A message from our CEO, Nathan Coe
We are about to reach a significant milestone in the journey through COVID-19, when all retailers in the UK are either already back to business or have a confirmed date when they are allowed to open. None of us can be certain what the next few months will bring but the early signs are encouraging. We have seen strong demand from buyers, with audience on our site exceeding pre-COVID levels and prior year (1). The volume of leads from buyers sent to retailers has increased by 88% in the last week compared to the same week last year (2). These leads are undoubtedly converting to sales as we’ve seen record numbers of sold vehicles being removed from site (3) and received reports of good sales volumes from retailers.
Since showrooms have been allowed to open, we’ve focused all of our efforts on driving sales volumes. Our teams have delivered a number of significant initiatives over the last few months, we have:
Extended the stock offer through to 16th July – more than ever, if stock is not online, it’s not for sale
Introduced new features to highlight COVID-19 safety measures, home delivery and live video viewing to support retailers to build trust with buyers
Invested in significant marketing activity to drive consumer awareness that showrooms are open
Made Auto Trader work harder for you - removed third party banner adverts from site and improved mobile listings, driving even more response and engagement for retailers
Launched Market insight data to highlight supply, demand and pricing trends so that retailers can adapt strategies, real time
Held regular webinars to inform the industry with the support of industry experts
This week has also seen us announce our results for last year. This is a time when we would normally reflect on the previous year and look forward to the year ahead. Although, as always, we are proud of the success of our business and the contribution we make both to the UK automotive industry and the wider economy, this year is different. Last year the industry was navigating the challenges of Brexit and the uncertainty that came from regulatory and environmental challenges. These challenges remain but the events of the last 3 months have added more uncertainty and complexity for us all. Nothing is more important for our business than the sense of partnership that the last few weeks have brought to the fore with many of our customers. I’m committed to making this partnership even stronger in the future and will continue to work with the entire Auto Trader team to make that happen.
Whilst every retailer is facing a different set of circumstances, we are hearing two big concerns. The first is a concern over future price trends and the risk of a sharp decline in valuations, similar to that seen during the Global Financial crisis. Demand from buyers is at record levels, and supply is constrained, so we see little reasoning behind this risk. To the contrary, if anything we are currently seeing prices increasing slightly. Our valuations reflect observed pricing from you and other retailers, with no ‘editorial’ adjustment or overlay. As well as this data being available real-time through our pricing tools, we’re publishing it weekly and working hard to embed this data across the industry, as we have seen time and time again that when retailers combine their experience with our data, the result is quicker stock turn and better profitability.
The second concern is sourcing vehicles. The understandable delay in opening physical auctions combined with lower than usual part exchange volumes means that supply in the market is struggling to keep up with demand. This is driving retailers to consider new sourcing options and to increasingly look online. We see this on Dealer Auction who are reporting record numbers of retailers signing up to their platform. If you are looking for more sources of stock, or a cost effective disposal channel you can register your interest here.
There will be many opportunities for us to work together as we navigate the next few months and we are committed to sharing data and market information to support this. I would urge you to continue visiting our Retailer Hub where we will share this insight, share best practice from across the industry and invite experts to update on the evolving situation. We will also be running our regular webinars which have proved such a valuable resource to many in recent weeks.
As always our teams are available to help and want to work with you to ensure you are getting the most from our partnership.
Important information
Sources:
1: Auto Trader internal analysis of Google Analytics data, average number of unique users daily, 15th – 21st June 2020 vs 15th – 21st June 2019 (inclusive).
2: Auto Trader internal analysis of leads, 15th-21st June 2020 vs 15th-21st June 2019 (inclusive).
3 Auto Trader internal sold vehicle analysis based on stock removed, 7th-14th June 2020