The Queen’s Cars, Wholesale Slips, Brand vs Merch

September 9, 2022
We have that ‘Friday feeling’ as we’re prepping to roll onto ASOTU CON. But first, we’re talking about the Queen’s epic taste in cars, the wholesale price index in August seeing some sinking numbers, as well as a bold move by retailer Lowes in its reorganizing marketing and merchandising.
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Queen Elizabeth II, the longest-reigning British Monarch passed away at age 96 years old surrounded by her family yesterday and will be remembered by millions across the globe for many things. One of them is a great, and quite tasteful car collection

  • Ruled for over 70 years beginning when her father died suddenly in 1952 while she was on a trip in Kenya and was flown home. She didn’t realize that she was to immediately become queen. Her coronation was the first international live TV broadcast
  • To the cars:
  • Queen’s first preference always steered toward British off-roaders throughout and even before her reign. Perhaps the first was an Austin K2/Y, which she would have used during her World War I
  • She loved Land Rover Defenders.  Her favorite being a 2002 Defender 110 TD5
  • When the current-gen Defender rolled out, Land Rover gifted a Defender 130 to the British Red Cross for her 75th anniversary as queen in her honor to commemorate her long-standing relationship with the vehicles
  • Her fleet included several Bentleys, including Bentaygas and Arnage-based state limousines, including her golden jubilee steed from 2002
  • Others included Rolls-Royce Phantom-based limousines, Rovers, Vauxhalls, and Aston Martins
  • By law, she was the only driver in England who didn’t need a license
  • Elizabeth's eldest son, Charles, 73, formerly the Prince of Wales, has immediately become the King of England

Wholesale Used Car prices dropped 4% in August, the sharpest decline this year according to Cox Automotive data which is adjusted for mix, mileage and seasonality.

  • They are still 8.4% higher than they were in August of last year
  • According to Black Book, pricing has consistently depreciated for the last 6 weeks

Lowe’s fires its CMO and moves marketing under merchandising head Bill Boltz, executive vice president of merchandising

  • Following 2 quarters of decline from YoY comps, CMO Marisa Thalberg, chief brand and marketing officer at Lowe’s, has left the home improvement retailer as part of a corporate reorganization
  • Under Ms. Thalberg, Lowe’s moved into several high-profile campaigns, including running commercials on ESPN during the NFL Draft broadcast. She was also key to new marketing initiatives at Lowe’s, such as Halloween trick-or-treating, and Valentine’s Day date night and Petco shops inside the chain’s stores.
  • Richard Sanderson, a consultant at Spencer Stuart, said the practice was more common in grocery more than a decade ago when “marketing was really driving weekly promotions and print circulars.”

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Bob Lanham, Kyle Mountsier, Paul Daly

Paul Daly  00:20

Friday, feeling waking up full of excitement as Soto Khan is just hours away. We can count it in hours at this point. But we have some news, like the Queen's car collection that we just have to talk about this morning. The people really want it. They stopped this day with a good one.

Kyle Mountsier  00:39

Queen's card collection. I feel like that's a punk rock band from the 90s

Paul Daly  00:43

Queens car collection. Oh my gosh, yes. Somebody needs to jump on that quick. The Queen's cars, the Queen's cars. It's probably the kind of cars Yeah. Well, it is a beautiful Friday morning. Welcome. We know we have a number of new people joining the ecosystem. Excited we got we got some cool shout outs and love we heard in an automotive news webinar yesterday from the guests said she said she was like, Yeah, I just really been listened to this podcast a lot lately. It's it's called the automotive troublemaker. It's just guys calling Kyle. I don't know their last names. She's like, but I've been really on that lately, as so good. So it's a basic, so I don't know, I'm sure we won't see her at a soda con, I think she's an executive with Cox, automotive or something. But something that's fun, it's fun to know, that other people are joining this community on the regular that we don't know about, like that's about community is in the beginning, it starts and you know, everybody in it, right? Because little small group, only a few people, then it gets bigger and kind of like, you know, everyone who knows everyone and it gets bigger. And at some point, it gets to the point where people are like, they feel like they're a part of the community. Like they have some level of relationship, you know, we have the honor, I would say and privilege of being kind of the face of a soda for now. And being able to make the content. So people start to feel like they know you and and you know, because they can understand how you think and you feel. And so it's really fun to watch the community grow. It's fun to watch our

Kyle Mountsier  02:05

team and our team gets I love art and then on the content. They're like in on the content. Plus, they're like we had a couple conversations, our team meeting yesterday was like, Oh, I reached out to so and so that knew what we're doing. And we connected and we're able to, you know, connect the dots on some content. And so it's really neat to kind of see that, that spiderweb of impact start to really take place further than what you can actually reach and touch.

