Automotive Industry Digest

Latest Fleet News For The Automotive Industry

Latest dealer news

Retailers need to ‘digitally rewire’ & prepare for full online end-to-end journey

Whilst retailers will be critical to the car buying experience, their continued success will rely on a significant ‘digital rewiring’ over the next decade to address the imbalance between where car buyers are spending their time, and where retailers are spending their money.

That’s the key finding from the latest edition of the Auto Trader Market Report: The Future of Car Retailing, which claims the most successful retailers will adopt an omni-channel retailing model – including the option to buy online – to meet the growing expectations of car buyers for a seamless offline and online experience.  

The study of 2,000 consumers revealed that nearly half (45%) would already be happy to complete the whole purchase online if buying on finance. This increases to nearly two-thirds (64%) for the younger generation of buyers (18 to 34-year olds). This is at a time when, according to Frost & Sullivan, online sales of cars are expected to pass one million globally next year and to reach six million by 2025[1].

Whilst the average number of retailers visited has reduced from five to just two, the retailer remains vital.  According to Auto Trader research, three in four (74%) consumers[2] wouldn’t buy a car without speaking to a retailer.

“Dealerships will remain central to the world of automotive retailing, but they will have to evolve as the one size fits all approach is fast becoming redundant,” explained Nathan Coe, Auto Trader’s CEO-Designate. “Retailers will need to adapt to provide a blended experience for consumers so they can choose the right journey for them, be it online or offline, or any combination of the two.”

However, this evolutionary shift is not just for the benefit of the consumer; quite the contrary. Coe continued: “The future is about digitizing the ecosystem to enable retailers to move to a less labour and property intensive model that better serves car buyers. Successful retailers will embrace technology, invest equally in their online platform as they do their physical one, and re-evaluate the physical elements of their cost base to run more efficiently.”

A number of retailers have already embraced digital, not just in the way they market and sell cars but in every aspect of their business, including buying and pricing vehicles, and the end-to-end transaction.

The omni-channel approach is not limited to large groups; there is a huge opportunity for independents to utilise their agility and size to adapt to local market conditions, making use of their flexibility when it comes to product choice and operating approach. Their size also allows independent retailers to explore different avenues at a faster pace.

The Report highlights that the introduction of online payments and the shift to an omni-channel retail model is part of a broader need to make the entire car buying experience more efficient. Key to this will be greater digital investment at every step of the retailer process, including:

Buying and pricing: Retailers who utilise data to complement their own expertise to inform their forecourt strategy can ensure they’re stocking the most desirable cars and pricing them according to the market – key to creating a more transparent customer experience and increasing stock turn (40 days versus an industry average of 80 days). Digital disruption of the traditional auction process will also make buying new stock more efficient.   

Sales: As well as transacting online, the offline/physical sales experience needs to be aligned to the online journey. Auto Trader research shows car buyers need to complete approx. 28 jobs to complete a car purchase; sales executives need to establish where a car buyer is on their journey and pick up the missing pieces rather than trying to start from the beginning when entering the dealership. 

Finance: Enabling customers to be able to complete as much of the finance process as possible before visiting the dealership. With circa 90% of brand-new cars and circa 30% of used bought using finance, retailers need to make finance front and centre online and offline.  What’s more, making the process digital and more transparent will help meet the regulatory requirements recently set out by the Financial Conduct Authority (FCA).

Whilst these steps can and should be implemented by all retailers regardless of size, introducing the infrastructure necessary to offer a true end-to-end solution may be out of reach for many brands.  To help retailers adopt – and reap the benefits of – an omni-channel retail model, Auto Trader is continuously evolving its retailer centric (as described by the AIM Group[3]) products and services.

Coe concluded: “As a business we’re constantly evolving to ensure we’re best positioned to help our customers adapt to the key changes in the market. To this end, we’re already working with retailers to improve the consumer buying experience to make it more transparent and convenient. We make it easy for retailers to profit on the consumer expectation to search by monthly budget, by surfacing their finance options at the beginning of the car buying journey. We also offer part exchange valuations to improve transparency and consumer confidence. And as we move towards the world of buying online, we’ll also look to facilitate those transactions.”

 [1] Frost & Sullivan Global Vehicle OEMs’ New Online Retail Strategies, Forecast to 2025

2 Auto Trader Car Buyers Report 2019, July 2019

3 AIM Group Marketplaces Report Vol. 20 No. 21 – September 2019

*Article Source Newspress

Automotive Industry Digest

Social media & sharing icons powered by UltimatelySocial