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Retailers embracing digital say they’re selling more cars
Car retailers embracing digital sales believe they are selling more cars, more efficiently, and to more satisfied customers, according to a new report. Automotive research agency ICDP, working in partnership with the National Franchised Dealers Association (NFDA), and Auto Trader, recently published the findings after polling around 160 retailer directors and owners in the second half of 2021.
As well as the perceived boost to sales, the survey also found that the pandemic and physical forecourt closures accelerated the adoption of online retail experiences, brought about new online only retailers, and impacted consumer preferences. In a separate survey by Auto Trader, 72% of 5,000 consumers said they find digital car buying appealing – up from 61% in 2020.
What digital services are retailers offering?
ICDP’s study found that eight in 10 retailers are now offering a range of digital services, including:
- enabling consumers to complete a finance application online (83%)
- place a reservation online (71%)
- apply for a guaranteed part-exchange valuation (41%)
- click & collect (86% 2021 vs 15% 2019)
- home delivery (85% 2021 vs 30% 2019)
- and video chat (83% 2021 vs 28% 2019).
Critically, the survey found that car buyers are engaging with these services in significant numbers. Almost three-quarters of retailers offering online trade valuations are seeing at least one in four customers using it and the same proportion are generating an online finance quote. Two-thirds of retailers further along in the digital journey are reporting a higher percentage of buyers accepting the price offered. And at least six in 10 believe they are already experiencing strong value from all the services implemented.
What the report’s authors have to say
Ian Plummer, Auto Trader’s Commercial Director, said: “Clearly, responding to changing consumer needs and expectations is having a positive impact on both efficiency and sales performance. While behaviours are changing, it doesn’t mean everyone is going to buy every car in an end-to-end online journey. This research tells us that retailers should think ‘digital first’ to make these services and tools available where they meet the needs of their customers. Don’t think about them separately, but rather as part of how you operate overall and make sure they’re really connected into your forecourt experience as most consumers will be completing at least some of the jobs on the forecourt for some time to come. So, it’s crucial to enable that in a joined-up way.”
Steve Young, Managing Director at ICDP, said: “With evolving consumer car buying behaviour and the emergence of new well-funded competitors, digital retailing as part of a broader omni-channel strategy is critical for the continued success and future growth of car retailers. Over the past two years, the industry has experienced significant pressure to accelerate the implementation of digital retailing elements, and from our research it is clear that those who are focusing their efforts on this area are the ones who will reap the rewards. They will also be in the best place to face off to the new competitors.”
Sue Robinson, Chief Executive of the NFDA, added: “Embracing digital retailing is vital in today’s marketplace. The most successful businesses are those that offer a variety or routes to their customers to start and complete their vehicle buying journey. The pandemic pushed retailers to accelerate their digital strategy and adopt practices they are now benefitting from. Franchised retailers continue to demonstrate their resilience and ability to adapt.”
For further information on the report visit the Auto Trader website.