Online. Virtual. Before lockdown, these were the buzzwords of the moment as more and more automotive businesses spoke about embracing the digital revolution.
Unlocking the potential in e-commerce has proven benefits and has brought increased efficiencies in other industries, so it seemed inevitable that automotive businesses would also embrace this shift in buying behaviour.
But in truth, our industry has been slow off the mark in implementing new technologies. Until recently, the notion of a consumer purchasing a car and managing the process online was impossible for most dealers, and even now it’s mostly only the largest dealer networks that have established systems in place.
With the government now laying out its plans on how to ease lockdown restrictions and jump-start the economy, this could be about to change. The ways in which dealers adapt to the ‘new normal’ way of doing business will be vital and could decide who succeeds in an unrecognisable market.
Whilst we don’t know what the immediate or long-term future looks like, it is a safe bet that social distancing will be with us for some time through either a cultural mindset shift or government mandate. Businesses and consumers will be actively encouraged to transact remotely with one another as much as possible.
However, part-exchange adds an element of complexity that other parts of the retail sector haven’t needed to overcome. Consumers are comfortable buying high-value items such as holidays or furniture online, but they are not usually trying to trade in another item in order to build the deal. In the automotive industry, part-exchange is often a key element of the negotiation but replicating this online has proved challenging.
The issue with online part-ex is that one way or another, contact must eventually be made to collect and appraise the vehicle. This will understandably raise concerns amongst business owners who want to ensure the safety of their employees and customers at all times.
Dealers can navigate this problem by providing online tools that generate an accurate valuation, making the part-exchange as smooth and transparent as possible for the consumer and ensuring that most of the details are worked out online before any contact is made.
eVA, our new valuations and appraisals platform is one example. eVA combines accurate and trustworthy vehicle valuations with a consumer-friendly and dealer-friendly appraisal tool that connects the online to in-store customer journey. Once integrated into a dealer’s website, a consumer can find their new car, appraise and value their existing car, then build that into the new deal as a part-exchange. The platform synchronises the customer journey, meaning all data is carried over the conversation can pick up where the online process ended if needed.
Such a platform brings obvious benefits. By allowing a consumer to self-appraise their vehicle online and use it as a part-exchange in their new car deal, the dealer knows they are serious about the purchase ensuring only the highest-quality leads filter through to actual physical contact. This trust-building goes both ways as the consumer will go into the dealership knowing that the details have already been worked out and they are not making an unnecessary journey.
Typically, 33% of deals fail due to a disagreement on the valuation. Such a high proportion won’t be acceptable post-lockdown due to the unnecessary physical contact it causes. Consumers looking for their next car will surely flock to those dealers that provide the ability to complete the majority, if not all, of the deal online.
Part-exchanges continue to be a core source of income for dealers, whether that be via the margin on the trade-in or in the deal it allows the dealer to stack. With the new car industry likely to face increasing volume pressures as social distancing measures affect production capacity, we anticipate that having a reliable source of quality used stock will be vital for dealers.
With many people reluctant to have physical interactions unless absolutely necessary, dealers who take the steps to cater for this in all respects – including part-ex – will rise to the top.