Paul Daly  02:30

Yeah, for sure. And if you want to meet some of our team, you're going to be at a soda con which by the way, I don't know if you've heard it's going to be starting on Sunday evening. If you want to go on you're in the area, you can still get tickets if you're a dealer, go to a soda And here's the deal. If you're at asoto, right, you just be involved in everything because it's going to be amazing. That's why we provided all the meals and all the things we got all as much organization and scheduling to keep you informed when you get there, you're gonna get this beautiful little booklet we made up. But if you can't be there, if you can't join us this time, there'll be another time for you to join us. But this time if you can't follow along on our social media channels, primarily hop on LinkedIn follow us so to on LinkedIn also on Instagram, automotive State of the Union and we have a link dedicated LinkedIn account for a silkscreen con and I'm sorry what did I say LinkedIn accounts I'm sorry

Kyle Mountsier  03:20

Instagram account for a sudo con you can just search it it's a so to con as OTU c o n so yeah, follow along there because that's where all the stories that's where all the line things that are happening the lives a little behind little BTS action with our social media crew so we got a whole running gun crew that's that's ready to

Paul Daly  03:39

roll small army small army flying in literally from all over the country to just like descend havoc on content creation. Throughout that entire

Kyle Mountsier  03:49

masterclass. It's gonna be it really like, I'm gonna be on Instagram, like, Oh, that was cool. That was great.

Paul Daly  03:55

I don't know if I'm gonna have time to pick up my phone like you and I are gonna like high five once throughout the day, because there's so many stages going on. Do you see this? Did you see that? Do you see this? But it is Friday, which means we have are all things used car clubhouse room coming up. At nine o'clock this morning topic is building a healthy relationship with the bender dealer partners. It's a launchpad for a soda con kind of is it's kind of the premise the collaborative mindset behind it. And we are also doing all things use cars live at a soda con to show special episode of that. Yes, so Okay, we got to talk about some news because we gotta get the clubhouse because we got to start packing the cars because you gotta go hang out. Brooke is already She's packing tonight. I'll get that coordination, right. We know you have to pick Brooke, if you don't know has a wall and sneakers, a wall of sneakers. So that's probably going to take three hours in and of itself, like which ones do I free? Right? That's just the question. So the crew is gonna be rolling with some fresh kicks. Everyone's got their little kicks packed out. We've been sharing pictures on our Slack channel. So either way, we're gonna have A lot of fun just serving the community and kind of approaching this with a hospitality mindset speaking of hospitality mindset when I think hospitality, I think the Queen of England

Kyle Mountsier  05:15

without a doubt, right, the queen of she, like the the essence of poise, and care, and dignity, with with joy, like, I don't think I've ever seen a picture of Queen Elizabeth. I don't think I ever saw one where it's like, she's not smiling. Right? Like every single one is she's just, she has this essence of Joyce sheet. And, and to be and, you know, if at some, for some reason, at this point, you don't know what happened yesterday, the Queen of England Queen Elizabeth the Second passed away after over 70 years, 70 years of being the Queen of England, like that's, that's mind boggling to start. That's just mind boggling to me at age 96. Still running, still still going, you know, just one of like, internationally known recognized for her care and compassion for that for that country and for others around the world.

Paul Daly  06:19

So without a doubt, without a doubt. And so we want to just take a moment and remember her. We also want to talk about her amazing taste in cars and cars remember her and in a way that only auto people really Polly auto can. So she was over 70 years when her father died in 1952. Basically, she was in Kenya on a trip and got the call that was sudden was on her way back. And she was like asking the people like the I don't know what they call them, like the assistants on the plane, like, Well, what happens now? And it's like she didn't realize like, you are actually immediately the Queen of England. Like right now. Do you imagine that? Oh my gosh, it's Unbeliev she's in her early 20s I believe her coronation was actually the first international live TV broadcast. So just think of the media. Like now everything's live and game from media to

Kyle Mountsier  07:06

it's unbelievable. Yeah, so Okay, let's get to the

Paul Daly  07:09

cars. Her first preference was always British offroaders which is super cool to know. Right? So they say perhaps the first was the Austen Kaitou Why would she would have used during World War One to kind of move around and rally troops. She loved Land Rover defenders make sense? Her favorite was a 2002 Defender 110 285

Kyle Mountsier  07:30

Yeah, that photo up again.

