How online sales are bringing in new customers and shifting stock faster
From survive to thrive – a successful ecommerce strategy is key to unlocking automotive retail profit in post-Covid era
22 September 2021
PARTNER FEATURE: New data released by the Automotive Transformation Group reveals that up to 80 percent of automotive ecommerce transactions come from net new customers to the business and that online sales are shifting stock 20 percent faster than traditional methods.
Conclusive proof of the intrinsic fiscal and operating benefits for auto retailers deploying a successful ecommerce strategy has been provided by new data released by the Automotive Transformation Group (ATG). Formed from the recent merger of Autofutura and GForces, ATG’s data shows that ecommerce goes far beyond just being a useful tool to help auto retailers survive through the pandemic, and now forms the bedrock of any sales strategy essential for them to thrive in delivering profitability and sustained growth tomorrow.
New customers arriving online
The data, collated in partnership with a leading UK multi-franchise auto retailer operating over 20 locations, reveals some striking statistics. Contrary to what retailers may believe, ecommerce is not just being used by their existing customers, in fact, 80 percent of ecommerce transactions were made by net new customers to the business. In addition, transactions made online resulted in vehicles being sold 20 percent faster than via traditional sales methods.
“Automotive retailers who have embraced ecommerce are now reaping the rewards and will continue to do so in the coming years. The pandemic made buying cars online a reality for many and now the genie is out of the bottle, it’s just a case of how quickly and how well the industry adapts to this demand, explains Tim Smith, chief revenue officer, Automotive Transformation Group. “A successful ecommerce strategy is now proven beyond all doubt to be essential for attracting new customers, reducing costs, moving stock faster and maximising profitability.”
Stock turn improvements
Enabling customers to make transactions online has seen the time a vehicle remains in stock fall from 38 days to as low as 31 days, significantly reducing the discount strategy a retailer needs based on its age profile, thus retaining stronger profits margins. In addition, ecommerce sales are unrestrained by geographical boundaries with the average delivery distance being 69 miles from the retailer and customers are willing to travel up to 55 miles to collect their car in 2021.
With the recent integration of a cutting-edge digital sales tool used by global corporations such as Microsoft and Siemens, the Automotive Transformation Group is now better placed than ever to serve the automotive industry. The Group’s enhanced ecommerce offering has seen the number of franchised dealers the company supports increase from 1,651 in April 2021 to 2,370 today.
“Ecommerce is a critical sales tool, not just for profitability but survivability in the automotive sector,” says Smith. “More and more customers wish to engage in a full end-to-end online car buying solution, and if a retailer is not able to facilitate that, those customers will take their business elsewhere in a heartbeat.”