A blog from eVA managing director Paul Humphreys
When we rolled out the eVA suite last November, none of us could have predicted the way 2020 would go. With so many challenges (and opportunities) it is fantastic to see how manufacturers and dealers have responded. The digital shift that was slowly taking place in the industry received an adrenalin shot; people have been galvanised into action and we have seen rapid adoption of the digital customer journey.
Digital retail is more important than ever
With lockdown and physical distancing requirements, dealers have found innovative ways of keeping their business operating. It has been a real privilege to work with partners who have explored digital customer interaction, found creative ways to engage with and support their community, and who have been bold and brave in the face of adversity. Many dealers continued to sell through lockdown and the use of e-commerce tools and remote selling was a great catalyst for change.
Likewise, consumers who were perhaps wedded to buying and selling big-ticket items face-to-face have become empowered through the wealth of online transactions completed over recent months and are beginning to gain the confidence to test out the automotive digital experience. As an industry, it is important that we take a hard look at how we operate and put in place the tools and processes that ensure we are supporting customers and consumers in the right way.
I know from my previous experience in the travel industry that there will always be those who value the comfort and social interaction of engaging with humans, particularly when dealing with a transaction that is complex or emotionally sensitive. But, equally, there are significant benefits to be had when it comes to providing consumers with options. It is important to present a seamless experience that takes consumers between channels without asking for information on repeat.
Trust and transparency are vital
For me, the two key principles we need to think about in the era of digital retail are trust and transparency. As an example, it was not until free returns became more commonplace that purchasing shoes and clothing online really took off. Consumers want to know that if they make the wrong decision, they can put it right with minimal hassle and little to no cost. They need to trust that the information they are getting is correct and see a transparent process to manage any issues which may arise.
Let us apply this to the part-exchange process – one of those historically complex scenarios which used to mean transactions had to take place face-to-face. Cynicism and a lack of trust on both sides meant the dealer wanted to appraise the vehicle and come up with a value, while the consumer sought out a second opinion because they thought they were being conned. This created unnecessary friction in what should be the exciting experience of buying a new car.
Add transparency to the process and that friction evaporates. Empower the consumer to appraise their own vehicle, using smart technology and data-driven insights, and everyone starts to trust the valuations. What used to be a painful experience is now quick and objective. The dealer is free to focus on the new car journey, while the consumer avoids a stress point. With an average 99.6% accuracy rating, everyone can be confident in the process.
Clearly, there is a balance to be struck. We need to ask enough questions during the appraisal that we get the information to make a robust valuation but not so many that the consumer switches off and goes elsewhere. Interestingly, we found we do not need to focus on condition, as consumers tend to under rather than over-represent their vehicle. More important are the quirks which can impact prices achieved at auction, such as a panoramic sunroof.
Online part-ex is now easier than ever
More than 50% of vehicle transactions have a part-exchange attached to them. To be both transparent and accurate in valuations, you need to see the entire value chain – what the trader pays for the vehicle, what the dealer pays, what they advertise it for and how much they actually make at the end of the process. On top of the data, you also need to have the market knowledge and understand the quirks and seasonal inputs which can make a big difference to the price achieved.
At the end of the day, we are talking about the relationship between the consumer and the retailer. Part-exchanges have the potential to cause friction. Our mission is to improve online and in-store vehicle transactions for everyone. By removing the barriers, implementing a transparent process, and enabling a frictionless experience, we create an environment in which trust is at the heart of the relationship.
I recently spoke to Cox Automotive Customer Insight and Strategy Director James Davis about this topic. You can listen to more of my thoughts here.