As the tools to buy and sell used cars online continue to evolve, dealers need to get a handle on which tools and platforms best serve their market.
Success in today’s used vehicle business requires all the usual approaches: digital integration, efficiency, transparency — and a greater emphasis on the role of logistics, quick delivery, and accuracy in sourcing the right vehicles for both physical and digital channels.
Dealers that understand the benefits of building a robust online used car presence (more streamlined process, reduced drive time spent buying/sourcing vehicles), must first focus
on getting good quality inventory.
To do this, they will need to invest time understanding the specific digital channels they use for their buying, according to Braeden Kardash, Digital Sales Manager at Manheim Canada.
“Make sure you purchase from a reputable auction with the proper arbitration and inspection processes in place,” says Kardash. “Do your homework, carefully study the condition report, Carproof, disclosures, and ensure the vehicles you are bidding on qualify for the necessary inspection/arbitration. This will allow you to buy online with confidence and minimize any post-sale issues you may have.”
Attracting potential retail customers
Dealers are getting much better at marketing and promoting their used vehicle inventory on their websites, with more photos and better descriptions. But because 80 per cent of used car buyers do their shopping from third-party sites, dealers also need to ensure their vehicles are listed on at least one or more of these platforms, says Kardash. It’s an area that, like gathering vehicle inventory online, requires a good amount of research.
Trevor Henderson, Chief Operating Officer at ADESA Canada, suggests considering questions like: What type of vehicle should be remarketed through which channel? Who is the audience? And should you recondition the vehicle and conduct pre-sale inspections?
“As a dealer, you really do need to be aware of what these tools are and their capabilities,” says Henderson. “But more than that, you have to be willing to get educated on how to use them within your own business context. It’s not a one-size fits all.”
He adds that there are “multiple tools, multiple platforms, and multiple strategies” to consider. As a result, dealers need to take the time to think about how they plan on putting everything together to make it work for them — “for your segment of the business, for the types of vehicles that you sell and/or buy, to reach the buyers for your vehicle, to ultimately stock your lot with the vehicles that your retail customers are looking for,” says Henderson.
Understanding these questions — your audience, along with the digital tools and channels for remarketing — all require data and analytics. Dealers need to measure all forms of digital efforts and really understand what they want to measure. And there are enough analytics out there to offer good insights.
The details of selling online
Selling used cars online also means ensuring a few simple points are adhered to. For example:
Reputation is foundational in the remarketing business because dealers need to be seen as an entity that represents their vehicles accurately, says Henderson. It needs to be crafted correctly.
Vehicle listings, descriptions and images all need to be clear and concise. Capturing high resolution images and tagging vehicle history reports to the vehicle (digitally) are equally important because they need to paint a “true story” for the car.
Mobile is an obvious but important one. “Our industry is now dependent on speed and efficiency because these are expensive assets, and it’s critical that we give our clients the ability to interact and transact with us from the palm of our hand,” says Henderson.
Dealers are getting much better at marketing and promoting their used vehicle inventory on their websites, with more photos and better descriptions.
Cole Reiken, Vice President of Digital Strategy and Product Management at Canadian Black Book, advises dealers to not overlook the importance of video and the “virtual test-drive” of that video in their merchandising efforts. (For example, YouTube has an app that allows users to do a virtual walkaround and “test drive” a vehicle.)
Reiken says the demand for used vehicles in Canada is strong and has been for the last 12 months, based on the number of searches that take place from CBB for used vehicles.
However, a changing economic landscape due in part to the North American Free Trade Agreement (NAFTA) renegotiations, imposed tariffs and new legislation could impact the market.
“I think it will be very interesting to see how things move forward, depending on what happens from an interest rate and economic perspective, as well as for vehicle supply,” says Reiken.
He also advises dealers to measure everything. “Whatever your digital efforts are, make sure you’re measuring them — and make sure you understand how you want to measure them,” says Reiken. “When the consumer walks into the dealership, (you need to) understand where that consumer came from, (and) which websites they used to do their research before leading them to the store.”
