Thursday, July 19, 2018
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Insert coin; pick a car -- a new way to car shop arrives in Tampa

BRANDON ó Itís the biggest, most expensive vending machine around.

By a lot.

Online used car dealership Carvana today unveils its eight-story, coin-operated machine that dispenses shiny vehicles to ground-level glass bays for buyers to pick them up.

In the age of Amazon, Carvana is one of many retailers trying to revamp the car-buying experience, which industry executives have likened to a root canal.

"The second-biggest purchase you ever do should be open, should be transparent and should be exciting," said Ryan Keeton, the companyís co-founder and chief brand officer, who was in Tampa.

RELATED COVERAGE: Online car seller Carvana launches in Tampa

The companyís new machine is located in the Estuary, a 150-acre development just off of Interstate 275, now home to other destination retailers and attractions, including Top Golf, Bass Pro Shops, Dave & Busterís and the indoor skydiving center iFly.

Upon arrival at the center, the customer is handed a large silver Carvana coin, about the size of your palm, which they drop into a small white tower in front of a glass wall. From there, the machine starts to move, and a live stream of the action appearing on a flat-screened TV behind the front desk.

Hereís how it works: Each of the 32 vehicles sit on blue platforms. When the machine is activated, the car and platform is pulled from the vertical lineup of 32 other vehicles (4 per floor) and centered on top of a flat top elevator that slowly lowers it to the ground floor, then shifts off of the elevator onto another mechanism that moves laterally to one of the three bays.

Using the live-stream video the company produces custom 30-60 second highlight reels showing the customerís vehicle pick up experience from coin drop to bay delivery, which can then be posted on social media.

"Itís a bit of a gimmick but itís also a bit genius," said Nick Gorton, vice president of product innovation for Edmunds.com.

The main draw of the website, Gorton said, is being an online company that handles all aspects of the car-buying experience, solving problems that have plagued one of the largest industries in the country as it steers into the digital age. Research has shown consumers especially dread negotiating with car salespeople, so Carvana did away with them, setting individual, non-negotiable (they call it "no-haggling") prices on each of its 11,400 listed online vehicles.

The company has restricted its inventory to vehicles that have no reported accidents or frame damage, and uses high-resolution, 360-degree photography to allow shoppers to see the carís current condition.

Whether the shopper is 17 or 70 years old, Keeton said that Carvana is built to be straightforward and user-friendly, but also to have fun with the experience.

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Cars can be delivered to the personís door, often the next day, or picked up at a vending machine. If they want to pick up the car but do not live near one of the machines, the company will pay $200 toward a one-way flight for the customer to get there, where a representative will pick them up from the airport and bring them to a machine to get the car.

In its quarterly letter to investors, the company describes how the machines have made great waves in their respective markets, which include Nashville, Atlanta, Houston and most recently, Jacksonville. And despite the roughly $4.5 million price tag of rolling out the vending machine, the company said it provides a lower variable cost than home delivery of its vehicles.

Carvana has been selling vehicles in the Tampa Bay metro region since mid-2016. Co-founder and chief brand officer Ryan Keeton said it has been a "great market."

He added that the vending machine security is just as high as those of a warehouse or car dealership.

So no, the company says, you canít shake it for a free one.

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