AUSTRALIA’S second-largest dealer group AP Eagers has taken a further step this week in what management has long believed will transform used-car retailing in this country.

The apparently quirky concept of selling used cars from shopping centre stores with plush Apple-store-like fitouts and no physical cars in sight was launched this week at Westfield Garden City in Brisbane’s south.

The Garden City store is being used as a proof-of-concept in the shopping centre environment prior to the opening of a full flagship store at Westfield North Lakes in Brisbane’s north this November.

 

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Visit the CARZOOS website – Click here

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Operated under AP Eagers’ used-car brand Carzoos, the concept has long been the brainchild of AP Eagers managing director and CEO Martin Ward, with many of the business systems and customer offers developed and tested across much of the Eagers network of dealers in Queensland, the Northern Territory and Newcastle (Klosters) over the past few years.

Carzoos has been the brand used by Eagers for its used-car operations in Brisbane since 2011 and the Garden City store is the latest piece to be added to the puzzle.

 

 

Eagers has high hopes for the shopping centre used-car sales model because the used- car market is much larger than new car volumes, used cars are free of the restrictions that come with new car franchise rules and used cars cover all the makes and models on sale in Australia from the highest prices to the lowest.

The shopping centres are effectively marketing platforms designed to expose millions of potential used-car buyers to Carzoos and, equally, to position the brand top-of-mind when it comes time for people to move into the second-hand market.

The company said that Westfield Carindale, near Brisbane, for example, has 16.2 million visitors a year.

HOW IT WORKS

The store attracts interest from potential buyers by using a high quality fit out, not dissimilar to the high standard storefronts of Apple, and even position staff at the doorways who explain what Carzoos is all about.

They introduce potential buyers to so-called ‘buddies’ who will handle the sales process. The store is equipped with iPads that are linked to the Carzoos used-car stock list.

The key to Carzoos is the way that it is linked into the used-car operations of the Eagers dealer network via tablets operated from the store. The buddies take the customer through the stock list looking for suitable cars for the customer.

Prices are initially based the Eagers’ dealer’s asking price as listed on their sites.

But, by pushing a button on the tablet, the buddy can call up a much lower no-haggle price.

The buddy cannot negotiate. This avoids tension and a transaction that could take hours of tooing-and-froing and increasing aggravation in the traditional dealership can be completed in minutes.

At this point, Carzoos wraps a mountain of peace-of-mind offers around buying the car which has, at his stage, only been seen on a screen.

The key is that buyers can return their cars for their money back up to seven days, and 500 kilometres, after the purchase, which is effectively a seven-day test drive. Carzoos retains any traded car for the seven days so that customers can get back into their old car if they do not want to proceed.

In addition, Carzoos has conducted a 120-point check, offers a one-year/175,000 km warranty, a year of free comprehensive insurance (even for 18-year olds with a poor record), roadside assistance and fixed-price servicing.

AP Eagers general manager Keith Thornton told GoAutoNews Premium that in trials of a two-day money-back guarantee, less than one per cent of customers returned cars and, of those, more than half happily transferred into other cars.

Buyers are also offered finance through the AP Eagers-owned Simplr finance brand. But it is seen as a completely separate transaction and is handled by “Simplr sidekicks”. The sidekicks can also sign up finance to customers who are buying cars but not through Carzoos.

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The disposal of the old car is regarded as totally divorced from the purchase of a newer used car. Here Carzoos claims that it will buy the car for a “guaranteed best in market” price.

Buddies have been trained to use the iPad system to appraise the customer’s car (from a location in the car park) with extensive use of photographs to highlight condition. The owner needs to make signed assurances that the car is mechanically sound and the deal is off if the car is subsequently found to be wanting.

At this point, the buddy sends the details to all AP Eagers dealerships, who bid for the car. The highest bid is the price paid to the customer. This tends to draw out the best price because it covers more than 100 dealerships across a host of Eagers franchise portfolio.

Mr Thornton contrasted the Carzoos business model with that of new-car franchises, who are experimenting with shopping centre car displays. He said there were considerable savings renting 95 to 120 square metres of shopping centre space which could be kept compact because no car needed to be displayed.

He added that a shopping centre was also very cost effective when compared with 4000 square metres of frontage on a major highway used to stock used cars.

By John Mellor