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.
How has consumer sentiment to buying digitally changed?
Among those who have recently bought a vehicle, many would have liked to complete more jobs online in the process, suggesting there is real demand for the industry to move further towards digital retailing.
How has consumer sentiment to buying digitally changed?
Among those who have recently bought a vehicle, many would have liked to complete more jobs online in the process, suggesting there is real demand for the industry to move further towards digital retailing.
How has consumer sentiment to buying digitally changed?
Among those who have recently bought a vehicle, many would have liked to complete more jobs online in the process, suggesting there is real demand for the industry to move further towards digital retailing.
How has consumer sentiment to buying digitally changed?
Among those who have recently bought a vehicle, many would have liked to complete more jobs online in the process, suggesting there is real demand for the industry to move further towards digital retailing.
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?
It’s difficult for consumers
- The car buying process is a complex one with lots of variables –
for instance organising finance - Buying a car isn’t something consumers do often, and when
they’re out of their comfort zones, they’re more inclined to
stick to what they know and buy in person from a dealership - The process is more emotional and sensory than other
purchases which are made online and consumers struggle
to understand how they’ll replicate their experience online - There’s lots of information to process when buying a car,
which is overwhelming
Consumers lack awareness
- Consumers aren’t aware of the ability to complete most of the
car buying jobs online; those who do buy online stumble upon
the functionalities - They struggle to understand how buying a car online could work
or how the jobs done at the retailer could be recreated online;
the idea is considered a far-reaching, futuristic concept
Creates new challenges for retailers
- There are added complications for off-site transactions,
including accepting returns - The industry is built for researching online and selling offline
sales, and it takes time and investment to change how retailers
sell and communicate with consumers - Technical capabilities aren’t sufficient in delivering offsite
transactions or in helping retailers give buyers the confidence
to buy off-site
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
Reluctant showroom visitors
Digital adopters
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 OfficerEmbracing 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.
