In this episode of the Cardiallorship Guy podcast, host Sam Darkseo from Ziegler Auto Group dives deep into Sonic Automotive's partnership with Amazon Auto to revolutionize car sales. Jeff Dyke, President of Sonic Automotive, and Matt Newford, Director of Amazon Auto, join the conversation to discuss the motivations, processes, and challenges of this groundbreaking collaboration.
Newford explains that Amazon's foray into the auto industry stemmed from consumer demand for a more transparent and integrated online shopping experience for cars, echoing the existing online shopping trend. Dyke emphasizes Sonic's belief that technology is lacking in the auto retail space, particularly in digital retail. He praises Amazon's focus on creating solutions that enable customers to buy cars from A to Z online or blend online and in-dealership experiences.
The conversation addresses concerns about Amazon potentially bypassing dealerships through direct OEM relationships. Newford firmly refutes this notion, stating that Amazon aims to provide dealers with a marketing platform to connect with consumers, preserve dealer relationships, and maintain profitability. He emphasizes the importance of dealerships for servicing vehicles and believes in the omni-channel nature of car buying, where customers can choose their preferred shopping method.
Dyke highlights franchise laws that protect dealerships and praises Amazon's recognition of the dealer body's knowledge and experience in financing, paperwork, and manufacturer relationships. He acknowledges the complex nature of car transactions and expresses confidence that collaboration will improve the customer experience, making it easier and less stressful.
The discussion turns to concrete results and challenges faced since implementing the Amazon Auto partnership. Dyke admits it's still early, but the initiative has spurred his team to think differently about online car sales. A key challenge is maintaining finance and insurance (F&I) product penetration rates at levels comparable to in-person sales. He explains that customers aren't buying warranties at the same rate online due to the lack of personal explanation and emphasizes ongoing efforts to use technology and AI to solve this issue.
Addressing the challenges, Matt acknowledged that designing a customer-friendly experience while remaining dealer-friendly is a fun challenge. Further discussions focus on how to maintain that high customer experience that the two companies pride themselves on. The topic of customer service index and its use as a measuring tool for the success of the experience, and it's implementation. The host also asks Jeff how exactly the salesmen is paid during this transaction.
The importance of Penny-perfect is reiterated so that the experience for the guest showing up at the dealership is seamless as possible. There is also the idea that is explained of creating the great Amazon experience and the great dealership experience at the same time. Further, to make sure the dealership team creates a great Amazon experience for that, for that guest when they come in, there is a challenge to the dealership staff to create an Amazon parking spot for consumers and a identified area for the consumer.
The data ownership for Amazon, if it sells the used car, is discussed at length. Everyone asks that question as part of the process. But the data can be used by both sides to benefit the experience for all parties involved. Data as not just a proprietary idea, but the data can be used to enhance the experience for all involved. A potential buying used car marketplace or the way to deliver the experience is also up for discussion.