Leading independent auctions firm G3 Remarketing is embarking on an exciting physical and digital strategy for vendors and buyers, including investing in a new £12m remarketing facility. Joint managing director Matt Dale explains more
How would you describe the current auctions market?
Currently the market is very strong. We’ve been online-only from April because of Covid-19 and April, May, June and July were exceptionally strong months. During the lockdown period we had in excess of 1,700 online accounts created and this has really driven our web traffic.
In August, however, we have seen a slight downturn in terms of values and conversion rates and prices of vehicles are very much more sensitive to damage. Conversion rates have been around 90 to 95 per cent, but that has petered off slightly over the past few weeks as people are being a little more selective over what they’re willing to buy and what they’re prepared to spend on those vehicles.
With online-only auctions being so popular is there a future for physical auction sites or will you be a digital-only business in the future?
I think there definitely is a future for physical sites. There has been an acceleration over the past two to three years to change over to a digital-only operation by certain players, and the Covid-19 situation has again accelerated that as well.
From our position, we believe a physical auction route combined with a digital channel is very important for both vendors and buyers. We very much feel the physical and digital operation will work very well together moving forwards. Perhaps some of the larger national players have a slightly different opinion of that; from an economic perspective, physical auctions sites are expensive and there are cost savings to be had going purely digital.
However, is that beneficial to the vendors and the sellers rather than just to the operators? The jury’s still out on that. We are looking at creating the best solution for the operation – we are investing in bricks and mortar to expand our physical footprint and then bringing electronic elements into that as well.
There are buyers who want to see what they’re buying while others are happy to transact digitally aren’t there?
Pre-Covid-19, 65 per cent of our stock was sold to physical buyers in the halls, so those buyers are still in the market and want to see and touch the vehicles. There is still a pent-up demand for visiting an auction, and as soon as we feel it’s safe to open as a physical and digital entity we will do so. We are not looking at an online-only, contactless operation.
Proof of this is you’re investing in bricks and mortar with a brand-new facility.
We are. In January 2021 we will be opening a site which we believe will be the UK’s first purpose-built, independently-owned facility for nearly 20 years. It’s a big investment – £12m, 14 acres and the capacity to sell up to 50,000 vehicles a year, which also includes vehicle preparation. It’s a big change for us and we will be combining physical and digital elements within the facility. We’ll be located at the M62, M1 and A1 interchanges so there will be great access.
It’s very exciting as there’s a significant investment in technology. We’ll be one of the first in the UK to have a ‘drive-through’ AI vehicle inspection facility which can appraise a vehicle within five seconds, and that is an immense change to the way we operate currently. We’ll have multiple lanes for the auction halls, and multiple lanes for the inspections and images studio. We’re trying to make it a destination as it embraces the physical element and the digital element, and we hope it will change the way people perceive auctions and in particular independent auctions as well.
You’re also future-proofing the business with electric car charging points, presumably as you will be remarketing more electric cars in the future?
Yes, and this is a problem for auction halls and any storage facility. The site will be able to scale up to 250 independent charging points as more of these vehicles enter the market place. In terms of the future proofing element, we’ve built these premises for the next 10 to 20 years and the capacity is there and can be tapped into as and when we need to. With electric cars you can’t just stick some petrol in and then drive away! It’s all change and we have to move with the times.
Do you think this facility can change the market place?
There is still a proportion of buyers who want to touch, feel and look at the vehicles. The market has changed significantly over the past few years, and there are others who are expecting it to change further over the next three to five years. There’s always a market for a joined-up, omni-channel approach when it comes to remarketing vehicles. We feel that physical remarketing with a digital side is very much the way forwards.
In terms of changing the marketplace, in 2018 we launched a network of 30 (35 as of today) delivery and distribution hubs nationwide, and even though we have just one remarketing site at the moment, it means we’re a national player in attracting stock all around the UK and are able to sell those remotely or bring them back to our remarketing site.
This blended approach all depends on what the client wants – we’re not dictating how they should sell but we’ve got the services to be able to do that. It’s a massive leap ahead for all independent auctions and it demonstrates that all smaller auctions are evolving. If we invest in bricks and mortar and technology, there’s no reason why we can’t compete in the this marketplace. But we have to evolve.