Question time with our CEO

Our CEO Nathan Coe joined our latest webinar to answer your questions and share our plans for 2022. Carry on reading to find out what he had to say.

Nathan: It appears we are finally seeing signs of emerging from what has been an incredibly difficult two years. But, whilst we should hopefully be starting to see some sense of normality returning, retailers should not return to the way things were and should continue with the digital best practices that have seen them through the pandemic. Those that shift back to the way it was will miss out on opportunities.

Two things that aren’t going to change are the market conditions, with demand continuing to far outstrip supply allowing prices to remain strong, and Auto Trader’s commitment to our partners. Our teams are dedicated to helping retailers grow their business and enabling any retailer to become digital retailers, enabling them to sell more vehicles faster and increase their profits.

“Why are packages changing”

Nathan: Retailers will have recently been made aware of changes to their advertising packages with us and I wanted to share why these changes are happening.

We’re bringing more value than ever before to our retailers with our audience of car buyers having increased by 15%, increasing the number of buyers now looking at retailers’ stock.

The latest update sees the addition of Auto Trader Connect to almost all retailer packages. This solution enables retailers to get access to real-time data including our class leading taxonomy, making stock management easier and simpler and ultimately helping retailers to achieve a faster stock turn, eliminate stock management inefficiencies by allowing retailers to manage stock on one place and ultimately increase their margins.

We’re also doubling down on our investment in marketing, to draw more buyers to retailers’ adverts, and into building tools to enable retailers to bring more of their car buying process online, opening up a new pool of buyers to retailers.

For these reasons we have adjusted retailer’s packages and our teams are of course on hand to talk you through the changes and answer any questions you may have.

“What changes have we seen in consumer behaviour”

Nathan: The way our customers have operated collectively over the past 24 months has been nothing short of exceptional, but the last thing anyone should do is revert back to a lower level of performance. The market won’t be this good forever so its critical to maintain the learnings from the last two years and for retailers to put their foot down and continue to capitalise on the current market conditions.

More buyers are now doing their car buying research online than ever before. We’ve seen this in our data and it is a key factor in why our audience is growing. But whether they buy online on Auto Trader is secondary, what’s important is that buyer are now making their purchase decision online. You are winning or losing your sale online. It’s crucial then that your digital presence is optimised to enable potential buyers to make an informed decision from your adverts.

Provided the right experience and vast majority of consumers will buy their next car online and this trend will only continue to grow. This means that retailers now have a wider pool of potential buyers. More and more used cars will be sold online and those that aren’t are decided on online.

“What are you most proud of that Auto Trader has delivered over the last 12 months”

Nathan: One of the things I am most proud of is that we’re now helping more customers than ever before, with our data showing that we are delivering a better return on investment for our partners than ever before.

We’ve also seen more car buyers on our marketplace than ever before, with a 15% increase in our audience and engagement last year. This is down to some of our team’s great initiatives including our latest marketing campaign but it’s also indicative of the shift in consumer behaviour.

I’m also proud of the steps we’ve taken in product development, launching all new products designed to help retailers on their digital journey. Last year we launched Retailer Stores, Instant Offer, Guaranteed Part Exchange with more to come this year such as the enabling reservations online.

I also take great pride in the investments we’ve made in the tools and data needed to ensure we are giving retailers everything they need to be successful in the market. Some examples include our free to attend webinars and Market Insight tool developments.

“What can retailers expect from 2022?”

Nathan: For retailers in 2022, I would say that the thing to get certainty about is their sourcing strategy. If you can get certainty in how many cars you can source, you can work back using a data lead approach to work out how many cars you should be selling and what your target stock turn should be.

Looking at the overall market, demand is likely to outstrip supply for at least the first six months of the year. This means that prices will remain strong.

It’s important that retailers start to look the market on a month to month basis. Looking back to last year, demand was so strong that we can’t possibly expect the same levels of growth this year so shouldn’t be comparing year-on-year. Specifically, retailers need to focus on the Market Health month on month which our metric for the balance of supply and demand. You can keep track of the Market Health on both a regional and national level using our Market Insight tool.

Overall, the good trading environment we’ve seen in used cars will continue for the rest of the year.

The thing that will change is new car supply, with the consensus among many of the manufacturers that the supply shortages will start to ease in the second half of the year. As these new cars start to ease into the market the knock-on effect will be that we start to see used car supply improve, with part-exchanges, ex-fleet etc vehicles entering the market.

Now there is of course a small chance that the “bubble” could burst but based on what I see the supply will be gradual as we won’t see a massive influx of new cars hitting the market. This just reinforces the need for retailers to be guided by market data.

But I would say though that, with 124 million pounds of profit potential in the market, retailers should be chasing this profit right now as fast as they can.

 

“What can retailer expect from Auto Trader in 2022”

Nathan: To keep it snappy, more of the same I some ways. Retailers can expect us to be as committed to our partnership as we have been through the tough times and that is all about us focussing on helping retailers increase their profit. This may mean we suggest a paid product but most of the time the changes don’t require a paid product, and, in all cases, the sole goal is getting more profit for retailers

Some may question why we are then rising prices, but this is so that we can invest in the tools and services that can increase retailers’ profit by more than any rise.

This year will also see the full rollout of Auto Trader Connect. This really is the data that can power better decision making and increase efficiency across the industry. When we look at the way the industry operates a lack of digital audience and data forces retailers and manufacturers to make blunt decision like a discount or pre-reg deal. By putting the right data in the industry hands i.e. accurate valuations and descriptions will lead to better decisions and a more profitable industry.

And finally, what retailers should be aware of is that we are absolutely committed to building the tools that they need to be able to sell on Auto Trader and to sell digitally on their own forecourt. Enabling any retailer to be an online retailer is a huge focus for us in the year ahead.

You can watch the full webinar with Nathan by clicking here