Online motor retail dividing into simple and complex transaction models, reports iVendi
James Tew, CEO explained that increased use of digital sales models throughout the coronavirus crisis had prompted retailers to gravitate towards one or another of these extremes.
He said: “We are seeing 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 last 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 who made a virtue of the ease of buying through their platform, while the complex transaction was more often the preserve of ‘clicks and mortar’ dealers who majored on their expertise, he added.
“Our view is that these retail experiences are really aimed at different types of buyers. One is happy to make a car choice and buy entirely online with little or no physical interaction with the dealership. The other, which in our experience represents the majority, takes a less direct path to car purchasing and desires a proposition that is very much tailored to their particular needs including test drives, part exchanges, VAPs and more.
iVendi provides technology for both of these models although the solutions required for complex transactions are inevitably more sophisticated and it is here that the real advances have been made in recent times. In April, we introduced our TRANSACT product free of charge to the iVendi customer base for the duration of the pandemic. This includes something that we call a Digital Deal, a communication tool designed to replicate the subtleties of complex, face-to-face conversation.
James said: “Digital Deals have been remarkably effective over the course of the last few months and, since launch, has been used to generate sales of more than £82 million. At a time when the used car market has been volatile, figures such as these have made a real difference to many retailers.”