Take a deep dive into the motoring industry as we look at the impact of the pandemic on the dealer community. Supported by research experts, Quadrangle, our research is independent and reliable – and delivers some interesting results!
Without mentioning MotoNovo until the interviews had finished, we asked dealers about everything from the current customer journey to finance in the dealerships. Here’s what we found out.
The here and now
Dealers recognise that their overall approach to business is reactive and led by the ‘here and now’. Possibly a weakness in the long-term, this short-term approach served many dealers well in 2020. Dealers honed in on two top priorities:
- Staying afloat
- Serving customers well
Our Chief Strategy and Marketing Officer, Jon Slater, says:
“The COVID-19 pandemic has thrown up a massive challenge to the motor retail community. I’m delighted that the overwhelming view is that business was a lot better than expected, with dealers showing their classic agility across such a broad audience. From the research, we have distilled thirteen key points from dealer feedback that summarises their experiences and views on the implications moving forward.”
Changes in the customer journey
- Dealers recognise that customer expectations of online service have accelerated ‘by a few years’.
- Click & collect or click & deliver and remote sales are increasing noticeably for some dealers. Although, lockdowns aside, they don’t think remote selling is taking off as much as expected. Their initial fear of more returns or buyers’ remorse is generally not coming true either.
- Customers are doing more research beforehand: they ask fewer questions once in the dealership and are coming in just to confirm things are as expected. Often, final decisions are being made without sight of the car. The amount of ‘selling’ dealers need to do is significantly reduced.
Changing the face of finance
- Although not requested by dealers, they’re seeing more and more self-service elements in the finance journey
- There are signs of finance competitors being very aggressive with the rates they advertise, and its working
- There are some concerns that financially savvy customers will begin to avoid dealer finance
Driving used car growth
The survey reveals three key elements that could impact the used car industry:
- Concern about spending too much on new cars with EV’s around the corner
- Worry about the future economic climate
- Moves to avoid public transport
Challenges for dealers
Our findings show that dealers haven’t developed their digital strategies to address the shift to an online car buying journey – something you could consider an essential part of dealerships recovery strategy at the moment. Visit our hub for some useful marketing tips.
Dealers are busier and stretched, but there are notable staff loses since the first lockdown. The need for a physical presence is dwindling as fast as the need for digitisation is rising.
- The traditional point of sale model is viewed as fundamental to great service and expected to remain, with digital playing a more significant complementary role
- Dealers aren’t jumping at the chance to offer home delivery on a permanent basis. There’s a link to complications and a hefty set-up process, while some dealers believe people generally want to see the vehicle or book a test drive before purchasing.
“We cannot underestimate the lasting change the last year has had on the dealer model. I do not doubt many people will want to visit showrooms when the opportunity returns, something supported by a YouGov survey that suggested 62% of people were not in favour of an entirely online car buying model.
Nevertheless, it still means that a third of people are happy to buy online and with dealers telling us showrooms visits were just to ‘confirm things’ and with less staff on hand to help, a shift to online, self-serve car buying and financing is set to become increasingly essential. Dealers need to adapt, leveraging the support and help of collaborators.”
*Interviews via phone, independent and franchised dealers, various locations, Oct – Dec 2020