Paul Daly  07:32

We've actually got a photo of that one. That upper right hand corner is that oh, some beautiful trust just a gorgeous cool truck. Look at that thing. And she has like a special relationship with Land Rover over the years. They actually gifted 130 defenders to the British Red Cross for her 75th anniversary as queen. In honor to commemorate she was at like their new factory when it open. Her fleet also included several Bentley's our knowledge base state limousines including her golden jubilee steed from 2002 That's just like, so elegant class elegance and class. Of course, of course Rolls Royce had a spot in her heart in the lineup as well. Her Rolls Royce, her limousines were really phantom based off the Rolls Royce Phantom. She had Rover's vo halls, Aston Martin's, you know, but here's, here's a fun fact by law is great. The queen is the only person in England allowed to drive without a license.

Kyle Mountsier  08:31

However, she rarely drove, but she did not have a license, which blows which is just it's quintessentially England diplomat, right. It's like, There's no rhyme or reason why you're here other than you're in the family, that you don't really have any legal bearing. But because you're here, you also don't need to have a license to drive.

Paul Daly  08:50

I kind of have this thought of like, I wonder if she was like, she ever really did drive much. You know, I just kind of imagined like, you know, a fleet of like, Royal escort vehicles around. You know what I mean? Just like kind of somebody else in the car, like making

Kyle Mountsier  09:04

sure like, I found a couple pictures of her in the driver to it. Yeah. Do you know that? You know, I think that she definitely did. It was

Paul Daly  09:11

a tough gal, a tough and tender gal. She'll be remembered very dearly across the globe. And I don't know when the services are held. Going to be held. I'm

Kyle Mountsier  09:20

sure it's going. Yeah, so Friday afternoon, this afternoon. There'll be an address from Charles and then tomorrow. There'll be services and then the coronation of Charles later in the afternoon. So they're getting look, they get right after that thing, though. Yeah,

Paul Daly  09:35

that's the King of England. So Prince Charles, her oldest son, who is 73 now is now the king of England. There you go. Are we supposed to say long live the king here?

Kyle Mountsier  09:46

I think that's the way it goes. Well,

Paul Daly  09:48

maybe I'm not going to say there.

Kyle Mountsier  09:49


Paul Daly  09:50

Yeah. Well, I'd love to get Cirilo on the show and he can let us know what the with the with the proper etiquette is for addressing things like these. I don't have a say Way for this next one. So why don't you just tell us what's going on Kyle?

Kyle Mountsier  10:02

Well, hey, look for the first, for the sharpest decline of the year, it looks like wholesale used car prices have dropped 4% in August. And so obviously, Cox automotive data looking at a bunch of different data points, I'm excited because we'll have Charlie Chesbro. So to kind of guests will, this will be a part of his presentation because recognizing what used car prices are doing at a hole in the wholesale market really relates to the retail market and the accessibility of vehicles. Interestingly enough, US vehicle prices are still 8.4% higher than they were in August of last year. And black book, pricing has actually consistently depreciated for six weeks now. So we're seeing a downturn in the used car market. Be aware of that when you're at the auctions purchasing with, with customers and and then pricing from a retail perspective, because you probably there's always and if you're a great use car operator, you know that there's always a gap between the wholesale downturn and retail downturn. So you still got an opportunity to to find margin in in use cars. But watch as retail starts to start to follow wholesale over the next six weeks.

Paul Daly  11:14

You know, I'm reminding as I see this, right, like people say, Oh, is it gonna start to drop more steeply? Is there going to be a cliff? I'm just remembering all the conversations we've had over the over the last six months with people, well, two years, but like with people like Dale Pollack, who just understand macro trends, understand how things are effective, are affected and how they affect one another. And I remember just everybody's saying like, hey, prices are eventually going to drop, but it's not going to be a cliff. Right? Like, we're going to have time to adjust in line. But like Kyle just said, right, there's time, but not all the time in the world. Right. So now's the time to get your pricing right. And get your merchandising, right. Speaking of merchandising. So Lowe's, the home improvement company, recently fired its chief marketing officer, our brand and marketing officer as it moves marketing, underneath merchandising to note I think he resigned he they they didn't I don't think she or she.

