A richer experience – the wholesale market gets a digital makeover 

Le Etta Pearce: “It’s been a fascinating few years for the motor industry, with the dynamic shifting in favour of the customer. Consumer demand has pushed the retail marketplace online, and dealers have had to be agile and adaptable to a newly competitive market.

“Until the pandemic, the wholesale market was trailing behind its retail counterpart. Auction halls were the first point of call for most dealers, but COVID-19 has been the catalyst for drastic change. Buying remotely became the only option for dealers, and with supply getting more challenging, they’ve been reaping the rewards of increased data and insight.”

“Brexit has undeniably caused severe disruption to the sector – when consumer confidence fell after the vote in 2017, so did sales, and that’s had a knock-on effect across the market. The industry couldn’t plan, and clarity on the deal came too late in the day. But COVID-19 has clouded the last year, and it’s difficult to separate Brexit’s impact from everything else.

“The rule of origin will be the thing to watch, and its impact on OEM pricing; where COVID-19 has had the more drastic effect on supply, Brexit is likely to hit pricing hard.”

“In tough market conditions, dealers need to be buying smarter. Dealers need to use data to back up instinct, ensuring that they’re getting the right stock for their area at the right price – a ‘retail back’ methodology is crucial.

“It’s also important that they broaden their horizons and mix up stock sources as demand varies by region. Finally, cash flow is key. Flexible stock funding options are vital to having the best routes to market, while ensuring their bottom line is protected.”

“Online platforms allow dealers to view more stock, more efficiently, and at a lower cost. But true digital retailing offers an even richer experience; sales are optimised using data and analytics, with proactive decision making matching the right vehicle to the right dealer.

“Innovative technology allows for a tailored buying experience, with an understanding of stock requirements, profit margins, and local demand and supply. Of course, some dealers would still rather visit the physical halls, but there’s now much more trust and transparency in the digital buying process.”

“Looking at the marketplace, supply is only going to get more challenging. 800,000 vehicles were lost from the new car market in 2020, which will impact supply and pricing of used cars. The nearly-new market has also been limited by stagnation in the short-term rental market.

“Crucially, consumers don’t go backwards. The pace of change might slow, but the demand-led trends are here to stay. It’s important to keep the government’s Net Zero ambitions in mind too. It’s impossible to ignore AFVs, and as manufacturers shift their production towards hybrids and electrics, dealers need to be prepared to source and sell them too.”