This year’s Driving Digital keynote speakers addressed the macroeconomic climate and its effects on the industry, the importance of digitalisation, the fluctuating market of new and used electric vehicles, adapting to consumer demand and the initial steps to introducing AI technology into the modern-day dealership.

Driving Digital 2022 took place in London at Westminster Hall on Thursday 11 May 2023.

The event started with a warm welcome from NFDA Chief Executive Sue Robinson, who provided a short update on the progress made by NFDA’s Electric Vehicle Approved (EVA) accreditation scheme and Drive My Career.

Pressures and opportunities affecting UK automotive retail

The conference started with Steve Young, Managing Director of ICDP, who explored the macro and micro economic factors which are shaping the automotive industry, as well as the pressures and opportunities that may come from future dealer/OEM relationships with agency models.

There are unprecedented challenges and ‘rocks in the road’ for the automotive retailing sector, including but not limited to:

  • The legacy and implications from COVID-19
  • Global production shortages
  • Environmental concerns
  • Technology advances
  • Economic pressures
  • Supply chain volatility
  • Geo-demographic shifts and
  • Regulatory uncertainty

In some capacity, these challenges have had or are starting to have an impact on many key areas of business for the retailer:

  • New contract formats
  • Network restructuring
  • Aftermarket strategy
  • Product and offer evolution
  • Dealer investor consolidation
  • Digitisation and supply chain

How dealers adapt to these changes will be an indication to how their business will perform in the near future. Many of these key adaptations and opportunities were discussed by the following speakers, with evidence and case studies to support this.

One example provided by Young was the importance of omnichannel retailing for business strategies. There is a direct correlation between customers that have viewed a product online and their chance of purchasing a vehicle upon visiting a showroom. On the flip-side, consumers that have not visited a product online are more likely to browse upon visiting a showroom. This data coincides with the distance travelled to reach a showroom, the further the distance the less likely a customer will purchase first time on arrival which ties into the necessity to have a fully functioning online platform where consumers can browse prior to a dealership visit.

  • Digital disruption and evolution – shaping the future of automotive retailing

The industry is moving at record speed, with evolutionary leaps in all aspects of automotive. In his talk, Auto Trader’s Commercial Director, Ian Plummer, discussed how changing consumer sentiments and evolving car buying behaviours are disrupting the traditional sales model. Using snapshots from our comprehensive ‘Digital Retailing Research’ survey (a collaboration between Auto Trader, NFDA and ICDP), Ian revealed how retailers are prioritising a blended retailing model. A key stat drawn from the data was that 94% of respondents said they research online, and 94% say they visit a dealership to complete purchase – highlighting the significance of a flexible end-to-end car buying journey.

Ian’s presentation included a montage of interviews with sales executives across the country, providing first hand experiences and understanding of how important a mixture of online and physical retail models, which will be shared towards the end of the month with the full digital retailing research report.

“Dealers have transitioned from digitally enhanced, to digitally driven”.

  • Avoiding potholes on the ‘Road to 2030’

Auto Trader’s Brand Director, Marc Palmer, divulged into the latest new and used EV trends and insights from across the market on our road to 2030.

From the data, we can see that the fleet market continues to drive new EV sales, as businesses are looking to electrify their fleets for efficiency and sustainability purposes. Unfortunately, private demand for new EVs has started to fall, and this can be seen in through Auto Trader web trafficking and ad views.

There are a number of factors that can be attributed to the fall in EV demand. Whilst the choice for buyers between EV and ICE is gradually improving, now only four times as more, the problem persist that:

  • This choice remains outside of consumers budgets
  • There is not enough product choice under 30K
  • EVs are 37% more expensive that ICE
  • Which means that the demand is still spread across the most affluent areas

Palmer followed into the Used EV market and how there are many positives to take from it:

  • Demand for used EVs is ahead year-on-year
  • Ad views and leads are ahead significantly
  • The market is maturing, not ‘breaking’ – the market was very strong so it is balancing
  • The price gap between EV and ICE has closed considerably, examples between Tesla and BMW/Jaguar – After 3 years
  • Savings from running cost post purchase may convince buyers to switch to electric
  • Future retail values were very strong before supply corrections, but have dropped recently in response to the market

