13th November 2024
NEC Birmingham

Online won’t replace dealers, but more digitisation is essential


Shifting car-buying entirely into the online arena is so incredibly complex that dealers will be around for a long time to come, but increased digitisation is essential if the sector is to meet consumer expectations.

That’s according to iVendi CEO James Tew who will present findings from its first ever research report as part of its Best Practice session at this year’s Automotive Management Live.

Tew will explore some of the challenges online retailing faces as well as solutions and options during his session at the event which takes place on 8 November at Birmingham NEC.

Whilst investment from dealer groups and manufacturers into online retailing increases, moving the entire process to the virtual world is unlikely due to a number of factors. It includes consumer desire to see and try out the car to ensure it fits their lifestyle, unclear new car pricing since OEM discounts and finance allowances means the on-the-road price is rarely the price paid, the requirement for more than one source of finance provision, evaluating the trade-in vehicle and the sale of add-ons.

Commented Tew: “The role of the dealer is still part and parcel of the transaction and any technical solution will have to cater for all these scenarios and many more. The vast majority of car sales will see consumers utilising online and visiting the showroom simply because buying a car is such a complex and highly involved process.

“Through our dealer council we have seen a number of innovations such as digital document signing, it’s very convenient, but the consumer doesn’t go into the showroom so the opportunity to sell point of sale products like paint protection disappears. That’s a serious hit when dealer margins are so low that making £400 on add-on products is crucial.

“Most online channels only offer funding from the OEM, but funding from the principle lender accounts for 50-60% of sales, but what about the other 40-50% who use secondary lenders? Having the OEM’s finance as the single lender in an online retail business model does not reflect reality.”

Almost seven out of ten of iVendi’s survey respondents thought automotive lagged behind other sectors in online retailing. By comparison, most of the car buyers questioned said their first port of call when making their next vehicle purchase would be at a dealer.

Even in a purely online purchase scenario, more than a quarter (26%) said the dealer was still essential whilst 49% said the network was ‘nice to have’. Less than 4% thought the dealer was not necessary. A massive 87.2% thought it was important to visit the showroom as part of the car buying process.

However, Tew warned dealers need to increase digitisation: “Consumers want to see the vehicle, but the process is very inconvenient for them and that needs to be addressed. Online is aiding the sales process and we see its role continuing and developing. We need to look at each component and how it can be digitised.”

AM’s one-day event also includes an exhibition hall with 80+ industry suppliers, seven other best practice sessions, expert speakers on stage in the AM ‘insight theatre’ and the opportunity to network. Free for dealer and manufacturer delegates to attend,  places can be booked by visiting our registration page

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