Interview – Karen Hilton, Chief Commercial Officer heycar UK

“The role of the dealership has to change. In today’s busy world it’s not okay that you have to spend two and a half hours buying a car.”

Karen Hilton is Chief Commercial Officer at heycar UK, the online marketplace for used cars, which launched in the UK in August 2019 with backing from Volkswagen Financial Services and Daimler Mobility to deliver greater trust and transparency for car buyers, dealers and manufacturers.

Prior to joining Heycar, Hilton enjoyed a varied career working for manufacturers at the BMW and Volkswagen Groups before switching to Carwow in its start-up phase, as well as a stint as commercial director at property-tech start-up Nested. Here she discusses her motivations, the challenges and excitement of the past year, the differences between a manufacturer and a start-up and her thoughts on the future of a changing industry.

You’ve built the bulk of your career in the car industry. Was it always a passion?

“No, I’m actually a failed doctor, if you want the honest answer. I was the kid at school that was good at maths and science. And I was probably educated in that era where if you were good at maths and science, you were either going to be a doctor or a vet!

“I spent six weeks in Southampton General Hospital just before I picked my university and realised I might be smart enough, but I didn’t want to do it.

“And then I fell back on what I’d been doing up until then, which was working in the local Volkswagen dealership on a Saturday and Sunday, picking up the phone and talking to people.”

What was it about the car industry that fired your enthusiasm?

“When I was a kid my dad did a bit of racing, so I guess whilst all the other kids were having horse riding lessons or playing with dolls houses, I was rolling tyres around Thruxton. It was a slightly unconventional childhood!

“So I loved cars, but like many in this industry I still don’t quite know how I ended up here now – but I know I’ve not escaped because there’s something that just keeps drawing you back.

“One thing that does intrigue me though is that even now I draw on those 18 months early on that I spent working in that small dealership on the south coast. Ultimately, this business is just about people selling to people – and that was a great grounding for it.

“I was working in an era where the sales executives were mainly men in beige Hugo Boss suits, where the watch you wore was an indicator of success and so on. I worked out pretty quickly that I was good at selling to women and older people, just because I was a different face. It struck a chord, and taught me that you’re always selling yourself at some point in life. I just got into cars from there – and once you’re in it is hard to leave.”

You’ve enjoyed an incredible career path. Were you always ambitious?

“I’ve always been curious. I was always that person that was actually more excited about going into something that I knew nothing about. I get more of a thrill out of not knowing and actually filling in the gaps of my knowledge than playing it safe.

“So my career has been really broad. I’ve moved left and right, I’ve worked in big corporations, I’ve worked in fast moving start-ups. I even escaped automotive for six months when I worked in property, just as Brexit was going through. So, that was a terrible decision. But across my career, I’ve always been fortunate enough to work for employers whereby the next challenge has always been waiting.”

How do you plan a career with such a fast trajectory as yours?

“I’ve always had a really simple formula, which is to keep one foot on something you know, and put the other one on something scary. So you are never quite making that leap of faith, but equally never out of your depth.

“For me, the thing I’ve mostly kept steady is the automotive side, because the more you get to know about it the more useful you become. Then, moving between, for instance, product or sales or marketing or strategy, if you’ve got one foot grounded on something that you know, then suddenly the next move doesn’t feel quite so scary.”

Even then, the switch from, for instance, a dealership environment to working at BMW and Mini’s HQ must have been a culture shock?

“Sure. The small regional dealer group was incredibly entrepreneurial and I walked into what was, at the time, quite a top-down organisation. BMW was shaped like the sort of company you read about in university textbooks; the structure was rigid, the managing director really did sit on the highest floor in the building and so on. I’m sure it has changed a lot now.

“But crucial for me was that I joined Mini in the early days of its reinvention. For me, it was probably somewhere I could thrive more easily. Let’s say that I do like to push boundaries, and Mini was open to that! If I’d pushed as hard at BMW I might have been pushed out of the door myself!”

Do you really believe the bigger corporations have changed?

“Yes. The past decade has brought a far more powerful start-up mentality into the corporations. Add in covid, and the turbulence that is across the industry, and corporates have to become more flexible to survive, with less structure and more agility as they push to move a bit faster. So there is a convergence.

“I look back at my time at Mini and Volkswagen and I hold the brands very close to my heart. I didn’t leave because I stopped loving working for them, I left because there was a bit of an itch that I needed to scratch. And if I was all honest, I didn’t want to sit there and wake up in 45 years time and find that I’d only ever worked for one company.”

Even so, you must have got a few funny looks when you announced you were leaving Volkswagen for what at the time was quite a disruptive, controversial start-up called Carwow?

“I remember a few names being called out at me down the corridors! Some people did think I was mad, because I had quite a good career, with a strong track record and lots of opportunities ahead of me. Nice and safe, you might say.

“The attraction for me was they were doing something different in a market that needed a bit of stimulus and a little bit of change. And I think anyone that’s been in the large scale corporate knows the bigger a business gets the slower it is to turn.

“I was excited by joining a team of – at the time – 38 other people, with more ideas than you can manage and a bit of cash. There was a sense that if we could nail it anything was possible.”

Do you think a few cobwebs have been blown out of the industry in terms of moving to digital experiences now?

“The industry as a whole was slow to shift, and I’d suggest that the past year now means that the ground to shift has got even bigger. But we’ve had 10 years of acceleration in one and when I listen to people like [Vertu CEO] Robert Forrester and describe it not as a tough year, but rather a tough week followed by a battle plan that needed to be rolled out, it’s quite inspiring. The industry proved it can move fast.”

On the other side even start-ups have to grow up, too?

