With the pandemic starting to appear in the rearview mirror, Harley-Davidson is taking a bold step toward meeting customers where they are by selling nearly 18,000 used motorcycles directly to consumers in a bid to greatly expand its digital capabilities.
The H-D1 Marketplace, launched earlier this week, allows consumers to sell and purchase pre-owned Harley-Davidson motorcycles directly through the company’s website. Additionally, President and CEO Jochen Zeitz said all Harley-Davidson dealers with certified pre-owned motorcycles, meaning they’ve passed a 110-point inspection, have signed up to participate.
“We believe the H-D1 Marketplace will drive connectivity and engagement with our Harley-Davidson customers and dealers, acknowledging the important part that riders of pre-owned Harley-Davidsons play in our community,” Zeitz said. He added that this is also the first step in enhancing the company’s omnichannel capabilities “on a global scale as we look to innovate online to lead the industry.”
In the second quarter, Harley-Davidson said it sold over 48,000 new motorcycles in North America, where the H-D1 Marketplace will first be available.
Harley-Davidson is hardly the first vehicle manufacturer to sell its products directly to consumers — Tesla, of course, has been doing so for years on the premise that its cars are too complicated and different from traditional combustion engine cars for independently-owned dealerships to properly explain to customers.
But it remains to be seen how popular buying a used motorcycle online will be and whether the official backing of the Harley-Davidson brand can sway consumers who may be wary about getting their bike on the internet.
Still, Zeitz, who took over as CEO in March 2020 after 18 years at Puma, said Harley-Davidson had to do something to get its hands around the used bike market.
“It’s always been a significant business for our dealers, but the motor company never really had a good understanding on the used bike market,” he told analysts and investors on a conference call. “It’s a significant market. Those are all very valued Harley customers, and it was important for us to get our hands around that market.”
The goal, Zeitz said, is to make Harley-Davidson’s website the go-to site for anything from the brand, including general merchandise, parts and accessories.
“This is the first step in a digital push from Harley that is absolutely necessary,” he said.
Driving Toward Digital
A rise in eCommerce overall since early 2020 — 92 percent of consumers have placed an online order for a product or service recently — combined with higher vehicle prices overall because of new car production issues has driven consumers toward a “hybrid” approach of buying a vehicle where they browse online and then show up to a lot before making the purchase on a mobile device.
Vroom CEO Paul Hennessy said in an interview for PYMNTS’ Connected Economy research that this is forcing used car sellers to invest in a connected buying experience for consumers. The used car retailer has seen an 82 percent year-over-year increase in eCommerce sales, which translates to an 89 percent increase in gross profits.
“It starts with a customer-centric philosophy built on top of an eCommerce platform,” Hennessy said.
Additionally, eCommerce sales allow for better long-term relationships than those at brick-and-mortar dealerships. For example, Vroom is able to use data to alert customers when it might be a good time to sell their car, to provide monthly vehicle valuations or to offer additional services.
Mark Luber, chief product officer at Equifax, said in an interview with Karen Webster that as the vehicle industry moves online, it has to be careful about increasingly creative fraudsters who want to take advantage of nascent digital capabilities. PYMNTS research shows that 55 percent of auto dealers plan to invest in identity verification and authentication improvements.
“There’s a whole loan experience to develop online,” Luber said. “But we’re putting fraud checks in as part of that experience.”