The Performance Auto Group is betting big on the future of used-car retailing.
The southern Ontario-based dealership group, which operates more than 25 franchise stores, has bankrolled the creation of Zoom.ca, an entity its management team suggested is the first in Canada to allow consumers to buy a vehicle from end-to-end including home delivery entirely online.
“We had seen what was happening in the United States and we made a commitment that we wanted to be the first in Canada to bring this to Canadian consumers,” said Drew Delaware, co-founder and head of marketing and product development for Zoom.ca. “We invested a lot of resources into making it happen.”
Announced in late October, the website lets users browse inventory by body style; narrow the search terms and inventory will appear with available payment terms automatically loaded into the listings.
Users can choose to search by payment type (finance or cash), monthly payment size to a max term length or look for a specific year, make or model.
Select a vehicle and a detailed VDP will appear with finance info, technical specs and personalized payment options. Shoppers can “interact” with the vehicles through 360° spins inside and out.
After inputting an estimated trade value and clicking to buy, shoppers can review the purchase details, organize delivery and deposit, complete financing and add protections.
Zoom will then deliver vehicles to the customer’s door marking the start of a five-day test drive (or 500 km). The delivery zone will extend from Peterborough in the east to Barrie in the north to Niagara in the southwest.
Inventory is all centralized at a facility in Brampton, Ont.
Delaware said Zoom.ca is the first product from an innovation lab previously set up by Performance.
The lab maintains an arm’s-length distance from the dealership group allowing it to “accelerate and innovate” without the usual hurdles of a larger organization.
That lean, startup methodology led to the development of Zoom.ca, a project Delaware said took over 100 people and several partners over 18 months of development to launch.
All that effort carried a price tag of $12.5 million.
Dan Allison, Zoom.ca co-founder, said that despite providing the financial backing and the vehicle inventory for the venture, Performance Auto Group maintains a “dotted line” connection to Zoom.
Though developed by the innovation lab, Zoom was not created in a vacuum. There are multiple examples of similar entities operating in the U.S. right now – Carvana, for one – that clearly informed some of the decisions around Zoom’s functionality.
And while Delaware explained it was helpful having some in-market examples from which to learn, he was quick to point out there were also internal best practices from Performance Auto Group to be gleaned for development.
“We also adopted a model that has worked very well for the used-car superstore – Autoplanet Direct – by making sure we offer a market value, one-price model with no negotiations,” he said, adding that there wouldn’t even be a salesperson to haggle with should a customer desire.
The pair wanted to keep their cards close to the chest in terms of the particulars on its online credit applications and finance agreements other than to note that was one of the “biggest puzzles to solve.”
They didn’t reveal volume targets, either.
The next step is a major push to spread the word about Zoom to consumers in the coming months. The “seven figure” marketing initiative would include some traditional exposure but largely focus on digital efforts given the nature of the company.
When asked if Zoom could be seen as the harbinger of the death of the traditional dealership model, Delaware was adamant that it wasn’t.
“We have had those discussions internally, but we believe there are people who absolutely love the dealership experience and there are people where it is not their favourite. With this project, we are trying to reach out to people who don’t enjoy the dealership experience and provide them with an alternate option,” he said, noting key markets going forward will be first-time buyers and those with poor opinions of the traditional model.
Proof positive of Performance Auto Group’s faith in bricks and mortar is the fact it acquired Don Valley Volkswagen and opened North Mississauga Acura while the Zoom project was in development.
And don’t expect to see the model move to new cars anytime soon.
“We’re completely focused on the pre-owned market and new car sales are not on our radar. There’s 2.8 million used cars sold in Canada per year. There’s 1.7 million new cars sold, so we really want to focus on the pre-owned market and make sure we are doing all of it right.”