Mark Standish, chief executive of MotoNovo Finance, has warned that lessons learnt during the lockdown period must not be lost, particularly the digitisation of used car retailing.
“The way forward is developing an omnichannel proposition that gives customers the option of how to buy their next car; online, offline or very possibly through a combination of each. It is a model that Cazoo has embraced as evidenced by its acquisition of Imperial Car Supermarket.”
Standish acknowledges that the opportunity of digital is not something new, noting that digital disruptors were already eating into used car sales and margins. However he believes that Covid-19 has brought the imperative to change into focus.
New entrants, such as Cazoo, identified a gap underserved by the used car market, said Standish. During lockdown, even later-adopting consumers got used to friction-free online shopping and app-based banking. Many will still value the physical retailing experience, but in major purchase items, such as used car purchasing, online is certain to play a greater role. Standish stated that consumers want control and self-serve capabilities in their car purchase and online is where much of this will take place, even if many purchases are still concluded in a showroom.
Above these, Standish sees the critical importance of developing fresh thinking about how dealerships operate. “The fact that Cazoo has sourced circa £200M in investment to address the capital cost of setting up the business infrastructure and brand building says much for the resources needed for success in used car retailing.
“For established dealers, I am struck by the potential for collaboration in today’s dynamic operating environment, especially amongst the small to mid-size independents. There are opportunities for this group to come together in ‘co-opetition’ and where it makes sense in a co-operative spirit to ensure they have the scale and digital presence to compete effectively. Distribution, finance, marketing, stocking, CRM and innovation are all areas where opportunities for collaboration are evident.
“We have seen the mutual benefits of working openly with organisations such as the IMDA and NFDA to assist their members and through over 50 dealer webinars in recent months. Together, we adapted quickly and effectively to the pandemic’s impact. A crisis can generate ingenuity; the collaboration with over 200 dealers has seen us working together to innovate successfully with the new MotoRate product. We see plenty of other opportunities and we hope to work closely with the dealer community to progress them.”