Market Report

Market Report November 2020

The ninth Auto Trader Market Report investigates the long-term trends in digital retailing, what’s driving adoption and what’s preventing it, as well as the key benefits to the automotive market.

Consumer appetite towards buying​ online is increasing

41%

of consumers would consider buying a car completely online

61%

of consumers think buying online is appealing when presented with a tangible example of how it could work

 

As the prospect of buying a car completely online is new to most, many consumers can’t fathom how it would work. But when they are offered a clear scenario which explains the process, the appeal increases to 61%. It’s an awareness of online buying options which is a challenge.

Digital car buying trends

There is real demand from consumers for more of the car buying process to be available to do digitally;
among consumers who have bought a vehicle in 2020, many would have liked to have completed more of the jobs digitally.

46%

of people want to buy online for ease and convenience

35%

of people want to buy online to get the car quicker

33%

of people want to buy online because they think it’s easier to compare deals

23%

of people want to buy online to avoid haggling

So, what are the barriers for consumers and retailers to buy and sell online?

What’s preventing consumers from buying digitally?


Consumers currently find completing many jobs, particularly those later on in the buying
process, difficult or impossible to complete online.

Consumers still value retailer interaction

When given the options, most consumers want to complete the majority of the jobs away from the dealership. However, face-to-face interaction is still valued and most still want a degree of human interaction at some stage of the buying process.

Imagine you are buying a used car, how would you prefer to handle the following list of jobs?

The majority of consumers want to complete most jobs away from the dealership, highlighting a clear opportunity for retailers to leverage online to improve the consumer experience. However, this doesn’t necessarily mean no human interaction – as this element is valued by many.

Consumer appetite towards online buying is increasing

29%

of people prefer to buy a car completely online without human support

29%

of people would prefer to buy online with human support

Who buys digitally and what are the benefits for consumers?

By creating confidence in the online experience retailers can start to decrease the need for some consumers to visit the dealership to feel confident in their decision.

Who is buying online?

Proactive showroom visitors

  • Consumers who want to complete most of the car buying process online but still value some aspects of the retailer experience; they value the blended online/offline experience
  • People in this category tend to end up online because they struggle to get the right deal or car offline, or because they know someone who can vouch for the process as a different approach to buying in person
  • Proactive showroom visitors recognised the benefits of completing the process online and are likely to repeat or do more jobs online next time they buy a car

Reluctant showroom visitors

  • Consumers who want to do the entire process online but still feel as though they need to go to the retailer for some parts; they resort to a blended online offline experience because they feel they can’t do some elements online
  • People who struggle to complete some of the online aspects and visit the dealerships at some point as a result
  • Reluctant showroom visitors recognised the benefits of completing the process online and are likely to repeat or do more jobs online next time they buy a car

Digital adopters

  • Consumers who have fully embraced an exclusively online buying experience
  • People who start the car buying process online and feel they can complete the purchase digitally and don’t see the need to visit the dealership
  • Digital adopters thought the digital buying process worked well and would do the same next time

What are the benefits to accelerating the adoption of digital retailing capabilities?

It’s clear there is a meaningful shift in sentiment towards digital retailing. We believe it represents an exciting opportunity for the industry to significantly improve the consumer experience, and in turn accelerate the buying process.

Nathan Coe, Auto Trader Chief Executive Officer

Embracing digital retailing is a vital way to improve the current buying experience for consumers by giving them more options, an easier process and a more engaging experience that can be completed when and where is most convenient. And, if the car buying cycle was just 10% quicker than it is today, it would lead to c.1million more car sales a year.

Retailers will embrace digital retailing at different paces, so the retailers who lead the way stand to benefit more by increasing their market share.

How do we give consumers the confidence to buy online?

The three core pillars to build consumer confidence in car buying are: trust in the vehicle; trust in the retailer and trust in the price. When it comes to supporting the digital car retailing process, there’s a fourth pillar which helps equip consumers with the confidence they need to buy their next car digitally – trust in the process. By embracing these four pillars, retailers can take advantage of the opportunities presented by digital retailing.

How Auto Trader can help

Offer consumers a guaranteed part-exchange (GPX) price without the risk of having to purchase the vehicle
Speak to your Account Manager about our GPX product and how you can sign up

Highlight off-site transaction options to consumers
Make sure you’ve updated your profile on Auto Trader with details about any home delivery and click & collect services you provide so these can be clearly displayed on your adverts and feature on our Buy Online hub. Ensure the process for an off-site transaction is clearly displayed and make sure your contact details are clear so consumers can get answers to any questions they may have.

Price to market
You buy at the right price, keeping the live retail market and your margin aspirations in mind. This then ensures you are in line with the market, and your vehicles are priced fairly. Review this often and use the additional space provided in adverts to highlight any features or guarantees that may impact the price.

Convert leads to sales
Leverage the largest, most engaged audience to increase off-site sales by ensuring your adverts are high quality, guarantees and assurances are clear, and leads are responded to quickly, with clear explanations of off-site transaction options and how it could take place.

Want to know more? Just ask, we’re here to help.

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In a recent consumer facing video, our You Tube Director @MrRoryReid explains why the 2030 ban on new petrol and diesel car sales is a good thing and why car buyers need to embrace EVs. Do you agree with his viewpoint? https://t.co/y89i8EvQoe
Good news for retailers in England with today's confirmation that retailers can remain open in all tiers that come into effect from Wednesday 2 December. https://t.co/R1RAQCBpAx
Join @Motor_Ombudsman , Auto Trader and @radiuslaw for a free webinar exploring the future of online retail in the automotive industry in detail. Register now > https://t.co/9e5gGIp2Ix https://t.co/mbuNuYcYD3
Leads from Auto Trader continue to be far higher when compared to the same time last year, with the year-on-year (YoY) increase in leads higher than the increase in visitors to Auto Trader, up 15.3% YoY, and ad views, up 12.2% YoY. https://t.co/On3wLY81J5
Be sure to clearly display what delivery methods you are offering and what safety measures you have in place on your Auto Trader adverts. Many retailers already have... https://t.co/P9qqRfcsIU
Remember to upgrade your package by the 30th November to benefit from our free December period. Contact your account manager for more details. https://t.co/gQr63pAnaP
Our latest support for retailers in the UK in December. https://t.co/5lX1pXw2ka
Over to our Data & Insight Director @therickw who reveals that visitor levels to Auto Trader are up 15.3% compared to the same time last year with leads up a massive 25.2%. https://t.co/OGfyiQD5Yu
A reminder from @MarcThornboroug that if you are taking part in any fundraising activities, we do have a fund to support you. Get in touch with your account manager to find out more. https://t.co/QJbvEpTRBS
And we're off with @stuart_trader kicking off this week's webinar. Stay tuned right here for all the highlights over the next hour.

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