“Dealerships will remain central to the world of automotive retailing, but they will have to evolve."
The key finding from the latest edition of the Auto Trader Market Report: The Future of Car Retailing, 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.
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, Auto Trader says.
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].
Despite pointing out that the average number of retailers visited has reduced from five to just two, Auto Trader suggests ‘the retailer remains vital’.
These figures, however, differ from ICDP’s findings which show that both customer visits to physical dealerships as well as the number of dealers visited are experiencing an upward trend. According to
Auto Trader, 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.”
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 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, sales and finance.
Read the full Auto Trader Market Future of Car Retailing Market Report here: https://plc.autotrader.co.uk/press-centre/?type=Publication
[1] Frost & Sullivan Global Vehicle OEMs’ New Online Retail Strategies, Forecast to 2025
[2] Auto Trader Car Buyers Report 2019, July 2019
