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Ignoring the Obvious

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(Speaking of the obvious, some elements of this post will be best viewed on a desktop device. Some services haven’t updated from the past. Sorry!)

Over the weekend I was lamenting to my wife that a good portion of my business conversations (automotive and nonautomotive) start with “I’ve been in (insert industry) over 20 years,” which is then followed by a combination of conjectures, gut-feelings, expletives, inferences, and hearsay…anything to get them out of accepting the fact that consumers are changing daily. My wife then responded by saying “just because I’ve been breathing oxygen these past 32 years doesn’t make me a pulmonologist.” Of course, I adamantly agreed with her (quickly re-proclaimed my undying love), and then asked her the question: When will people stop ignoring the obvious?

I don’t mean to sound like Captain Conspicuous when I say that consumers spending habits have changed markedly in the past ten years, and by galactic proportions in the last twenty. Whether it’s saving time, money, and/or energy, consumers are steadily making more transactions online every day. And, the ubiquity of online purchases occurring from smart devices is in hyperdrive. While the websites, applications, and connected devices has ebbed and flowed, the one thing that hasn’t changed is constant consumer attraction. Our buying behaviors have changed whether you’ve noticed it or not.

As opposed to writing an overly-lengthy op-ed piece (the shoe fits), I thought I’d conduct a little research, and share the data. It didn’t take long to realize most research (especially in Automotive) doesn’t have a sufficient sample set to truly drive the point home, so I decided to look outside the box. In order to keep things clean and simple, I decided to look at publicly traded companies that derive the majority of their revenue from Internet transactions. Thanks SEC.

Here’s a sampling of companies who do all of their business online (you’re looking at revenue, not stock prices):

Here’s a sampling of companies who make a significant amount of money from online sales:

Apple’s iTunes (including apps and software) accounts for around 8% of revenue ($12.9 billion in 2012). If iTunes broke from Apple, it would be mid-pack in the Fortune 500. Google makes the bulk of it’s money off its sites and advertising, however about 4% (or $1.5 billion) comes from other activities such as Android and its Google Play service. Like Google, Pandora’s revenue is heavily tied to advertising, however 22% of its revenue comes from its radio subscriptions. Some people will actually pay to get something that’s available for free.

Do you see any of these charts going downward? Did the economic downturn drastically effect these companies? Do these companies withhold pricing information? Do these companies suppress comments and ratings? Do these companies make it hard to spend money on their Internet properties? Nope. The clicks keep coming, the dollars keep flowing, and they all keep coming up with ways to make it easier on the consumer.

If you are working at a car dealership, you’re probably saying to yourself, grumble, grumble, people aren’t spending car money online, grumble, grumble. I’d argue that you are lying to yourself. According to the census (the original Big Data), about 6% of all retail purchases ($64.8 billion) are made online. When added up, that’s car payment money for most households, maybe even two lease payments.

Whether you like it or not, people are moving on with their lives. As new channels of commerce are opening, people and tools are evolving to take advantage of them. Instead of wistfully looking to the past, position yourself to take advantage of the future. Stop ignoring the obvious. The Internet consumer is all around you. Take your 20 years of experience, and join the human race.

Bill Playford • October 25, 2013 • Digital Marketing

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