WE’LL BE BUYING CARS LIKE WE ORDER FROM OCADO WITHIN A DECADE SAYS AUTO TRADER
Car retailers will adopt grocery style retail models over the next few years, marketing and increasingly selling vehicles online. This will enable consumers to decide which of the car buying jobs they do online and which they do offline.
That’s according to Auto Trader, the UK’s largest automotive marketplace. Like Waitrose, Morrisons and Marks & Spencer, dealerships will still operate physical locations, but they will no longer be used primarily as showrooms or to complete the sales process. They will be enabled through an Ocado-style retail model which will support their omni-channel approach.
Today, 45% of car buyers say that if they were buying a car on finance they would be happy to do the whole thing online. This rises to nearly two-thirds (64%) for the younger generation of buyers - 18 to 34-year olds.
Auto Trader spoke to 2,000 motorists about their car buying habits for its latest Market Report, The Future of Car Retailing, published today (26 September).
“Dealerships certainly won’t disappear, but they will continue to evolve,” explained Nathan Coe, CEO designate of Auto Trader.
“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 their do their physical one, and re-evaluate the physical elements of their cost base to run more efficiently.
“A more personalised retail interaction will give consumers a seamless journey between the online and offline experiences.”
In the past, car buyers typically visited five retailers; these days that has reduced to two, but Auto Trader thinks the direction of travel is clear and in the future many cars will be bought without many visits at all.
A small number of retailers have 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. Today, most retailers only offer the initial vehicle selection and research journey online.
Retailers who have digitised their operations have seen stock turn – the time it takes to sell a vehicle – reduce to less than 40 days versus an industry average of 80 days. Unsurprisingly their margins are also much better – almost double in fact. “Technology can improve the car buying process enormously, making it simpler, more intuitive and more transparent, transforming the experience for consumers” said Nathan Coe.
Online sales of cars are expected to pass one million globally next year, and they will grow to six million by 2025 according to a recent Report from Frost and Sullivan. In 2018, the Report said 618,000 cars were sold online, nearly double the number sold digitally in 2017.
 Auto Trader Research September 2019
 Frost & Sullivan Global Vehicle OEMs’ New Online Retail Strategies, Forecast to 2025