“Absolutely. Carwow is nearly ten years old now. When it arrived it was a genuine disruptor; dealerships were bricks and mortar and websites were just a company description.

“Heycar didn’t launch in the same space, and what I think the industry needs now is an innovation partner, not disruptor. It needs someone that can help solve problems that all dealerships are facing.

“Sure, from the perspective of having experienced both, it’s good fun to be the controversial one that kicks things off. You’re not always popular and things get a bit sparky every now and then. But it’s quite nicer still now to be in a space where the whole industry has shifted and actually we’re talking about evolving and innovating, rather than shaking everything up and putting it in the bin.”

How does Heycar stand out from the opposition?

“The honest answer is we’re still figuring it out. First and foremost, our customers are the dealerships that work with us and decide to list their stock with us. There are lots of other players, most of them with names beginning with a C, in the space now, stripping the dealer out of the process. We don’t see that as our role.

“We see our role as asking how we help the 4500 franchise dealers that are in the UK innovate and sell at scale, accommodating them whether they want to sell 80% of their cars online or 5%. One size isn’t going to fit all. Appetites will vary, but how can we help?”

Heycar works in a very defined space, though; cars for sale can only be up to eight years old, have less than 100,000 miles on the clock and so on. Why?

“Otherwise we’d just be a me-too brand doing the same thing that everybody else does. We launched into a space that was already competitive and cluttered. We had to be different.

“So we focus on how we help dealerships, which invest an awful lot of money in their staff, their training, their physical experience, stand out a bit more.

“Our role boils down to enabling dealers to sell in the means that customers want to buy, which means starting online. I do think delivery is interesting, and during the second and third lockdowns, rather than just not charging people, we funded delivery. It was popular, so perhaps the next challenge is to solve how you allow a customer to have the car delivered to their driveway and it still be a really good experience?”

Are bricks-and-mortar retail sites losing their appeal – and are you accelerating that?

“No, I don’t think so. I think the role of the dealership has to change. In today’s busy world it’s not okay that you have to spend two and a half hours buying a car. I actually viewed our house on a WhatsApp video my wife made prior to buying it – and that’s a materially bigger purchase than a car.

“Easing that journey is critical. When I hear some of the stories such as dealerships that serve crazily hot coffee because they know that the customer will then have to sit there until it is cool enough for them to drink it, I wince. I want to find the car I want online, sort my finance online and arrange the details online, and then enjoy the dealership experience for the pick-up. For many of us, it is a much simpler, more enjoyable way of doing things.”

Where do subscription models fit into your thinking?

“Sometimes I see the world through really simplistic eyes, but a subscription is just another way of funding a car, isn’t it?

“For years, we’ve all been hooked on PCPs. A subscription isn’t that different, but I think it is held back in part because of consumer denial, because it lays bare what owning a car really costs. So a lot of people are shocked by the all-in subscription fee, even if the reality of paying for their car, tax, fuel, insurance and so on is actually that amount.

“I’m not totally bought into the idea we all want to switch our cars every three months, either. I can imagine wanting to swap less than every three years, as we typically do now, but that model does need refining. But can it work? Of course. Really it’s just another funding method.

“As to the relevance for Heycar, I’m not sure at the moment because we aren’t a business that owns the assets. That could change, and we often analyse what’s happening in the new car world because that often drives what happens in the used car world. I do believe subscriptions could be an interesting option for used car ownership in time – but we also have to be ruthless over what business we go after.”

Are people happy to buy used cars without testing them?

“It largely depends on the age of the car, but it’s clear from the number of businesses operating now who do deliver used cars or offer online purchasing, with a buy-back guarantee, that it can work. That guarantee to take the car back seems to be crucial to earning the customer’s confidence.

“So I would say that I would have no hesitation buying a three-year old car with good provenance. An older car with a lot of miles on and a few previous owners I might want to take a look at, but even then a money-back might encourage me to look.”

Do you believe buying online can be as joyful as going into a dealership?

“I think it depends on your definition of joy. I recently became a parent, so we have a 10 week old baby. Joy for me right now is efficiency.

“We also have to remember that for a lot of people a car is just a tool, not an indulgence in the way it is for petrolheads. It’s a means of getting from A to B or ferrying the kids around.

“The really exciting bit is when you first get behind the wheel. That’s the nugget we want to capture for customers who choose to have a car delivered.”

What’s it like working for a fast-growing company in a pandemic?

“When we sat in the office on March 23 and talked about this thing that was coming from overseas, and that it was probably safer if everyone went home for a bit, we genuinely thought we were sending people home for two weeks.

“But we’ve also become a bit more of a family than a team. We’ve come to know each other’s lives inside out. We know who is struggling. We know who isn’t OK. And we’ve created an environment I hope where that’s fine – including by admitting to all the mistakes we have made in getting to that point.

“Now we’re at a point where we’ve got people coming back to the office. It’s ridiculous, but after a day spent with people, sticking Post-It notes on the wall and bouncing ideas face-to-face, I was buzzing.”

How much of what you’ve had to do will now become part of how you work?

“It’s fundamental that we don’t just go back to what we did. It’s critical, in fact, to how we will get the best out of everyone.

“And it’s also fundamental that we recognise the world around us has changed – and is changing. Diversity and inclusion was part of our agenda pre-covid, but now it is front and centre. We just realised that we weren’t acknowledging it enough.

“One of our biggest learnings as a leadership team has been that it’s not enough to say ‘we don’t tolerate this’. You have to create space to have a conversation, to educate yourselves on a subject and to actually be able to take a stance on it. A clumsy conversation is better than no conversation at all.”

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