Online auctions starting to challenge physical auctions in UK
More accurate vehicle inspections and the convenience of bidding from the office are encouraging traders to buy online
Online sales are starting to challenge the primacy of physical auctions for fleet remarketing in the UK. All of the major auctions, which have dominated defleet sales for decades, now report significant volumes of their vehicles being acquired by online buyers.
New technology is allowing bidders to compete in real-time for the same vehicles as buyers in auction halls. Moreover, improvements in pre-sale vehicle inspection reports, including photos and video, are giving remote buyers the confidence to purchase vehicles unseen.
A sale of 1,000 Volkswagen Financial Services cars three weeks ago by BCA, the UK’s largest auction network, illustrates this changing environment. Nearly 200 trade buyers attended the event in person, while a thousand more bid via BCA Online.
Online convenience saves time and expands choice
Both the time efficiency of bidding without travelling, and the opportunity to choose from a wider selection of stock by buying vehicles anywhere in the country, make online bidding attractive to traders.
Aston Barclay ensures that all vehicles offered in its physical sales are also available to buy through its real-time online auctions.
“Digital marketing via smart phones has been at the heart of our business growth strategy for the last 16 months and it’s paying off,” said Neil Hodson, Aston Barclay’s chief executive officer. “17% of all online bids now coming from our mobile bidders.”
It’s a similar story at Shoreham Vehicle Auctions, where Tim Spencer, commercial vehicle sales manager, said, “national buyers are logging in online and buying around 30% of our stock.”
Images and videos reassure buyers
G3 Remarketing attributes a 30% year-on-year increase in vehicles sold online to the firm’s investment in the creation of retail-like standards for buyers. The auction firm provides HD images as well as internal and external 360-degree videos for all vehicles that pass through its auction to provide quality assurances for online buyers.
Matt Dale, G3 joint director, said, “At the start of 2018 we embarked upon a new customer service drive, particularly for the buyers who engage in our auctions online. The goal was to heighten confidence in the quality of vehicles we have on offer, without anyone needing to attend a physical sale to see the vehicles for themselves.”
Online only marketplace
If this twin approach of simultaneous physical and online sales seems a bit ‘belt and braces’, last month auction giant Cox Automotive, parent of Manheim, went a step farther when it announced a partnership with Auto Trader to create an online-only digital marketplace. Called Dealer Auction, the new business will add ex-fleet and ex-lease cars to the marketplace alongside ‘data metrics’ to help buyers with their decisions.
Martin Forbes, chief executive officer of Cox Automotive in the UK, said, “The next five years will see an unprecedented level of change in our industry, driven by the ever-increasing influence of digital.”
Dealer Auction aims to deliver a complete solution for both vendors and buyers, including vehicle logistics, inspections, images and refurbishment, as well as the option of funding.
Trevor Mather, chief executive officer of Auto Trader, said, “The way in which vehicles currently move around the UK automotive ecosystem is overly complex and inefficient, and Auto Trader has the digital and data assets that can make it a quicker, more convenient and cheaper process for all parties.”
Future for physical auctions
Before anyone writes the obituary of the physical auction, however, it’s important to remember that the majority of defleeted cars are still sold through physical auctions, and that buyers still value highly the chance to inspect vehicles in the flesh. Moreover, as Alex Miles, buyer services manager at G3 Remarketing, said, each physical auction presents an opportunity to network with the trade and see what competitors are buying.