Date: Wed, 22 Jan 1997 13:24:44 -0800
Sender: Vanagon Mailing List <vanagon@vanagon.com>
From: Ron Lussier <coyote@zuni.chaco.com>
Subject: Volkswagen Updating web site
>From http://www.webweek.com/current/markcomm/volkswagen.html
Volkswagen Walks a Fine Line as it Prepares Commerce Site
By Bill Roberts
Volkswagen of America will upgrade its Web site by the end of this month,
allowing VW enthusiasts to shop, order, and make credit card payments for
everything from baseball caps to distributor caps.
Since October, customers have been able to shop--but not pay for--branded
caps, jackets, and other stuff at the VW Store. When the payment-enabled
site launches, they'll also be able to buy luggage racks, wheel covers, and
other accessories. By year's end they'll be able to locate, order, and pay
for automotive parts as well.
VW is one of dozens of manufacturers using Web technologies to help phase
out expensive legacy systems. Its initiative also shows how manufacturers
must juggle a new sales and marketing channel--the Internet--with existing
channels, such as dealerships in the case of the auto industry.
It's a delicate balancing act. "Right now you can't tell exactly how it's
going to break," said Bill Bluestein, an analyst at Forrester Research.
"Will the Internet cannibalize other channels or open up new business? It
probably will depend on the product." VW is making every effort to use the
Web without cannibalizing the dealer channel.
"The biggest hurdle is assuring dealers that we won't cut them out of the
chain," said Jack Shafer, manager of new technology at Auburn Hills,
Mich.-based Volkswagen of America. "They're way ahead of us in their fear
that manufacturers will try to cut them out. We're not interested in
eliminating the dealer." He said that most states bar manufacturers from
delivering cars directly to customers, reserving that right for dealers.
"Dealers also perform a lot of service for the customer, including the
warranty work," he said.
Reassurances for Dealers VW has taken several steps to reassure its 900 VW
and 230 Audi dealerships in the U.S. and Canada. When a customer orders
from the Web site, fulfillment will be handled by a local dealer, who will
be credited with the sale.
An unresolved issue is pricing of items. Dealers are allowed to mark up
prices to whatever the local market will bear, but the Web site offers a
standard price list.
VW has just begun to offer dealers a one-page home page with its own domain
address and links from the VW site at no cost, or a six-page site for $65 a
month. Shafer said more than 150 dealers had taken advantage of the program
even before the company's recent launch of an aggressive recruitment effort.
Shafer also said VW's field force, as well as area executives who work with
dealers every day, support the company's online efforts and have been doing
a lot of hand-holding.
Guildford Motors, a VW and Audi dealership outside Vancouver, B.C., was not
concerned about losing sales. "If people are interested in the
product--which isn't cheap anymore--they certainly want to touch, taste,
and feel it before they spend," said Peter Schluter, leasing manager and
Webmaster. "With the Web, they can do their homework. By the time they come
in, they're not customers anymore, they're prospects." The goal for the
parts catalog, which is about to enter a prototype phase, is to enable
customers and dealers to locate the part they need, find out which
dealership has it, order the item, and pay for it.
"VW has a higher proportion of do-it-yourselfers," explained Shafer, adding
that parts is a $400-million-a-year business for Volkswagen of America.
"The customer area of the parts catalog will probably be a subset of the
Web-based dealer catalog." The Web is part of VW's plan to phase out legacy
systems by 1998, including a mainframe and a proprietary communications
network for dealers. "Everything will become Net-centric, Web-enabled,"
said Shafer.
Forrester's Bluestein said that companies that create cross-departmental
teams from sales, marketing, IT, and business development to manage Web
commerce will fare better on the Internet.
Shafer agreed, noting that "development of our site was done with the
coordination of IT, marketing, and a group from the advertising agencies."
VW started a Web site in August 1995, and an Audi site was launched a year
ago. The VW site gets more than 12,000 visitors a day and Audi about 4,000.
Shafer said the company can trace at least 300 car sales to contacts made
on the Web site, ranking the Net behind only television for generating
sales leads. The site's hardware and commerce capabilities are being
upgraded this month.
The site runs on Netscape Suite Spot with an Oracle database. Hardware
includes two Sun SPARC servers, two Digital Equipment Alpha servers, and
three Intel servers. When the parts application is launched, information
will be delivered in Adobe Portable Document Format. The payment system is
from CyberCash and will comply with the Secure Electronic Transactions
standard.
The car company wants to avoid competing with its dealers.
--
Ron 'Coyote' Lussier /\_/\ ____ Chaco Communications
(408) 865-0657 ( ) \ _/__ 10164 Parkwood Drive #8
coyote@chaco.com \ / \X / Cupertino, CA 95014-1533
(1990 VW Westfalia Camper) \_/ \/ http://www.chaco.com/~coyote