TESLA — online only business. Is it too radical?
“Last week, Tesla (NASDAQ: TSLA) announced its unexpected decision to abandon physical retailing locations and move to online-only sales.”
Weird decision?
Not entirely. There are definitely reasons to support Musk´s innovative approach as there are some that preclude us from cheering him on.
Before starting a discussion about Tesla´s decision to transition to online only sales, let´s do some introduction to why we as people and as a society are sometimes afraid of “opt-out” solutions.
Afraid of the “new”
People are used to doing things the same way they always been doing, and they do not know why. It goes back to our history. Our predecessors were highly apprehensive of what their society did. Just imagine crazy idea — you are one of the hunters and gatherers. You are in the forest, picking blueberries and listening to lovely birds singing. Suddenly, Jack, the head of your tribe, starts screaming, jumping and running. You don´t know what is going on, but not before long you find yourself running like Jack. You don´t know why you ran, but you did run for your life, just like Jack and simply because he did. For all you know there was danger, and thus, running may have saved your life.
What we would like to focus on in this story is that there are certainly some principles which we have in common as a society, principles which help us survive. However, this notion is not without the consequences. Nowadays we, fortunately, do not need to be afraid of dangerous animals out to get us. Instead we worry about innovations, about doing things differently. New technology is our danger, and we ask for at least some degree of certainty in our future.
The tricky part of that “safe” approach of sticking to old ways is that we are running the risk of missing out on some fantastic innovative opportunities. Let´s look at Apple’s decision to produce earpods without wires. Firstly, people were shocked because they were used to use earpods with wires. After some time they found it awesome to not be bothered by wires.
Innovations and extraordinary solutions may, at the first glance, seem weird. The only thing you need to do is to be open-minded. Only time will show the success or lack of for each given solution.
Back to Tesla´s decision
Step back a bit to see the possibilities instead of threats. Tesla said that elimination of physical points of sale will reduce operating expenses. Duh. It sure will. However industry experts are shocked.
One of the most important worries is that customers are not ready to buy cars online. After all , buying a car is not as simple as buying a dress or a toy.
According to Forbes, there are many reasons why customers may be worried: “The reasons vary by customer segment, but the explanations generally revolve around the ability to view and test drive a vehicle; review features and options in-person; the complexity of financing options and credit approval; the need for an in-stock vehicle; and finally, appraising a trade-in vehicle. In fact, more than 40% of new vehicles financed in the U.S. involved a trade; and while major advancements have been made in appraising trades remotely, in almost all scenarios, an in-person inspection is required to pay the highest amount to a vehicle owner.”
There are some solutions to solving this issue. Instead of closing stores, Tesla and other dealerships should simply connect their online shoppers to available sales people in stores. Video communication is the best tool for that as it is rising more and more often used in car industry and retail. Have you noticed the explosion of video commerce? Live video connection to a car dealership would offer a convenient way to exchange information and smiles; the connection that allows your customers to examine the product closely; the connection that does not keep a customer waiting for the answer they need.
If you want to make sure you are talking to a real person at the very store you’re shopping online, try OKTIUM — an instant live video connection for online shoppers. It is much easier to discuss financing options, make an appointment for test-driving and make the online shopping process personal and convenient.
Like what you read?
You can find more of our articles here!
Visit us at https://oktium.com/ or follow us on the following channels for more updates: @Face2OKTIUM on Twitter and @oktium on Instagram.
