Three things we learnt at the Auto Trader Retailer Awards 2023

The 18th of October saw us host the 16th Auto Trader Retailer Awards, our annual celebration of the very best retailers in our industry. We were delighted to announce the winners of the 9 awards up for grabs this year, which included the all-new van and bike Retailer of the Year award.

This year’s winners and finalists really do represent some of the most innovative, forward-looking retailers in the UK today and you can find out who took home a trophy on the day right here.

But as well as celebrating success, this year’s award was full of insights into the market and retailer performance. So here are three things we learned at this year's awards.

Plenty to be confident about on the used market, but lagging new car sales are changing the car parc

Consumer confidence is on the rise

The used car market continues to remain strong, and, despite some bleak economic forecasts, this year’s used car market has outperformed 2022’s market in seven of the nine months. And September was one of the strongest months for 2023, with sales 7% ahead of last year, far ahead of supply which was up only 4%.

This strong market is partly due to improving consumer confidence, with the GfK Consumer Confidence rating rising by 28 points since September last year.

We’re also seeing increasing confidence from car buyers on Auto Trader with nine in ten users on our platform stating they’re either more or at least as confident in being able to afford their car than they were a year ago, which is the highest this number’s been since March 2022, with three in four buyers planning to buy in the next six months.

But the new car market is seeing some struggles, with a softening in demand from consumers, with fleet sales being the predominant driver of growth in this market. We’ve also seen supply outstrip demand on our marketplace.

New car fleet sales have overtaken private sales in 203

All this is leading to a return to manufacturer offers and pre-reg sales which will ultimately put pressure on the used market.

Sticking with new car sales, the drop in used car sales we saw in the last few years continues to impact the used market. The ripple effect of this dearth of new car sales now means that we can expect to see 29% fewer three to five-year-old cars now on the market. When compared to the peak year of 2019, that deficit jumps to almost 40%.

2025 will be very similar, which means that retailers traditionally specialising in three to five-year-old cars will need to adjust strategies and think about different, less familiar forecourt profiles.

Improvements in customer experience, but sales are being missed

We once again conducted our industry-leading mystery shopping programme which saw us mystery shop the top 1000 retailers on Auto Trader as determined by their performance data. The programme saw retailers scored on their email and telephone responses and be put through a full audit of their digital presence to ascertain if buyers felt confident in buying or reserving a car purely based on their digital forecourt.

We saw improvements in both the email and telephone phase in terms of overall scoring but the mystery shopping programme did pick out areas for improvement in both these phases.

The programme showed that a significant proportion of enquiries were not responded to, with 20.4% of emails going unanswered. In the real world, this could mean one in five potential sales are missed. And remember this is by our top 1000 retailers. So it almost goes without saying but don’t take the risk of ignoring a possible sale.

Data capture and customer qualification saw some of the lowest scores within the phone phase, with many retailers failing to identify customer requirements and capture data vital for following up with a potential buyer. Making sure you get this information is something that separates the good retailers from the great ones.

The digital audit once again saw an improvement in performance, with our mystery shoppers highlighting improvements in advert quality and the confidence they found in customer reviews, with 91.7% of retailers in the programme having a review score of over 4.1. This only goes to show the impact reviews have on consumer confidence.

We also saw rapid response rates with 70% of shoppers receiving a response on the same day. In this modern world most people now expect this speed of response so make sure your response times are optimised to meet the demands of the modern consumer.

But there were areas for improvements with our shoppers calling out the lack of vehicle videos, and poor spelling and grammar on adverts, with 60% of assessed adverts having at least one spelling or grammar error. The devil really is in the detail.

The EV market is on the rise

We know that the EV market has been anything but smooth this last year. The new EV market has seen a slowdown, with supply outstripping demand and many retailers felt the impact of falling EV prices on used vehicles over the last year.

But these price reductions have been welcomed by consumers looking to take their first step on their electric journey since used EVs have become more affordable than ever, with some models now cheaper than their ICE equivalents.

Used EV demand now ahead of supply, with market health on the rise

And this improving affordability combined with lower ownership costs is drawing more consumers towards purchasing a used EV. In fact, we’ve seen demand for used EVs on Auto Trader hitting record levels in the last few months as more consumers look to make the switch to electric at an affordable price point. In fact, we revealed at the awards that demand is now far outstripping supply and EVs have had the strongest market health of any fuel type for the last month.

And this hasn’t changed with the recent delay on the 2030 ban on the sale of new petrol and diesel vehicles. In fact, we’ve seen demand remain stable since the announcement, so near term at least, future demand looks set to continue.

We also reiterated that the Prime Minister didn’t change the ZEV mandate, which comes into force next year and requires 22% of every brand’s registrations to be electric or face hefty fines​. So the number of EVs coming into the market is going to be pretty much the same. So now really isn’t the time to take your foot off the pedal when it comes to EVs.

Despite politicians changing deadlines and misinformed media stories, EVs really are the future of our industry and it's important that we all come together to help make a sustainable electric future for all.