How Covid-19 is impacting consumer behaviour

While we may have put the brakes on large purchase decisions during the lockdown, it’s clear that now the showrooms are open, customers are feeling a bit more confident about looking for their next car again.

The pandemic has been extremely challenging for many people and businesses, but it has also driven more consumer friendly practices to the point where buyers are now expecting even more flexibility when taking that step to purchase.

Initially the Government had started urging people to head back into their offices, but at the time of writing this, the advice is to absolutely work from home if you can, and minimise non-essential travel. This could even tighten further as we head into the winter months. Either way, it’s safe to say most people are avoiding the tube, bus, train and other forms of public transport.

A personal car is probably the safest option as a method of transport right now and the used car industry is likely to see an even bigger interest than usual as we all think about making our monthly budgets stretch as far as possible.

Where customers may have previously thought about a new car at the September plate-change, the well-priced nearly new model or even slightly older models might look like better value right now.

Even more flexibility

We were all engaging with video content before Covid-19, but the level of familiarity with video conferencing, live streaming and using FaceTime and WhatsApp video calls has pushed even the most reluctant over the edge to get familiar. ‘You’re on mute’ might just be the most used saying of the year!

As a result many dealer groups are asking customers about how they want to interact for sales and service enquiries. For customers that don’t feel comfortable going into the showroom just yet and want to speak to someone directly rather than through email or live chat services, sales and service staff are making even greater use of video calls to consult with customers.

Customers are also becoming more and more familiar with signing documents digitally too, so if you’re able to offer electronic signatures and more of the buying process online, that can only be a strength right now.

According to a recent Future Consumer Index survey from Ernst and Young showed that almost one in five (17%) consumers said they were expecting to shop more online in the next one to two years.

findandfundmycar.com has seen a record few months post lockdown, with a 73% increase in online searches in July and a 214% increase in leads being generated through the online platform.

Besides necessity and convenience though, there’s a chance that ecommerce could be supported for months and years to come by some that are more anxious, a concept being borne out by people’s fears about returning to ‘normal’ life.

Some dealers are also offering click and collect services so there’s no need to leave the house at all if you don’t want to.

The next few months will all be about how flexible businesses can be to help build consumer confidence and to make the sales process work for the customer more than ever. Especially as we’re seeing an increase in local lockdowns meaning someone round the corner might not be able to visit your dealership if it’s in another county. Customers were in control of the buying process before, but I think a personalised experience that suits each individual is going to be more important than ever.

Areas of opportunity

At the start of lockdown, MotoNovo identified 4 key areas of opportunity amidst the uncertainty and I think it’s worth reiterating their predictions here:

• Social distancing may see some people switch from public transport or car sharing to using their own car.
• The lifting of lockdown and a reluctance to travel abroad could encourage UK travel.
• Altered working patterns to ease commuting and social interaction could drive interest in car usage.
• Remote working may see people move out of urban locations to areas where car ownership is more desirable.

Click here to read more about the opportunities that lie ahead on the Recovery and Reinvention hub!

We continue to live with the unfolding Covid-19 drama and clearly there are twists and turns ahead. An unprecedented pandemic has been met with unprecedented levels of support for people and businesses. Perversely the fall in discretionary spending and commuting leaves some better off; sadly for some the position is more challenging. In both circumstances, the pent-up demand as people opt for personal rather than public transport is evident and finance has been very much in demand to help them.

By Tom Seymour