[|CREDIT|]

In a recent interview with Forbes Magazine, I was asked about the biggest impacts and challenges that COVID had rendered on our industry. For me, the answers were apparent. It is a clear truth that COVID has been a major accelerator of digital wholesale growth and adoption, but there’s still opportunity for improvement. Over eight months into the pandemic, more buyers and sellers are staying with digital tools, as they’ve realized the great efficiencies that can come from doing business this way. However, some dealers are still working to get comfortable online, and helping them is one of the biggest opportunities for this industry. The challenge we now face is looking at the total client experience asking ourselves: how do we digitally deliver everything a dealer gets when they physically visit at car? In short, how can we make clicking the tires come as close as possible to kicking the tires?

While this year has had its ups and its downs for everyone, I do see a lot of positive things that are going to impact our industry now and in the long term as we work to give our clients every tool, they need to conduct business in the way they want to.

Let’s start with numbers

This year saw major changes in digital usage across the industry as many auctions went to all-digital sales practically overnight. As we’ve all worked to evolve how we can safely and effectively do business both in person and online, the data has shown that more buyers and sellers than ever are still choosing to do business digitally: 

Digital Buyers have purchased 2.9M vehicles via Simulcast and digital-only channels

80% of purchases year to date have been made by a digital buyer

30% of Simulcast buyers are first-time purchasers since March 2020

45% increase in Simulcast Remote Seller usage compared to March 2020

Nearly 45% increase in offsite transactions year-over-year (as of Oct)

And while I acknowledge that not everyone likes to change, increases like these—even under the pressures we’ve all faced—demonstrate that digital is an effective way wholesale vehicle.

Getting creative with the platforms

With inventory being tight throughout the year, both increased competition and the need to stretch beyond the pre-pandemic status quo were an unexpected upshot for digital platforms. With new users doubling on online auction sites and new dealers buying digitally, the competition really increased.  As for the buying side of the tight inventory situation, many dealers began to use digital platforms as their virtual lots. Realizing that digital allows them to lower risk, dealers didn’t need to carry as many cars in their inventory–understanding that they have a way to source cars 24/7 and find the ones they know their customers will need, when they need them. At the core, digital wholesale platforms allow dealers to source and buy the right cars quickly, perhaps from a farther distance than before, without taking the inventory risk.

On the sell side, digital selling tools opened up additional options and flexibility. Many dealers were able to list vehicles as wholesale while it was still on their lot, potentially giving them an opportunity to retail that vehicle to a customer while it was simultaneously listed for wholesale. 

The road ahead 2021 and beyond

I would be remiss if I did not acknowledge that there will be some challenges moving into 2021 but I firmly believe that the opportunities outweigh the challenges.  For most dealers, there will still be a need for a digital-forward buying and selling strategies as the pandemic continues at high levels in some areas. And it will be up to each dealer on how much he or she is willing to embrace digital and use it to their advantage and transact successfully. There will also be a focus on enhancing condition reports with more high-quality photos and adding undercarriage imaging to make the experience as good or better than standing in front of the vehicle.  Additionally, evolving polices on faster, more efficient pricing and expanded real-time support and chat will be key in promoting more comfort within the digital space. The one thing that I am certain of is the resilience of the wholesale industry, no matter the challenge, wholesale auctions and our buying and selling partners will find new and creative ways to thrive.

[|CREDIT|]