Consumer behaviour has been transformed by the pandemic. James Fairclough, chief executive of AA Cars, looks at the feasibility of online commerce in the UK car market.
Online sales made up less than a fifth (19.6%) of the UK’s retail sales before COVID-19 arrived on our shores.1 At the height of lockdown, one in three of every Pound spent by British shoppers was online. While the figure has eased back from its high watermark, online shopping still accounts for well over a quarter (28.1%) of all retail sales.
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Many of the reservations people once had about making purchases online, such as not being home to accept a delivery and the inconvenience of returns, have largely disappeared. Widespread working from home and greater ease of returning unwanted items have encouraged people to buy ever more items online.
It’s not just clothing, food and technology that are powering the boom in online sales. Bigger household items, from sofas to spa baths, are frequently being bought by people who’ve neither seen nor sat on, them in the flesh. The shift in customer behaviour is significant and is increasingly spreading to the motor industry too.
We are seeing dealers increasingly offer delivery services on the AA Cars platform. Many of them changed their operations in a matter of weeks during the first lockdown, rushing to accommodate the needs of buyers who required a new vehicle when they were not allowed to visit forecourts.
Click and collect and delivery services were always destined to become more widespread over time, but the change has been accelerated by the pandemic. These services are also now here to stay.
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By GlobalDataIt means that buying a car online has become much more widely accepted. An AA Cars poll of nearly 19,000 drivers found that nearly one in ten (8%) had bought, or considered buying, a used car without seeing it in person first during the pandemic3.
The experience must have been positive for the majority of them, as 84% of drivers who have bought a second-hand car unseen said they would do so again.
Despite these figures, nearly half (47%) of drivers still said they would never buy a used car without seeing it in person first3. In other words, for millions of drivers buying entirely online is still a step too far.
Our findings confirm that the option of visiting a forecourt is still highly important for many drivers and that having the choice to do so is vital.
This desire to see what you are buying is not unique to the car industry. Footfall on our high streets may be lighter than it once was, but nearly three-quarters of all purchases are still made in person. Shoppers clearly value the chance to see and touch what they’re buying before deciding.
Some people regard the viewing experience as being even more important with used cars, when no two are exactly alike, with varying mileage and levels of wear and tear.
However, we don’t have to see in-person car sales as being in direct competition with online selling. Increasingly, the two options go hand in hand.
In one scenario for buying a used car, a driver could shortlist cars they are interested in online. They may then visit the forecourts, see the cars in person and test drive a few. They could then go home, discuss the various options with their family, weigh up the pros and cons and then order their chosen car online to be delivered to their home.
In this increasingly common scenario, the in-person visit is critical to the decision-making process, even if the final transaction is completed virtually.
What we as an industry need to keep offering is choice. Drivers appreciate having lots of information about a car at their fingertips, they like video walkthroughs and they value being able to compare and contrast cars online.
But the majority also like to see the vehicle in person. They still want to try before they buy. And many also enjoy and appreciate talking to a dealer, whether that is to discuss extras they can include in their purchase, like warranties and practical items like floor mats, or even to get an expert opinion on the relative merits of different vehicles.
As more and more drivers buy an EV for the first time, the advice dealers can offer may prove invaluable in building consumer confidence in these cars, especially those bought second-hand. And by extension, those dealers who can talk knowledgeably about EVs to customers are likely to have the upper hand when it comes to securing a sale.
There’s no denying that people have a greater appetite than ever before to buy online, and the pandemic has accelerated the trend. But drivers also want a choice of options. And as an industry, we should continue to ensure that they have them.
