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.

Video

Nathan's summary

Hear from our CEO, Nathan Coe, as he delves into some of our research and findings.

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.

How consumers want to complete jobs online varies

29%

of people prefer to complete jobs fully online without any human support

29%

of people would prefer to complete jobs online with some 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 next week’s webinar we’ll be joined by @mikejonesase to talk through what the latest budget means for retailers. We’ll also discuss what independent and franchise retailers can learn from each other as they prepare to reopen physical forecourts > https://t.co/rKjsWxrWjN https://t.co/tTxqOKW63A
Our teams were delighted to be a part of #BreakoutForBen, raising £12,225 towards the staggering total achieved by all who took part @BenSupport4Auto https://t.co/JqHkpGF9cE
To celebrate #InternationalWomensDay on Monday 8th March, we'll be hosting a webinar centred around this year’s theme #ChooseToChallenge. Find out more and register at https://t.co/z83jRsYDtp https://t.co/Yfvh2KkK1A
Our Data & Insight Director @therickw shares our latest audience data along with what we are seeing in terms of overall market and retailer performance. https://t.co/r5vdGHI1UM
In our next webinar we welcome back @mikejonesase ,chairman of @ASE_Global, to give the latest update on government financial support and answer your questions which you can pre-submit by following the instructions below. https://t.co/al6EzwaeJ3
Whilst the latest data from the @SMMT shows new car registrations were down -35.5% last month, we’ve seen a significant increase in new car engagement on our marketplace. https://t.co/NWLpyJ1j2W
Our Retail Price Index, which is based on daily pricing analysis of circa 900,000 vehicles, revealed the average price of a used car in February was £14,096: a YoY increase of 6.6%. https://t.co/HrAEkAqpOV
From May 1st admin fees will be displayed on your full-page adverts. Fees will not appear in search pricing until later this year. https://t.co/ernaPgaJsL
Buyer's confidence in being able to afford their next car remains extremely high. https://t.co/ktR6FungW8
First up our Data & Insight Director @therickw shares our latest audience update. Last week audience grew 8.8% compared to the same time last year, with our marketplace seeing an average of 1.4 million users each day last week. https://t.co/fNyeiSr1AG

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