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Opinion: Why Cazoo failed and what the car industry can learn from its downfall

Sponsored post: First Response digital marketer Richard Pygott reflects on Cazoo’s downfall and says there are lessons for the industry

Time 7:58 am, June 11, 2024

In March, Cazoo announced that it was exiting the used car market, closing all its sites, selling off its remaining stock and shedding thousands of jobs to take on the likes of Auto Trader.

Then on May 8, Cazoo Group filed with the courts to place some of its UK subsidiaries into administration.

While I don’t know what form Cazoo will take in the future, it’s pretty clear it is in serious trouble.

The impending doom of Cazoo had been prophesied by many in the motor trade for quite a while, including myself in this column quite some time ago.

Cinch, which many would point to as its main competitor, announced losses of £181m at the beginning of the year, too.

Cazoo wasn’t the first company to attempt to go all digital with the car-buying public either.

Tesco thought it could sell cars and cucumbers to customers in 2011 with Tesco Cars, but that folded in less than a year because it couldn’t sell enough stock.

So, if people are buying more and more products and services online, especially with the pandemic only accelerating this trend, why are companies such as Cazoo shutting down or losing millions?

While Cazoo boasted an easy-to-use website and streamlined processes, I personally think it over-relied on technology and seriously overlooked the importance of touch and a personal service that most customers still want.

I also think that most of these online disruptors made the mistake of assuming that customers want digitisation on everything it can be applied to.

Yet, I don’t believe that customer behaviour changes as quickly as technology.

But rather than gloating over its demise, especially considering the number of job losses, the motor trade should focus on what Cazoo did right.

It had a website that was very easy for customers to use, where searching and inquiring about cars for sale was simple.

It also excelled at the logistics side of its business, which also made it easy for customers to arrange delivery of their new car.

Some of this isn’t new to the motor trade. A lot of dealers during the national lockdowns adopted a similar model, and I think it should still be a service that dealers offer to customers.

Streamlining your dealership’s website, offering a simple-to-arrange click and collect and car delivery service, improving your face-to-face customer’s journey and making it as simple as possible for the customer will have countless benefits for your customers and your dealership’s bottom line.

To find out how we can support your dealership and simplify processes for dealing with sub-prime finance customers, visit our website or give us a call on 0115 671 1755.

This column appears in the current edition of Car Dealer – issue 195 – along with news, reviews, features and much more! Read and download it for FREE here.

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Car Dealer has been covering the motor trade since 2008 as both a print and digital publication. In 2020 the title went fully digital and now provides daily motoring updates on this website for the car industry. A digital magazine is published once a month.

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