What are the sticking points to fully digital retail?

The automotive retail journey is increasingly incorporating an online aspect. Whether it’s for initial research before a visit to a dealership or with the intent of making the entire purchase online, the digital marketplace plays a key role in most new vehicle purchases. Research from customer experience management (CXM) agency Merkle found that 19% of drivers in the UK want a fully virtual experience for their next car purchase, while 86% want to complete at least one step of the buying process online. Other studies highlight similar views across Europe and Asia. Daimler expects that 25% of its sales will be online by 2025.

“It’s clear that the percentage of vehicles that will be purchased online is going to grow,” asserts Peadar Walsh, Global Head of Digital Marketplaces at automotive business intelligence specialist Jato Dynamics. As more players seek to offer an end-to-end solution, gaps are becoming apparent. Walsh specifically points to aspects such as financing, insurance, extended warranty or part exchange as areas overlooked or insufficiently catered for online. 2021 data from automotive retail technology specialist iVendi suggests that one in three used car buyers in the UK will adopt warranties or other aftersales products digitally if they are offered, yet fewer than one in four dealers attempts to even do so.