Four lessons from the digital disruptors

Retail has had to accelerate its digitisation thanks to the pandemic. Auto Retail Live brought together some experts who have been at the forefront of the trend since before lockdowns and Zoom meetings became the norm.

Neil Smith, formerly operations director at Imperial Cars and Cazoo, joined Rockar founder Simon Dixon and Darren Preddy, dealer sales director at Rapid RTC. These are the lessons to be learned from the disruptors.

1. Vehicle prep is even more vital

“Instead of having a 45-minute test drive, the customer is getting seven or 14 days to test drive that vehicle with a no quibble return,” says Neil Smith. “A lot of the returns will be dictated by how well that business prepares those vehicles because it will not only be about ‘It’s not the right car’, it’ll be about ‘It’s not up to the consumer’s expectations.’

“If you want to ensure you reduce your returns to the minimum, you’re going have to look at how you’re preparing your vehicles.”

2. Test drive demand is declining

“Test drives have been declining since we started using the data back in 2015,” says Simon Dixon at Rockar. “What I believe the industry is very, very good at is enforcing test drive as a part of the sales process. When you listen to customers, customers don’t want to test drive, they’re almost being forced to do something in a process that they don’t want to do.”

3. Email engagement up, and social media rising

“Pre-lockdown we were seeing about 1% of our traffic coming from email engagement,” says Simon Dixon. “Today we see anywhere between 15 and 20% of our traffic on average coming from that type of engagement. You can’t over communicate with the customer if it’s relevant content.”

Social media is on the rise, too, says Darren Preddy: “We’ve had interestingly, over the last couple of months, quite a bit of interest from Facebook, and handling inquiries from Facebook. So particularly Marketplace and Messenger that seems to be what increasing. But it’s quite complex in terms of what you need to do to invest in social to get the returns from it. So, I think it’s early days, but I think it certainly will be coming.

4. Disrupters are noisy but not to be ignored

“I think right now and probably for the foreseeable short term, there is an advantage [in clicks and bricks],” says Simon Dixon. “Those customers who want that hybrid model are not going to be Cazoo customers. These disruptors have come in and they have shaken up the market whether we like it or not.”

Even though they are currently only targeting about 10% of the market when you factor in the number of customers willing to conduct the whole process online, online retailers should be ignored at your peril, says Simon Dixon.

“What they’re doing is they’re normalising a way of buying cars. When you take out their advertising budget their cost to transact is significantly lower than the traditional model,” he says.

“The industry does not want there to be a Woolworths or an HMV moment where we didn’t wake up to something that was happening and transforming and changing a sector.”