Video: Is your car dealership ready to operate in a world of no walk-ins?

Time 9:12 am, June 3, 2020

Dealers’ digital presence is going to be all-important in the future, warned eBay Motors Group head of external sales Marc Robinson on Car Dealer Live.

Appearing with fellow guests Dermot Kelleher, the group’s head of research, and group head Phill Jones, he told Car Dealer founder James Baggott how impressed he’d been with dealers’ entrepreneurial and innovative spirit during lockdown.

‘I think it’s been fantastic. It’s a testament to our industry as well. Without a doubt there’s been a real short-term view on readiness for this week, and it was great to see yesterday (June 1) some fantastic stories of dealers reopening. I saw some great videos across LinkedIn. But really as a dealer how you can convey your readiness to your audience – I think that’s really really important.

‘It’s also about the longer-term view in terms of how ready is your business for whatever that new normal will be? And just ensuring that you’ve got that flexible approach, because without a doubt June will probably feel very different to July, and I would just ensure that flexibility is key in terms of medium-term success.’

When it came to the longer-term view, he said dealers needed to think about how ready they were in terms of their digital presence. ‘I think the million-dollar question for me is are you ready to operate in a world of no walk-ins?’

Also during the broadcast, the trio spoke in depth about used car prices – how they were performing now and what they were likely to do in the future.

Talking about demand, Kelleher described the five phases they had seen since February, from strong demand – some 25 per cent up year on year – to a slowdown in the middle of March, more shrinkage during lockdown, a slow recovery from the end of April, at about 10 per cent below last year, then from May 10 onwards the volume of calls and emails going up substantially: visitors to its site over the past week were actually up 10 per cent on last year, while telephone leads were up by 25 per cent and email leads were up by 65 per cent.

Was this just a pause though, wondered Baggott. Kelleher replied there would definitely be push and pull factors, with reasons to be both cheerful and uncertain, including people maybe buying cars to avoid public transport but also the wider impact on the economy with the ending of furloughing.

Citing consumer confidence and new car production levels as factors, Jones said: ‘I would probably rather be a used car dealer than a new car dealer right now.’

Talking about the volatility of the market that the online classified advertising group was watching out for, he said demand could well be mixed, with people who would ordinarily have bought another new car as their lease came to an end not being able to afford another one, so moving into the used car sector. Then there were issues of supply and capacity – could reopening dealerships handle all the leads, he posited.

Spikes in demand would lead to opportunities, he said, adding: ‘If I had a load of electric cars, I suspect you could do a roaring trade in them, but there’s not enough of them, which draws people into the second choice. It’s that volatility that’s going to make the big difference.’

When extra-curricular activities kick in again for families, such as taking kids to the football or swimming, that would also mean more car use, pointed out Kelleher.

Baggott commented on the ‘disappointing’ email response rate from dealers during judging for the annual Car Dealer Used Car Awards – might that now change? Kelleher said it was inevitable that people would be doing more from their desktops and would be expecting high levels of personalised messages in return with a lot of detail in the email replies.

Jones commented: ‘Consumers very quickly get bored, and if they don’t get that reply they’re off.

‘We’re all very good at measuring sales – we’re not very good at measuring the lost sales. That is the urgency we instil in the teams. That consumer who has sent an email at 9 o’clock at night has done so for a reason. People don’t send emails to car dealers for fun, they are doing it because they’re seriously interested.

‘Marc was right – the walk-in is going to be less likely. You’ve got to hold the hand of the consumer and tug them into the dealership.’

Jones said that what worried him most about the used car market in the future was the risk of business failures, saying a number had already been on the line.

‘Used cars isn’t famous for its high profit margins, and some of these businesses carry high fixed costs, and that’s the thing that worries me.

‘It’s great to see people out there trading again and everyone’s been really sensible on the cashflow, but there’s a critical mass we need to get ourselves back to, otherwise people are just operating loss-making businesses.’

On a more optimistic note, though, he pointed out that the crisis had forced dealers to embrace change that was already coming, such as being able to take calls, emails and live chat, supporting people with contactless sales and home delivery.

‘That’s got to be the future, but people still need the car dealer. It’s not that this becomes a soulless experience. There will be some people who are confident enough, but it’s the role of the dealer to hold the hand of the consumer, make sure they’re buying the right car, give them the confidence and reassurance through that process – all the old skills that were there, but just delivering it in a format that’s fitting with the modern age.’

Robinson said dealers he was talking to were ready for this change. ‘I’m really positive. We did some research and 76 per cent of buyers were willing to buy within two to three months after lockdown.

‘My advice is be ready for that demand. And think about the value in terms of the information that the sales person can offer but might be done in a different way – it might be done over email or telephone rather than face to face.’

What would they concentrate on now back in the car dealer world? Jones’s advice was for dealers to make it a priority that their teams were trained to reassure customers over any concerns they might have – ‘put yourself in the shoes of the consumer’.

Repeating what he said earlier about dealers asking themselves whether they were ready to operate in a world of no walk-ins, Robinson added that dealers needed to ensure they had robust phone and email inquiry processes and to test them to ensure they were easy for customers to use both during the working day and out of hours.

Meanwhile, Kelleher said it was a question of having to put more thought and effort into inquiries that come their way.

See the broadcast in full by clicking on the image at the top of this story.

Used car prices going up at independent car dealers as most models increase in price, reports eBay Motors Group

Click here for the full collection of Car Dealer Live interviews

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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