Be ready to reimagine your new normal

Over the past few months, I have heard the phrase ‘new normal’ so many times and often wondered what does that really mean?  We adapted to new ways of working; we focused even more on our employees and customers; we developed a new way to interact and most of all we did it together.

Changing behaviour at work, at home and in our social lives has created a new routine, a new normal.  We can either roll with it or reimagine it……

Consumer behaviour evolved during lockdown; digitisation of the buying journey was accelerated to meet the demand; it was the only way.  As Jeff Goldblum wisely said in Jurassic Park ‘Life finds a way’.  We have seen more dealers adapt their approach with amazing results.

We continue to hear from Richard Walker, Auto Trader’s Data & Insight Director that consumer demand remains strong, which is certainly a positive.  Our challenge right now is supply.  The eco-system that feeds stock into the marketplace has been disrupted, dealers are unable to rely on their normal sourcing options to fill their forecourts. 

This means once again dealers need to adapt and be open to new ways of working.  Just as the consumer journey transformed online, so has the wholesale experience.  With the large Auction centres continuing to run digital sales only, sourcing stock online has become a necessity.  We don’t see this position changing anytime soon.

Whilst for some it may feel more of a risk not actually seeing the metal, the risk can be reduced by using data and insight to make informed decisions.  Analysing buyer demand, current supply and days to sell will help dealers determine the suitability of that stock for their forecourt.  When stock is low, bidding competitive, and prices strong, making good choices is even more important. 

Dealers should use the data to know when to call it a day and when to feel confident to pay more.  Retail values are up year on year, dealers have done a great job at holding their nerve, so good profit is still achievable.

As many will know, Dealer Auction has been leading the digital wholesale marketplace for some time, so we are well placed to support dealers through the transformation.  The improved platform continues to see growth, with July being the strongest month year to date.

·       Number of vendors selling increased in July vs June – up 37%

·       Daily Auctions running increased in July vs June – up 15%

·       Monthly transactions increased in July vs June – up 31%

It isn’t only consumers and dealers digitising, during lockdown we have been busy implementing online stock aggregators for Manufacturers and Captive Finance companies.  Creating a closed network capability to help consolidate the provision of wholesale stock to their Franchise Dealers with a seamless cascade into the Dealer Auction open market. 

Online platforms using the latest technology, combined with powerful data and insight can bring greater efficiencies and greater profit for both vendor and buyer.  The last few months have proven what is possible, online sales have increased exponentially and will continue to do so as the industry embraces digital transformation. 

As we consider the future, the uncertainty, pressures on time, resources and costs we will see a greater need to achieve profitability.  Historically, vehicle remarketing was not deemed to be profit generating, but now more than ever it is important to sweat every asset, even the ones dealers don’t want.    

It has been amazing to see how our industry has adapted and evolved in a short space of time, especially during such challenging and difficult times.  We can expect to experience a tougher end to the year, but we will make it to the other side.  No-one knows yet what the new normal will be.  We just know it will be different.

I hope that you, your family, friends and colleagues stay safe and well.