The very modern phenomenon of FOMO (Fear of Missing Out) has been fuelling an increase in footfall at traditional used car dealerships, according to the boss of the UK’s largest independent retailer of nearly new cars and vans.
Mark Carpenter, CEO of Motorpoint, was responding to today’s publication by the SMMT (Society of Motor Manufacturers and Traders) of the latest used car market data, which showed an 8.5% decline in 2022 vs 2021.
And he said the drop in sales volumes, caused by subdued consumer confidence and supply chain problems in the new car sector, was bringing about change in the buying habits of customers.
According to Carpenter, there had been a marked increase in showroom traffic across all 19 of Motorpoint stores as rising interest rates and the cost-of-living crisis led many car buyers to revert back to the comfort zone of more traditional, physical retail environment.
Customers, he said, are ‘treasure-hunting’ as they aim to make their money stretch as far as it can while seeking the reassurance that comes from browsing stock in person, touching and test driving the cars they’re interested in and dealing with a real sales person.
Carpenter said:
“The last 12 months have been challenging for everyone in automotive retail and the used car sector is no different, But there are green shoots of recovery as we start to see new car supply filter through. Our average prices have come down by around 10-15% over the last quarter and the whole market feels like it’s returning to a state of normality.
“The first quarter of 2023 feels a bit better. As a brand we grew our volumes in December and January, and we see lots of reasons to be positive. But if other retailers are experiencing similar growth the challenge for the sector will be that supply will start to tighten again and prices will start to go back up.”
On consumer buying habits, Carpenter added:
“One very interesting outcome of the turmoil of the past 12 months has been the resurgence in showroom sales vs online sales.
“We are seeing a return to in-store shopping because people want to know they’re getting the best value. Rather than just buying something online, they want to come in and make sure they are not missing out on something better. It’s a real FOMO behaviour and whether it’s a car, a pair of jeans or a tin of beans, consumers want to know they’re getting the best value-for-money.
“People are also more open minded to try something new and switch brands in store whereas online they’re more likely to stick with what they know.”
Carpenter was also quick to underline his confidence in Motorpoint’s strategy for growth in the medium and long term. The brand will open two new stores in Ipswich and Milton Keynes in the coming months and has no plans to stop its roll-out there. It also continues to invest heavily in developing its online presence, with the opening of a new digital hub in Manchester aimed at attracting the very best tech talent.
Carpenter said:
“We’re really confident. Every market we’ve ever gone into, we take market share by bringing our unrivalled offering to customers, so I have real faith. When we go into a market, I know we’ll offer something that’s of real benefit to car buyers in that area.
“Even though the market is in a period of uncertainty we will continue to invest. This is an investment at the bottom of the cycle that will take us up into the growth of the cycle and we’ll benefit from that.
“As the market recovers, we’ll grow our share and we’ll grow our volume.”
*Article Source http://www.motorpoint.co.uk
