Early signs of a strong consumer recovery from latest lockdown
The latest data from Auto Trader indicates most retailers are now trading at around 75%[1] of normal volumes. This is up significantly from January and points to a strong recovery over the coming weeks as physical forecourts fully re-open.
The Auto Trader marketplace has also seen a significant step up in audience performance, which last week (15th – 21st February) saw 15.2 million cross platform visits. This represented growth of circa 10.3% on the same period last year and was up 6.5% week-on-week. With an 8.5% increase in advert views, and an average of 1.4 million unique users every day last week (which is up 9.4% year-on-year), this strong level of consumer engagement resulted in a circa 31.3% year-on-year (YoY) increase in the number of leads[2] being sent to retailers.
Based on consumer activity on Auto Trader, consumers were clearly expecting the news that forecourts will fully re-open in the coming weeks and have gradually been increasing activity. On-site research conducted on the 23rd February suggested that for 73% of the circa 800 consumers intending to buy in the next 12 months, it hadn’t made any impact on their planned purchase timeline. Just 11% said it had made them want to delay their purchase, with 6% saying they were now planning to buy sooner.
Reassuringly, in addition to these consumer metrics, a number of wider economic factors point to another period of strong retail demand once forecourts are able to reopen. The latest Bank of England findings indicate average household finances are in better shape than they were pre-COVID, with savings levels around three times as much as in any other nine-month period. What’s more, significant levels of consumer credit have been repaid with outstanding credit to individuals dropping £23 billion since February 2020.
This aligns to Auto Trader research which revealed that consumers' confidence in being able to afford their next car remains very high (8.43/10), and ahead of confidence levels recorded pre-pandemic (8.11/10 in January 2020). For those looking to buy in the next two weeks, levels are even higher (8.67/10).
Commenting, Auto Trader’s chief executive officer, Nathan Coe, said: “We are seeing early signs of a strong consumer recovery from the latest lockdown. It’s clear that consumers are getting more comfortable with the current buying options available and are anticipating physical forecourts fully opening in the coming weeks. We have seen this in both a step up in our audience performance and our proxy sold data.
“It is critical that retailers are showcasing all of their stock online to maximise current online sales opportunities now, and to ensure that buyers who prefer to wait a few weeks can begin to make their buying decisions. We know April sales come from consumers searching in February and March and with the additional impetus from the plate change we can expect this to be even more pronounced this year.”
[1] Sales proxy data based on the levels of stock removed from Auto Trader
[2] Leads are categorised as email, part exchange enquiries, finance enquiries, texts and chats.
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