Market Report September 2019
The eighth Auto Trader Market Report considers what's in store for car retailing and how we must adapt to capitalise on future opportunities and make the industry work better for all involved.
Improve the car buying process for consumers...
42%
of consumers are unlikely to carry on the process of buying a car because of the pain points they’ve experienced
33%
would have bought their car sooner if they’d had a smooth experience
... and it will improve for retailers too
Improving the car buying process for consumers, by reducing cognitive load and helping through them through the process, will mean greater financial opportunities for retailers because consumers be more likely to complete the car buying process quicker. It’s a win-win for everyone.
If c 10 million cars are currently transacted at a speed of turn of 3.4 on a car parc of 34 million, increasing the ease of buying a car will increase speed, and thereby the number of transactions. E.g. if we reduce the speed of turn from 3.4 to 3, that will equate to c. one million transactions.
Integration of data will be crucial to make sure retailers have the right stock at the right price with competitive finance options, understand what the consumer has done before and when and why they want to interact.
Invest more in digital
Retailers should invest more in their digital offering as they do their physical one. Currently only marketing is fully invested in digitally for some, but there needs to be more digital investment at every step of the dealer process.
There's a mismatch of spend
There is a mismatch between where consumers are spending their time – c.70% of which is online, vs. where retailers are spending their money – c.85% of which is offline. What’s needed is a digital rewiring at (almost) every step of the retailer process. If done well, this should be a win-win for all – yielding tangible economic benefits to retailers, as well as providing a substantially better experience for consumers.
Enable consumers to dip in and out of the process
There are 28 jobs in the car buying process, and they do these in a non-linear fashion. We need to give them the tools to dip in and out of the process and let them do the parts they want to online or offline. 
The physical aspects of car buying remain very important to most car buyers but they're ready for the online transition too
To meet the varied needs of consumers, retailers won’t all look the same. Some will be brand experience destinations which give customers an interactive adventure. Others will be specialist logistic and service centres, or easy-to-access, in town located ‘stores’ where customers can ask questions or touch and tell the car they’re interested in.
Most people still value human interaction of some kind during the process as it's a key part of building trust in the seller, and gaining confidence that they've made the right decision.
Crucially, it's the nature and length of the appointments that will change thanks to the seamless online experience, so each customer service advisor will be able to sell more cars and recognise greater revenue.
74%
wouldn't buy a car without speaking to a retailer
19.5yrs
People think it'll be nearly 20 years before new cars are bought without any human interaction at all
Not only does the car buying experience need to be seamless it needs to be more transparent
Finance options have removed some of the barriers to buying online because it's considered less risky. But prices need to be more transparent and all available finance options need to be clear so that car buyers can choose the best way to pay for a car for them, complete all the paperwork and finalise the deal from the comfort of their living room. Making the entire transaction more efficient for them and for retailers.
45%
said they would buy a new car online without seeing it in person if bought on finance deal
64%
of 18-34 year-olds would buy online with a finance deal
88%
said they would buy a new car online without seeing it in person if bought on finance deal
75%
think it's difficult to work out the actual price you'll pay for a car
Conclusions
There's no getting away from the important offline elements of the journey. There needs to be a seamless, omni-channel experience for consumers so they can choose the journey that's right for them - be it online or offline, or any combination of the two. A one-size-fits-all approach won't work, so we need to create an experience that's flexible enough and blended enough between digital and physical to cater to everybody's needs.