Palmer concluded by referring to Auto Trader’s recent ‘Road to 2030’ report and highlighted that Government needs to step in to support the industry so that we can get ‘back on track’ – by offering:

  • Fairer charging costs: by equalizing VAT on public and private charging
  • More incentives to make EVs affordable for all: such as reducing VAT on used EVs and lower or interest free rates on EV financing deals
  • Initiatives to build both buyer and seller confidence in used EVs with a focus on battery health: Research shows that for car buyers, the top concerns about used EVs are related to battery health[xi] and so adopting common standards on battery health and charging terminology should be a top priority for government and industry.
  • Be prepared. Marketing and customer focus – a TrustFord case study

Our next speaker for the day was Julie Greenhough, Marketing Director for TrustFord, who explored TrustFord’s DNA and how it has helped to shape their marketing strategies. Some of the key takeaways from TrustFord’s marketing strategies include:

  • Use insight & data to drive performance
  • Understand business challenges and priorities
  • Plan well ahead
  • Be reactive & nimble
  • Seek inspiration from within & beyond the industry
  • Innovate to stay ahead in the changing world

Greenhough expressed the importance of data analysts within her marketing set up, as an integral part of campaigns and marketing leads. With an extensive database, it is crucial to have a team of data analysts to interrogate the data.

  • Uniting Customers, Retailers and OEMs through technology

Alistair Horsburgh, Chief Strategy Officer, CitNOW Group followed with his extensive industry experience to paint a picture of how technology can support the customer experience for both OEM’s and dealers in a “hybrid” agency and franchised dealer world.

CitNOW group ended the night at the AM Awards and claimed Supplier Partner of the Year, a huge achievement and congratulations to Alistair and the team.

  • Changing lights

Judge Service founder, Neil Addley, took to the stage to dissect his latest research to understand consumer expectations and attitudes in the transition towards electric.

Initially, it is important to understand some of the effects that the cost-of-living crisis will have on customers buying habits. Judge Service data revealed that half of consumers will in fact not change their buying habits with cost of living, the general public will continue to spend. Nevertheless, when taking into consideration car buying, the survey revealed that over 25% are considering keeping their current car for longer. The importance of strong marketing and good customer service has never been more important.

Addley offered three key takeaways from his research as to why customers never decided to buy upon visiting a retailer:

  • 38% stated they were not offered a test drive
  • 35% were not offered finance options
  • And 36% had not been followed up

These are all aspects which are amendable. The research delved into a variety of other avenues which were extremely insightful for the retailer, all of which will be shared next week in the full slide pack.

  • Is it time to think eColleague over eCommerce?

Finally, NFDA’s keynote speaker for the day was none other than Vertu Motors Plc CEO, Robert Forrester. Forrester offered an engaging presentation that gripped the room, exploring the variety of avenues in which Vertu have used technology and innovation in order to maximise efficiency and return on investments.

Not only have Vertu developed clear and consistent strategies for their business, but they have also created a technology mission statement. With the constant evolution of technology and new products entering the market, Forrester expresses how easy it is to get pulled into more products than is beneficial. The mission statement ensures that every technological cost reaps a positive return on investment; ensures customer experience is at the forefront of decision making; and ensures there are clear stakeholder outcomes. A notion which he suggests all dealer groups should adopt.

Another preposition Forrester proposed to the room was that dealers should be putting colleagues first, before the customers. A strong employee and colleague workforce will simultaneously have a positive outcome on customer experience. Vertu have introduced a number of AI technologies and innovations which are designed to improve colleague experiences, improve efficiency and improve customer satisfaction.

  • For the Admin department, Vertu have introduced an AI assisted software to support admin tasks
  • For the Sales department, Vertu have built a price fixing platform for their sales process
  • For Used car buying, a price comparison site
  • For the Service advisors, a self-service check in machine

Simple but extremely effective additions to the business. More details will be shared about this in the following week through the slide packs.