Kyle Mountsier  12:16

I leave. I could be wrong. I just don't want to move on. She moved on. Yeah, well, okay. Hold on. What is lefty? Yes, as a part of corporate reorganization, so I don't know what that exactly means? Fired. Sounds like fired, but we'll see. So there'll

Paul Daly  12:32

be two hours there break reorganization, I had other priorities in life. Put it that way. Lowe's decided wanted to do something else with its life and they parted ways. Thanks for that clarification. We'll see what actually happened. I don't think it's controversial at all. So now marketing is under the merchandising head Bill bolts who is EVP of merchandising so following two quarters of declined from year over year comps, a CMO, Marissa Talbert, Chief brand and marketing officer at Lowe's left the home improvement retailer as part of a corporate reorganization under Miss Thalberg Lowe's had moved into several high profile campaigns. So she came in and she said, Let's build this brand. Right so now you're seeing Lowe's campaigns during the NFL Draft. You know big Halloween pushes Valentine's Day. She's the one responsible for getting Petco inside Lowe's. So she kind of like broaden the offering right people that come in, I see pets all the time and Lowe's, right?

Kyle Mountsier  13:27

Without a doubt. And that's why I can't leave floors make it really easy for them to price the dog, please. Everyone's like, Yeah, whatever,

Paul Daly  13:33

whatever. So the big it's actually a pretty controversial move. And we'll have some commentary, because it really does relate to auto which is why we talk about some of this. I went through the comments and just kind of pulled out a few that I thought were relevant. Jeff White, our principal at SSR retail said moving marketing under merchandising is dangerous is a dangerous step by Lowe's. The most likely outcome will be a promotion driven business and a slow decline in brand value. One more comment then we'll get to our commentary. Dave Bruno, Director of retail market insights said I've long wished for a better alignment between marketing and merchandising, and I admire Lowe's willingness to take this bold, risky step. However, I always envisioned it the other way. Merchandising, under marketing, what do we think about that? Kyle? I agree there's a lot of money and Dave,

Kyle Mountsier  14:20

here's here's what happens is, is I agree that let's start with this. The agreement is that merchandising and marketing should be extremely tight cannot be separated. They cannot be separated. And actually, we're seeing in automotive, a lot of marketing directors Director of Digital, actually they are the ones that are in charge of merchandising, actually, we we had a podcast with Nathan Hollenbeck of DG DG he includes all of the photographer's on his team and his marketing team on his marketing the vehicles and his marketing team is also responsible, responsible For reporting on traffic in order to in order to align pricing with used car managers. So when you think about that that's really a marketing, caring for merchandising, what happens is, if you go merchandising, in charge of marketing, all of a sudden you become very transactional. And you are driven toward, like a very specific offer or product instead of the overall brand. So think about this, actually. And this is, I think, I think this was mentioned by Richard there, I think you read this, but, but when grocery stores really started to drive all of their marketing based on merchandising, you saw all of the like, the placement of products in the store, driving the marketing, which was essentially print offers and papers and online and emails. And it was completely like all grocery stores were driven by what's in stock and what needs to sell. And companies like Publix moved away from that and started brand marketing, and really saw an increase out of that. And so I'm really intrigued as to whether, honestly, if Lowe's can keep up with Home Depot at this point, because I'm if I'm Home Depot, I'm licking my chops for market share,

Paul Daly  16:16

right? Let's buy that Superbowl commercial now actually saw an article saying they're already getting close to sold out a Superbowl commercial inventory. I know but it makes sense. Right? So the brand marketing side, the brand marketing side, has your competitor has an opportunity, because maybe here's here's what happens. Right? You go product focused. And you know, one of the other comments mentioned like this is how grocery stores typically would operate in like decades past. Right? It's all about the weekly circular. Right? What products are trying to move quickly. And that is the lifeblood of your entire revenue stream is how quickly and effectively can merchandise and get specials out and turn inventory on like a week by week or month by month basis. Sound familiar automotive? And so but what happens over time is that there's no real substance to the brand. It's just you're just dependent on the minute

Kyle Mountsier  17:08

that makes merchandising I don't know if this sounds familiar. But so the minute that inventory or pricing changes, things get much more difficult.

