UK auto dealerships are keeping the welfare of their staff and customers as a top priority as they manage the challenges caused by the COVID-19 pandemic.
Aiming to set the stage for where automotive dealerships find themselves at the present time, Asset Finance International sat down with James Tew (pictured above), chief executive officer at digital motor retailing and finance solutions provider iVendi.
He explained: “I think most people are trying to use a degree of common sense. Dealers and lenders are constantly re-evaluating the situation. It doesn’t appear that showrooms will be open for business until June at the earliest and that will only happen based on the Government’s new threat level alert system. However, the picture is now becoming a little clearer for the ‘click and collect’ model and that may be widely adopted.
“We’ve built a dashboard that gives us a good degree of insight across the UK landscape, measuring marketplace activity, dealer websites, showroom systems and credit checks and, over the last few weeks, there has been a gradual increase in business. At their worst, online finance applications were 75% down but, as of 11 May, they are now running at only 25% below the norm.”
Part of iVendi’s service offering includes CONVERT, a plug-in solution for dealer websites that manages an end-to-end finance journey, eligibility checking, and the ability to take an online payment to reserve a vehicle. Tew said: “When comparing numbers of people using the solution to earlier in the year, we are now seeing increased conversion rates, so it is fair to assume that dealer web site visitors are more likely to be buyers than just casual browsers.”
What are you seeing dealers struggling most with at the present time?
“The uncertainty of the future. When will they be allowed to fully open? What will future retailing look like? What will be the demand for vehicles? The furlough support has been welcomed across all businesses but it can’t continue forever and will ultimately come at high cost to the tax payer. Planning how to bring back staff is difficult within the trade with the uncertainty of sales. Deferment of taxes such as VAT and PAYE all needs to be paid back, so again good financial planning is key.
“Creating an interim home delivery solution comes with plenty of challenges and having the necessary infrastructure in place. Those that have moved to this model will certainly be able to compete head-on with the likes of Cazoo, and there’s no doubt in my mind that the pandemic has accelerated many plans of this type. Dealers are having to think quickly about changing their physical and digital infrastructures to cater for the return.
“The dealer website will be the shop window for how the trade is going to serve customers moving forward. It is the only effective way of providing assurance to potential customers that they can purchase from a safe environment.
“Preparing for more of the administration to be completed away from dealership will also be key. This includes enabling online payments for reservations, the ability to view and finalise the transaction details, complete finance applications with real-time decision-making, and manage various aspects of compliance. All of this will improve the level of service and operational efficiency and, in so doing, will actually lower the cost of managing the transaction.”
Is there not a case to be made for that level of online service to be in place regardless of a virus pinning down the industry?
“Absolutely, I think it appeals to a lot of consumers, especially as we see the percentage of the car buying journey shifting to online rising quickly. However, we are left with the fact that some people still like to physically engage with the vehicle - although you could argue that the consumer wouldn’t need to do a test drive because we would be entering the realms of ‘distance selling’ where a consumer would have the right to hand the car back.
“The pandemic is driving a huge change in behaviour and will accelerate adoption of all things digital. We’ve already seen a huge increase in the use of live video both on a personal basis and in business to carry out meetings. This has quickly become an accepted way of life over the past eight weeks. Similar things are happening in dealerships.”
If a dealership had implemented this level of online service, do you think they would be faring better than a dealer who hadn’t taken those steps?
“In my opinion, they would because they can focus on the changes they need to make to cater for the crisis. Those that haven’t planned are going to need to build a digital journey in addition to marrying it up with a new operational process. They will also have a reliance on third parties, many of whom will no doubt have been affected by the crisis.
“In terms of online service, keys areas to consider are those aspects of the sale that should be able to take place away from the dealership. You don’t need the showroom to manage the trade-in value, financing, sale of value added products. Other paperwork should also be able to be generated remotely and, if legacy IT systems are preventing this, then that would be a real concern.
“Dealerships unfortunately haven’t typically been geared up to work remotely but I think a certain amount of their workforce can work from home for the foreseeable future with an element of staff rotation to minimise the issues of effective social distancing. We are hearing of plenty of dealers where staff are taking service bookings and managing sales enquiries at home.”
According to Tew, iVendi has been impacted by the pandemic, “We have taken a proactive approach by making contact with all our customers and assisting where we can. We’ve operated an advanced working from home policy since the business started 10 years ago, so that has been a benefit.”
In support of its customer base, iVendi has launched its second product of the year, TRANSACT, and expects the third, ENGAGE, to be ready in a couple of weeks.
TRANSACT is software that enables dealers to construct a deal from any form of lead enquiry, manage the negotiation and send it back to the customer who can then interact with it and purchase the vehicle. The customer can opt to finance the vehicle and receive an instant decision from the lender inside their account area. From the retailer and consumer perspectives, the whole process can be done from a mobile phone, making it perfectly suited for the current lockdown environment.
In contrast, ENGAGE is a plug-in, context-based search engine tool for dealer websites. The consumer simply types in what they want and it will undertake a context-based relevance search. Built around finance, the lender’s products are positioned against the vehicle and the consumer can use the payment search function to select the deal they want.
For example, if a consumer wants a small economical car, five-seater, in black, they have a £1,000 deposit and want to pay £180 a month, they can enter these criteria and receive a range of finance options on a range of vehicles.