9:08 am, February 13, 2024
Former Cinch director Jason Cranswick has revealed the biggest difficulty facing purely online car dealers as the likes of Cazoo continue to suffer heavy losses.
Appearing on the latest episode of the Car Dealer Podcast, sponsored by JATO, Cranswick said the disruptors struggle to make up for a lack of physical contact with customers.
The experienced figure, who has since moved on to Norton Way Motors, encouraged dealers to adopt a blended approach which incorporates both online and in-person connections with consumers.
Cranswick, who worked with Cinch for just over a year, told hosts James Baggott and Jon Reay: ‘I think what we’re seeing is the place that remains for the physical dealer, I think that’s what has been proven out.
‘Our strategy centres around having physical locations but you’ve also got to have the very easy ways for consumers to engage with you in the way that they want to, which might be purely digital or it might be a blend.
‘I think that is where it is a difficult one for a pure play online only retailer – you do miss that opportunity to have a physical event with the customer during the buying process, albeit every car does get physically handed over in the end.
‘You are leaving a lot for that white glove handover on the driveway and that’s then got to be incredibly powerful if its the only touchpoint you have physically with a human.’
He added: ‘I don’t think we should be talking about online sales and offline sales – it’s just sales. The reality is the consumer will choose at what point they want to come in and out.
‘Selling cars online is not the work of the devil but by the same token we would really love customers to come and touch and see us and be part of our showroom business as well. You’ve got to embrace the two.
‘A lot of the brands we are working with are moving towards more quasi-direct sales models in some areas that rely heavily on online promotion but at the same robots don’t sell cars do they?
‘Humans buy cars so we have got to still be in a human touch business but we’ve got to have ways of working and workflows that are e-commerce like because that is where you get the efficiency and the effectiveness.’
What can dealers learn from online disruptors?
Cranswick’s comments come as a spotlight continues to be shone on whether purely online car retailers can be sustainable.
Car Dealer reported last month that Cinch had posted a whopping £181m loss in 2023, even though it turned over more than £1bn.
That followed the news in December that Cazoo bosses have admitted that the company faces going under if it cannot find a solution to its own cash crisis.
Last year, Cazoo boss Jonathan Dunkley told Car Dealer that the outfit’s approach was the ‘business model of the future’.
Cranswick looks back at his time at Cinch with positivity and says the company’s way of operating has shaped the way he has worked in his current role as managing director of Norton Way Motors and COO of its parent company, Marubeni Auto Investment.
He told the podcast: ‘I’ve got great thanks and affection for the time I spent at Cinch.
‘I went there from Jardine, where I’d spent five-and-a-half years working for that business and leading many different initiatives around digital innovation and transformation.
The opportunity to go and join Cinch at the time and get it in the air was fascinating and taught me a hell of a lot about e-commerce and how you need a very joined up stack of technology to be able to take a customer through one continuous journey.
‘It taught me a huge amount a customer propensity to buy at distance. It becomes a 24/7 business. We were selling cars at midnight and we were selling cars on Christmas day, so a very low latency compared to a traditional business where there are a lot of hours when you’re closed but still carrying a fixed cost.
‘Some of the things that we’ve deployed in our businesses since then are much better inventory management, using data to inform decisions and partnering well with people like Auto Trader for market data.
‘Also, some of the areas we’ve looked at have been vehicle imagery. We have invested very heavily in turntable technology in recent years which means when you look at my cars online, they look no different to – and as good as – the competitors online. That’s the shopfront isn’t it?
‘These are the things we were focussed on in the Cinch business.
‘Also, behind the scenes, making sure we have got industrialised processes and we’ve got the vertically integrated processes that can see a car pass through all the stages of its life cycle, which were all great things which were coming out of the Cinch model at the time.’
On the podcast Reay, Baggott and Cranswick discussed the motor trade’s biggest headlines in the year so far.
Other topics up for discussion included the unfolding car finance crisis, GAP insurance and Vertu Motors’ latest share buyback scheme.
You can listen to all episodes of the Car Dealer Podcast on Spotify.
