The shift to e-commerce has gained significant momentum during the lockdown, as dealers rushed to get online sale capabilities set up to be able to sell stock and keep money coming into their businesses. Now, with showrooms open under social distancing protocols, the online aspect of the car dealership remains important as many customers are not comfortable with visiting a dealership, and many have increased confidences in buying online.
An exclusive Motor Trader poll revealed that 58.3% of dealers are confident or greatly confident in their ability to fully embrace online retailing for used cars. The poll was commissioned as part of the MotoNovo Finance Getting Back to Business Webinar.
Most dealers are upbeat, but some are struggling, with 16.7% not confident about online used car retailing. Dealers were also asked about cost savings they could make following the lockdown, and almost a third, 28%, said they hoped to achieve faster stock turn on their used cars while 17.4% said they aimed to cut costs on utilities. A total of 15.2% said they could achieve cost savings on online marketing and 10.9% on pay per click marketing.
Ian Plummer, commercial director at Auto Trader, also commented on the importance of an online presence for dealers now that the attitudes of consumers are changing. He said: “It’s more important now than ever before that retailers accelerate their digital presence and adopt an omnichannel retailing approach.
“Although consumers can now visit most retailers, 15% of consumers we surveyed are still wary about doing so and as many as 80% are open to completing the purchase online or over the phone and only visiting the retailer to pick up their car.”
Auto Trader itself has made moves to help dealers improve their online personas by launching its Auto Trader Highly Rated 2020 logo. Retailers across the UK who have been consistently recognised by their customers as providing an outstanding experience by rating them highly on Auto Trader will be receiving a collection of exclusive Highly Rated assets, including stickers and digital logos to promote their excellence across their physical and digital showrooms.
Dealers meeting the criteria will also have a Highly Rated logo added to their Auto Trader profile page for maximum visibility. To qualify for Highly Rated accreditation, retailers must have a high volume of recent reviews on Auto Trader, a high overall review rating on Auto Trader and regular engagement with customer reviews by replying to them.
Auto Trader sales director, Darren Moon, said: “We know the car buying experience can be stressful for some consumers, and now with social distancing anxieties adding to their concerns, it’s never been more important for retailers to be able to reassure potential customers of the quality service their business is able to provide.”
Further pressing the need for an omni-channel approach, Cazana editor Rupert Pontin, in the company’s monthly insight, said that the retail consumer has largely felt comfortable with the new sales environment, but it is still important that dealers make sure they cater to all customers, including those that feel uncomfortable going to the showrooms. He said that the development of “mouse to house” solutions are essential to ensure the motor retail industry reaches all customers.
Mike Jones, chairman of dealer profitability specialist ASE told members at the Vehicle Remarketing AGM in early July that all key elements of the digitisation of the sector had been accelerated over the last few months.
He said: “Whichever aspect you examine, from retail to delivery, there has been a marked shift online. Probably the only major trend that has suffered is mobility services, because of the need to share assets such as through car and ride sharing. Everything else has advanced.”
He added that what the industry was now seeing was genuine omni-channel retailing. “Arguably, we have even become a digital-first sector in a very short period of time.”
And the demand for contactless services from dealers remains, with 76% of prospective buyers looking for virtual dealer appointments, at-home test drives, or home delivery.
CarGurus reports that the number of car buyers delaying their car purchases decreasing from 87% in April to 77% in June, while only 2% of those who planned to buy this year before the pandemic have delayed their purchase indefinitely.
On the financial end, 43% of car buyers are less confident in their ability to afford a vehicle purchase as a result of COVID-19, creating greater demand for financing deals. Before the pandemic, 40% of car buyers planned to finance their purchase, now 51% plan to or already did.
However, 27% say they’re saving more than usual and 40% spending less on experiences.
Also, more than two thirds (34%) of car buyers said they expect to use their vehicle more going forward, meaning that cars are becoming even more vital to daily life.
Madison Gross, director of consumer insights at CarGurus, said: “With the vast majority of buyers still researching, and almost all expecting to follow through on pre-pandemic purchase plans within the next year, it’s more likely that we will see them dip back into the car market, particularly as vehicles become even more important to their daily life.
“It’s also clear that buyers are even more open to researching and interacting with dealers online, and dealers that can pivot quickly to contactless services will be in the best position going forward.”
