James Leese, chief customer officer at Cox Automotive UK, explores why online remarketing channels will be more important than ever post-lockdown.
A vehicle, one of the hundreds of vehicles lined up for sale, passes the auctioneer’s rostrum for sale. Forty-five seconds and a flurry of bids from the packed hall later, the auctioneer strikes the gavel, the vehicle sold.
For many decades the humble motor auction has remained largely unchanged. For dealers and enthusiasts alike, a week on the road travelling from auction hall to auction hall is a regular occurrence. It’s also a necessary practice, as for many dealers it’s the main source of used stock for their forecourts.
But the coronavirus outbreak and subsequent lockdown has changed everything. For two months now auctions halls have been closed and the industry put on hold for most. But now the government has set out its plans to get people back to work and jumpstart the economy, dealers need a way to source stock whilst maintaining social distancing. This simply isn’t possible at physical auctions. The answer? Online.
Sourcing stock online is nothing new. In fact, through Manheim, dealers have been able to attend auctions virtually since the launch of Simulcast in 2004. Simulcast enables viewers to watch and hear a live feed of the physical auction, including the auctioneer. However, most existing platforms tend to be virtual representations of the physical auction. There’s absolutely a need for platforms like these, but in the absence of physical auctions, social distancing has shone a light on the need for a ‘complete’ online remarketing solution.
The demand for online remarketing channels has been on the rise for a while now. In 2018 we boldly predicted that 80% of vehicles will be sold online by 2023, and in some sectors we’re on the way to that number. Last year, 42% of LCVs at Manheim sold via an online channel, showing that commercial buyers are keen to embrace new technology.
Whilst we’re seeing slower uptake amongst car buyers, usage of online channels has been on the increase every year and it’s now a common occurrence to see two or three times the amount of people logging into a Manheim auction via Simulcast than attending in person.
The trajectory was already clear, but we now anticipate growth in online car sales will accelerate.
Sourcing stock online will be a new experience for many over the coming months, but there are inherent benefits. Dealer Auction, our joint venture with Auto Trader, is an example of a remarketing platform built solely for online. A key feature is that it provides access to accurate live market data, potentially a game-changer.
As we get back to work, the market will be understandably volatile and prices unpredictable. The beauty of live data, as opposed to relying on the usual guidebooks, is that it provides dealers with an accurate temperature check of the market at any time. Dealers will still need to use their own knowledge and instinct as always, but having that data to validate their buying will be invaluable.
Our research shows that 87% of dealers have overage stock caused by buying the wrong cars for their forecourt. A platform like Dealer Auction provides insight into the local market so dealers can make smart stocking decisions during the crucial post-lockdown period.
With 12,000+ vehicles a month available and already over 900 dealers selling on the platform, Dealer Auction proves there is an appetite for a dedicated online remarketing platform.
Physical auction isn’t going anywhere and will continue to be a vital part of our industry. For some the buzz of attending a live auction and seeing the vehicle in person will always trump sitting at a computer. We believe It’s about offering dealers the choice to sell and buy the way they want to. With physical auctions likely to be impacted for a while, coronavirus has caused a seismic shift in the way dealers have to buy and has accelerated the move to online. It remains to be seen what will happen once physical auctions can reopen, but it’s clear that online remarketing is here to stay and it’s entirely possible that the tables have turned for good.