How to take your share of sales in a competitive market

In Q1 2021 we’ve seen the market contract to around 70-80% of normal sales volumes¹. Yet many retailers have reported strong performance with some even suggesting February was a record month, despite the restrictions. We explore how these customers have grown their share of sales in a competitive market.

How does a downturn in the market impact me as a retailer?

When the market contracts, supply increases and marketplaces like Auto Trader become more competitive. During these periods it would be common to see less in-market buyers and a bigger selection of vehicles, making attracting your share buyers more challenging. If you don’t take action during a downturn, it’s reasonable to assume that your sales will drop by at least the same percentage as the market.

This has been exaggerated in the current scenario where physical forecourts are closed. It’s resulted in retailers having to focus solely on their online forecourts, along with a need to adapt to a new era of digital retailing. It’s created a gulf in performance between the retailers that invested in advertising, embracing distance selling and those that waited for physical forecourts to reopen, with no real change to how they operate.

 

What can I do to maintain or recover my share of sales?  

The first thing to do is read our best practice guide on ‘How to turn today’s searches into sales’. Get your advertising into a good place, so you can convince consumers to commit to a purchase online. Once you’ve updated your current stock on Auto Trader, it’s worth looking at what you can do to take a bigger share of audience and sales online.

Stock

When sales are slower than normal, we commonly see unadvertised stock build up in the market.  Retailers are understandably apprehensive about increasing advertising spend by adding additional stock in anticipation of reduced sales. Yet this is exactly what you should do during a downturn. The more stock you have on Auto Trader, the more opportunity you have of taking your share of audience. This will in-turn increase your share of sales in today’s market and ensure you build pipeline demand as physical forecourts reopen. If you sit on the stock, you run the risk of the market shifting. This retailer behaviour is commonly associated with poor pricing and overage stock, as retailers chase the margin available when the vehicle was bought into stock.  

Prominence

If you’re still falling short of your targets having followed the best practice for all your vehicles, you need to speak to us about making your stock stand out. Investing in our prominence tools when sales are slow, can help you take audience from your competitors and increase your share of sales. We have solutions for your entire forecourt or specific problem stock, whilst promoting your business in prominent positions in search, getting you the exposure you deserve. Talk to us about your goals, we’ll review your forecourt and advise you on the best solution to plug the gap.

Will I see an uplift for my investment before forecourts reopen?

We are consistently seeing more than 60 million visits per month on Auto Trader (+4.7% YoY)² and sales performance is now at its highest level in any lockdown. It’s clear evidence that attitudes towards buying online are changing with 1 in 3 in-market buyers telling us they intend to purchase in the next 2 weeks³. Consumers are also more confident in their affordability than ever, rating it 8.75/10 in our February research⁴. We’re confident that these metrics indicate that there’s sales to be had today and set-up for tomorrow. Plus, any investment you make today will underpin a strong start when physical forecourts do reopen, with 59% of consumers who go on to buy in April, researching their next purchase in March⁵.

¹Based on Auto Trader internal data February 2020 Vs February 2021 | ²Auto Trader Internal data +4.7% traffic growth Jan 2021 Vs Jan 2020 | ³February 2021 Onsite consumer survey (1554) | ⁴February 2021 Onsite consumer survey (1142) | ⁵Auto Trader internal match data Jan 2019 - April 2019