Bricks and clicks
Online used car platform heycar is also extending its services by giving more customers the ability to purchase cars online through a new partnership with SilverBullet. It said that a third of its users now expect to be able to buy a vehicle online.
The partnership allows customers to get all the paperwork out of the way before setting foot in a dealership including reserving the car of their choice, applying for finance, and getting a part exchange quote.
heycar has over 3,700 dealerships on its network and lists almost 153,000 cars for sale. Brook Bishop, head of strategy at heycar, said: “The coronavirus crisis is accelerating change across the used car market. We are determined to be at the forefront of this.
“Our customers are telling us they want to be able to purchase vehicles online, and our new platform will allow many to do just that, by completing their part-exchange and finance arrangement from the comfort of their own home before setting foot in the dealership. This is the first step in realising our wider e-commerce strategy, which we’re working on with multiple partners.”
DS Automobiles has also revealed a new Virtual Showroom to complement a service allowing customers of the brand to view the latest models with live tours, interact with DS Advisors, book test drives and request Home Delivery online.
Alain Descat, managing director for DS Automobiles UK, said: “Virtual Showroom will sit at the centre of our growing suite of digital tools, working in harmony with our network of boutique showrooms to offer each customer a DS journey befitting of their individual needs.
“We want to rewrite the retail experience, so that customers can experience all that the brand has to offer right from the very beginning; helping to reinforce the momentum that we built throughout 2019.”
Despite the rush of many to get online, Cazoo has taken a step into the physical world by acquiring independent used car retailer Imperial Car Supermarkets. The move, it has said, will improve the online dealers’ infrastructure in the UK, providing Cazoo with a national network of storage, distribution, after sales and collection hubs.
Imperial Car Supermarkets was established in 2006 and has grown to 18 retail sites across the UK including Bristol, Birmingham, Cardiff, Exeter, Ipswich, London, Portsmouth and Southampton, offering over 2,500 nearly new and used cars for sale and supported by a number of service, preparation and support centres.
Alex Chesterman OBE, founder & CEO of Cazoo said: “The acquisition of Imperial Car Supermarkets will enable Cazoo to better serve its customers and fulfil our increasing number of deliveries throughout the UK.
“This deal provides us with key infrastructure as well as a wealth of automotive expertise that will help accelerate our growth. Imperial has a highly dedicated team and I am delighted to welcome them to Cazoo.
“We think this recent acquisition provides a great balance by combining Cazoo’s digital capabilities and platform with Imperial’s automotive infrastructure and expertise and will enable us to deliver the UK’s best used car buying experience.”
Online events
It’s not just dealers that have embraced the online world. Automotive industry charity Ben is launching its first ever series of virtual challenges, as part of Bring It On 4 Ben.
The first of the charity’s virtual challenges to run this year, Formula Ben Silverstone VGP, starts on 2nd August and is inspired by the Formula 1 British Grand Prix at Silverstone. The Formula Ben Silverstone VGP will help automotive people get back on track, funding vital support that is needed now more than ever.
To take part, each participant needs to complete the length of the Grand Prix, a total of 190 miles, by exercising in their own way to raise vital funds for Ben.
Participants choose how they complete the challenge, for example, by walking, cycling, running, swimming, or even by playing basketball, wrestling, trampolining – or a mixture of whatever they like.
Participants have eight weeks to complete the challenge, which ends on 30th September. Those taking part will also be able to see their location on the Silverstone circuit and track their progress as they complete the 52 laps of the British Grand Prix.
As well as raising vital funds to support automotive people, the Formula Ben Silverstone VGP also aims to help people improve their physical and mental health & wellbeing during this challenging time.
In addition, taking part in the challenge offers people the opportunity to connect with others and be involved in something fun, while supporting Ben to help automotive people get back on track for good.
Matt Wigginton, fundraising director at Ben, said: “The whole team at Ben are incredibly excited to announce our new series of virtual fundraising events! In the current landscape, we had to adapt quickly and come up with new ways of fundraising because mass participation events can’t physically take place right now.
“So, Formula Ben Silverstone VGP is a fantastic way to have fun and raise money so we can continue providing life-changing support for automotive people, which is needed now more than ever. We’re supporting more and more people with their health and wellbeing during this challenging time, so we need to make sure we can help them get back on track, which we can only do by continuing to fundraise.”