastically in the past 10 years… and they will be altered again in half that time – five years, tops.

The virtual dealership experience is coming whether you like it or not. Get involved, or get out!

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