Arrangement lets GM sell online without bypassing its 220 California-based dealers.
As it emerges from bankruptcy, anyplace GM can sell cars is a good place. Its new agreement with eBay, announced today, may have an unexpected bonus hidden in its undercarriage: customer data.
Strictly from an e-commerce and Internet marketing perspective, the deal gives GM the ability to sell directly online through eBay without bypassing its 220 California-based dealers. It also puts eBay Motors in the position of selling all GM models through its traditional "Buy It Now" function (where shoppers agree to pay the advertised price) and its "Best Offer" option (where buyers indicate the price they are willing to pay and can negotiate online with the dealer for the vehicle).
The relationship is only a test. The offer is limited to California for the time period of August 11 to September 8, and GM execs told CNN in July that it could be rolled out nationally, if it works. It will move cars in California where the recession has been particularly tough, and it will also generate critical pricing and model preference data from the 12 million eBay motors unique users.
Customer data was part of the reason GM launched the eBay program, according to a statement by Mark LaNeve, GM VP of U.S. sales. "As the dealer showroom expands from the parking lot to the laptop, this makes it easier for a customer to browse available new-car inventory, make an offer, buy it now, or send a message asking for more information from a dealer -- all at the customer's convenience," he said. A recent J.D. Power & Associates study found that 75 percent of new-vehicle buyers in 2008 used the Web during their shopping and research process, compared with 70 percent in 2007. The study also found that 2008 marked the largest year-over-year increase in online automotive shopping since 2000.
"The eBay GM deal is a good example of how the automotive companies are trying to become a lot more targeted with their marketing, and in order to do that they need to collect customer information and respond to it in real time," said Acxiom automotive and high-tech VP Tim Longnecker. "They have been trying to pull people back into the market and this 'cash for clunkers' program has expanded business dramatically."
The timing for GM's online push may be prescient. A new study from marketing service and research firm Acxiom has found that 73 million US car owners may currently be in the market either because they are interested in the "cash for clunkers" program or because they have held off buying a car during the economic slump. Acxiom ties the effectiveness of marketing to this huge group to effective customer segmentation, which will need to come from the kind of data GM and eBay can generate. For example, Acxiom predicts that the "single urban" customer group, although it is the ninth biggest overall demographic group in the country, will account for 21 million new auto customers over the next 12 months.
eBay will locate the GM program at the sub-domain gm.ebay.com. Most of GM's brands (Chevy, Buick, Pontiac) are sedan-heavy. Current best seller sedans on eBay (according to the company) are Honda's Civic and Accord models, followed by two Mercedes models and BMW.
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Wednesday, July 23, 2014