10 months ago
Online motor retail is splitting up into a market of simple and complex transactions.
That’s according to connected motor retail technology company iVendi, which has highlighted an emerging trend heightened by the pandemic.
Retailers have been gravitating towards one or the other of the extremes because of the rising use of digital sales models throughout the crisis.
James Tew, iVendi chief executive, said: ‘What we are seeing are two different approaches.
‘One is paring back the act of car purchasing to what you might call the Amazon model – the customer chooses a vehicle, clicks ‘‘buy’’ and the only other choice will generally be whether to opt for some form of motor finance or not.
‘The other attempts to replicate some or all of the complexities of a traditional, showroom-based used car purchase in a digital form, with price negotiation, part-exchange valuation and a number of value-added products to consider.
‘There were probably signs that retailers were heading towards this divide before the pandemic.
‘But over the past few months the trend has become much clearer because the pressures of market conditions have created the necessity to choose.’
The simple approach was most often used by car portals that made a virtue of how easy it was to buy via their platform, while the complex transaction was more often the preserve of ‘clicks and mortar’ dealers, he added.
‘These retail experiences are really aimed at different types of buyer.
‘One is happy to make a car choice and buy entirely online with little or no physical interaction with the dealership and the whole process taking a short space of time.
‘The other is a buyer who takes a much less direct path to car purchasing and desires a proposition that is very much tailored to their particular needs.
‘They’ll probably also want to test-drive the vehicle, see their part-exchange valued and perhaps want to buy an extended warranty and paint protection.
‘Really, although some of the retailers using the simple model are volume businesses, our reading of the situation is that the complex option is much more common and in demand by a higher number of potential car buyers.’
Real advances had been made with the complex model, he commented, pointing out that iVendi’s Transact product – introduced in April and free to customers during the pandemic – had generated sales of more than £82m.
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