Dealers to prepare for online boom as coronavirus interrupts face-to-face sales model

Online sales room are expected to receive a substantial boost from the ongoing COVID-19 pandemic, according to leading data and analytics company GlobalData.

With customers looking to limit human interactions to avoid community transmission of the virus, online or virtual sales rooms presents a new way for car dealerships to connect with customers from the comfort of their own home.

This trend has already been witnessed in China, who are a couple of months ahead of Australia in terms of managing the virus, where dealers are already moving to online platforms, according to Mike Vousden, Automotive Analyst at GlobalData.

“We are already getting an indication of change ahead by seeing how dealers are approaching sales in China, which is a few months ahead of the western world in terms of managing the outbreak. Geely, one of the country’s largest automakers, has already launched a no-contact car buying service – the disinfected vehicle is delivered to the customer and the keys are sent separately via a drone,” said Vousden.

However, Vousden has warned Australian dealers that moving to a totally online experience may not bring the intended effect, saying markets with an ingrained face-to-face sales culture, like most western countries, would struggle to adopt a faceless method.

“In the US, we are likely to see ‘halfway house’ solutions evolve, with dealers offering virtual tours of vehicles or negotiations over video calling services. In the UK, a start-up from the founder of Zoopla called Cazoo, which aims to bring the simplicity of digital retail to the used car market, managed to raise £100 million from investors in March – despite current market uncertainty.

“One of the reasons investors were attracted to Cazoo is its focus on digital sales, which is expected to be a big plus when the pandemic comes to an end.”

With an apparent car buying revolution upon us, Vousden has urged dealers to evolve with the times, saying it is inevitable that car sales will follow other segments of the sales sector where online sales continue to grow at the expense of receiving a face-to-face sales experience.

“Now more than ever, dealers must embrace new methods of selling cars to customers – especially those that allow more of the shopping and buying process to be done remotely. While we expect a relative return to normality once the pandemic passes, we also see a longer-term shift away from face-to-face sales as customers become more cautious about their interactions with others.”

Source: GlobalData: Digital vehicle sales a winner amid coronavirus pandemic, says GlobalData

7 April 2020