An update from our CEO
As always, I trust that you, your family, and colleagues are well. I hope that you manage to take a well-earned break over the summer after what has been an extremely busy year, and before what will hopefully be a busy and productive September trading period.
It has been a while since I shared with you our views as the market continues to shift and change. Inflation is high and the cost of living is increasing for everyone, impacting both spending decisions and confidence levels. There is no doubt that the market has softened since 2021, but it remains in robust health relative to historic norms, due to restricted supply and many people that would have changed their vehicle in the past two years but haven’t. Many retailers I talk to are being entrepreneurial in their approach and doing better than they would in more ordinary times.
Despite the market pressures, we’re still seeing 1.4 million unique buyers visit each day¹ and while site visits in July were down 8% in comparison to the dizzying heights of 2021, they were up 15% on 2019 – a more normal “pre-pandemic” trading period². Similarly, if we look at speed of sale, the average days to sell for a vehicle listed on Auto Trader is trending at 33 days, which is well ahead of the average of 37 days before the pandemic. If you’re not seeing these levels of performance, then please do get in touch with your account manager. We understand every retailer is unique, but we are here as a partner to help make your business as successful as it possibly can be.
Likewise, whilst price growth is softening year-on-year, it’s still up a huge 42.1% on pre-pandemic levels and 19.5% on last year³. Our automotive retail price data now powers the UK inflation data for the UK government, and we continue to encourage all Retailers to be both retail and data led in their approach to pricing, rather than responding to pricing speculation or editorial opinion.
Find your focus
Last time I was in touch I talked to the need for retailers to re-focus and re-group on the key things that would make them successful, summarised in these 6 focus areas:
Be brilliant at the basics – focus on your digital forecourt as closely as your physical forecourt
Optimise days to sell – adjust your sourcing and pricing strategy
Extend your reach – be where the buyers are
Maximise the margin opportunity on each vehicle
Make the most of all the tools available to you
Stay on top of the latest market movements
You can find more information and recommendations on each one here.
We’ve been working on how to help individual retailers identify which of these 6 steps represents the biggest opportunity for them to drive trading performance. Our latest Focus Finder tool can identify exactly that for you and your business. As well as our usual insight tools, fortnightly webinars and social channels, this new offering will help you find your specific focus in around 15 minutes with one of our team. It could be the most effective 15 minutes you spend this month, so request your Focus Finder review here. They have access to the full power of Auto Trader’s data and insight to help identify where you might focus to maximise your individual sales and profit performance. In the few short weeks we’ve been trialling this service, over 500 retailers have already taken part. The feedback has been so positive that we now want to open this up to all retailers to take part.
Leading with data
Last year when we added AT Connect to advertising packages our goal was to give the industry insight that was real-time and based on data, not opinion. We want to enable you to make better decisions, faster, which is in both of our interests. We have now enabled this real-time data exchange which customers are telling us is reducing laborious re-keying and improving margin through better capturing spec in valuations. See how this has already proved a game-changer for MSC Motors and Parkway Volkswagen.
I hear time and time again that the data we are providing is incredibly valuable. We could of course charge for this, and for our very best data we do, but we want all customers to feel that with Auto Trader you get more than just the UK’s largest buying audience, you get data, insight and advice that you can’t get anywhere else. I truly believe that a diligent focus on this will be particularly important in the months ahead, especially given the new opportunities and challenges we face together:
Electric Vehicles – we’re in new territory where retail market pricing data is the only measure available at scale and so surfacing our live retail market data is essential.
Vehicle Specification – the well documented semi-conductor challenges mean extras on vehicles are less clear today than they have been in the past. We are securing access to and sharing manufacturer build data to avoid mispricing and mis-leading ads.
Changes in forecourt profile – many retailers have had to change their stock mix which means historic data sets and rules-of-thumb no longer hold, so the wealth of data we can offer, including VIN Spec, Market Health, Retail Rating and live retail market pricing data can complement your judgement allowing you to confidently retail a broad mix of stock.
These are all challenges that we are taking up on behalf of our retailers and we will keep you updated on how we can support you to serve buyers well and maximise margin. It is your success that drives our business. When you do well, we do well. That is why we are totally committed to providing the support you need.
In the last month we’re delighted to have awarded those retailers who have been consistently recognised by their customers for providing an outstanding customer experience and have been highly rated on Auto Trader. I love seeing the reactions as the winners have shared their success, and you can follow along on Twitter and Instagram with the hashtag #ATHighlyRated2022.
Data sources
1. Auto Trader internal data, 1 May – 31 July 2022 vs the same period in 2019.
2. Auto Trader Internal data
3. Auto Trader Retail Price Index, July 2022