Paul Daly  17:20

You go in that tool chest, like what can we do to improve? There's nothing in there. Right? We shot our one gun already. So we'll see what happens. I mean, I think likely Lowe's will experience a bump, right? And they'll see year over year stability or growth maybe even but you know, just we say long term, but I mean long term being like 24 months, right? 24 months. So I mean, I mean, I'm sure there are a couple of smart people Lowe's, and it's easy for us to sit here and say that but the principles we just watched it play out in automotive, that the companies who had been investing in brand plays when the pandemic hit, disproportionately gained market share throughout the pandemic. Now, it's a little bit tough right now. Because probably like, if you have cars for sale, you're really profitable. So you think you're doing everything great, right? And it's fine, right? Everybody's making money everyone's doing executing well right now. But as the inventory regulates, we're really going to see the outflow of the the marketing the brand marketing decisions that had been made 36 months ahead, people that were already playing the game, right. And now, you know, I can say on the congruent side, so I have an agency congruent, and we're clients are coming and saying, like, you know, what, we haven't been spending a lot, but it's, we realize it's time we need to kind of like, start that again. You know, the best time to plan, you know, when's the best time to plant a full sized tree right. 20 years ago, next best time today. And so you too, can plant a big tree today. And hopefully, your business will sit under the shade of your savvy brand marketing campaigns for years to come. But we'll see what happens with Lowe's. Yeah, absolutely. Well, hey, phone call make speaking

Kyle Mountsier  18:55

of savvy brandmark segue. We thought today would be a prime time and I'm hoping Paul is dialing it up prime time to make a very key phone call from something that we found out about a couple of days ago that got announced this morning on LinkedIn. So let's see if we can get a good friend of so do and have the pod on the line here.

Paul Daly  19:21

Let's let's number phone call Friday's phone call Friday. It's good. Friday, baby. Let's go right. There has been zero communication with us and our good friend Bob LAN, and we didn't even say your name. But But Mr. Bob Lanham has an announcement to make. Well, he made it on LinkedIn. But you know, everyone listens to this podcast before they check like wow, what's going on in your world?

Bob Lanham  19:47

First of all, I can't wait to talk to everybody about it starting this Sunday at asotucon. Yep. So more details on it there. How about that but yeah, man, I'm fired up extremely. excited I've made the move from Mehta to car now working with the great Tim Cox and Andy park over there. So, guys, I couldn't be any more fired up.

Kyle Mountsier  20:12

That's awesome. I'll see you there what I'm most fired up because this is the easiest nickname change I've ever had to give someone in my whole life. You've gone from metta Bob to Bob Now it's just that easy

Bob Lanham  20:30

can we copyright that a call

Paul Daly  20:32

with Paul key already on the you

Kyle Mountsier  20:35

can go there and find your face all over it.

Paul Daly  20:40

Guys just like your head that just goes back and

Bob Lanham  20:41

forth. Hey, listen, guys, guys. In all seriousness, man, I truly appreciated both of you. The past few years when we first connected and the 1000s of text messages and the podcasts and everything in between man it's it's been a pleasure. And the best part is we get to continue this so really looking forward to doing that.

Paul Daly  21:01

So are we we just we were just someone's aren't very dropping comments in the LinkedIn comment feed Bob Now it's over. It's over. It's over. But Bob, we feel the same way. We're super excited that you kind of get to embark on this next chapter of your innovation and impact on retail automotive. We're just getting started man look forward to seeing you in just a couple days.

Bob Lanham  21:23

You guys have no idea like, I can't wait I've talked to so many people already about Alright, where are we meet and we're going to be at Subaru dealership we're gonna meet at the hotel after Yeah, sometime in the morning. Are we going to meet XFINITY live and it's like I just can't

Paul Daly  21:38

wait to get there like let's just get what are you getting? What are you getting in town?

Bob Lanham  21:42

I get in Sunday evening I think at like six something so I was gonna jet right over to the Subaru dealership with bagging all and perfect then figure it out from there and we'll be

Paul Daly  21:54

ready for you. It's a really short drive from the airport to the superstore so

Bob Lanham  21:58

easy in this this is in New York City, right? Yeah.

Paul Daly  22:03

You know where it's at?

Bob Lanham  22:05

You know where it's Hey, Listen, guys, I have flown you know, my time at met a man I've been at pretty much every airport and I have flown to the wrong airport before and land. Now I feel like I booked the ride but you just calling Hey guys, I am not going to make it man. There's no flight to where I need to go. I triple checking like Philly Philly, Philly, Philly. Perfect.

Paul Daly  22:30

There's only one well good. We'll see you in Philly in like 48 hours from now. Congratulations. And we'll celebrate person just a short while.

Bob Lanham  22:39

appreciate y'all and see you at all things used car.

Paul Daly  22:42

Let's go. Well, I think that's all the time we have from now. That's a great end of the story. We're jumping into clubhouse right now. But we got the newly coined Bob now on your side and retail automotive. There's so many good things to come this week. Make sure you follow us and stay tuned for a solo con

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