Subscriptions, buying online and free home deliveries. Welcome to Post C-19 car buying?

May 22, 2020

It perhaps shouldn’t have come as a surprise when the grim April SMMT figures announced that Tesla Model 3 had topped the most sold list, given April saw the start of the new Benefit In Kind tax perks for EVs. That said, Tesla could find themselves in a continued fortuitous position. They moved to an online only sales and delivery platform last year, way before C19 reared its ugly head and the implications that now come with it.

Of course selling online is nothing new. In fact we helped Peugeot launch theirsa while back, and many car brands have been toying with it for a while. Just recently Volkswagen announced a new sales model for its electric vehicles. However a lot have faced legacy hurdles too problematic to want to tackle. Some likely focused on shorter term priorities too much. So they didn’t give a complete online sales solution the attention it deserved. However C19 has made everyone realise how vulnerable we all are, both as people and businesses. Things now need to change and ‘consuming’ has been scared into changing rapidly.

If recent research from Global Web Index is to be believed, car brands can’t continue in their pre-C19 guise. Thankfully as we’ve seen over the last eight weeks (or is it months!?) of lockdown, people and companies are exceptionally good at adapting quickly. This moment in time, if tackled correctly, could well play an important part in the modernisation of car retail.

But what really matters is what consumers are thinking and what they are likely to want from car brands moving forward. Quite understandably, people in the UK have put off big purchases during this period (67%, 15% of which is specifically to do with buying a car). Some are not intending on making their big purchase for a while longer (21% will only make that purchase when they feel C19 is over in the UK).

What’s interesting, and could be seen as an opportunity, is only 20% have said they will reduce their regular financial commitments such as subscriptions because of C19.

In addition:

– 70% of UK consumers want brands to now offer flexible payment terms

– 28% say they’ll visit stores less frequently

– 25% plan to buy more online for home delivery (with 48% expecting free home delivery)

– And 44% say brands that best meet their post C-19 needs will influence their buying decision.

When you take all those statistics into account, an ecommerce start to end sales platform can no longer be a nice to have; it’s surely a must.

What about the franchised car dealer? 

Quite simply, it doesn’t have to be an either or. Dealers can be essential to the buying process. They offer a human touch which many want, and give another route to market (should the internet decide to blow-up next let’s say). Likewise, moving forward they can also play a valuable role supporting a brand’s direct online sales, for instance; logistical and ongoing maintenance. But they need to adapt now if they are to do so.

So in summary…

Omnichannel route to market is a must. Brands must offer easy online purchase with subscription based finance and free home testing / delivery (and some form of extended returns policy), with no need for the buyer to leave their home. Dealers should look to adapt their business/traditional model to best support and benefit from this new offering.

And this really needs to happen now, not sometime in the future. Especially if brands are to try to recoup some of those lost sales, and benefit – at least in the short term – from the government’s current ‘avoid public transport’ mantra. It’s time to listen to what the customer wants.

Insights source: Global Web Index, 2020 – Release 9: multi-market research wave 3