Part 9: Updated “Automotive Insights We’ve Discovered During Covid-19 Economy” – Consumer Close Rate % Returns to Near Normal Levels

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Detroit, MI - Detroit Trading Automotive Research & Insights

Jack Lintol

President & COO at Detroit Trading


Our data scientists continue to monitor online car shopping trends and patterns. Through the Detroit Trading ClearPath™ Enterprise Platform, we’ve analyzed hundreds of millions of data points nationwide to help you better understand the state of car buying in the COVID-19 economy. This article will show you how the following three key metrics we reported two weeks ago continue to evolve: 

  1. Consumer Hand-Raiser Activity - Increasing, Above Expectations
  2. Dealer Marketing Efforts - Stable, Continued Improvement
  3. Consumer Purchase Rates - Close Rates are Increasing
As in our previous articles, we’ve graphed daily activity of these three metrics against seasonally adjusted, historic activity, which is shown as the “expected” baseline in the charts below. 

1. Consumer Hand-Raiser Activity - Increasing, Above Expectations

The increase in consumer hand-raiser activity that we discussed in previous publications continues, with the upward trend that occurred towards the end of April continuing through the beginning of May. Consumer hand-raiser activity for May is on track to exceed expectations.  
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What this means to us: Consumer online shopping activity continues to increase above historic levels, and is now exceeding expectations. 

2. Dealer Marketing Efforts - Stable, Continued Improvement

Since our last publication, we see a slight increase in the number of dealers working leads, with actual dealer activity having stabilized and slowly trending up. We believe this is due to additional state restrictions being lifted. We expect dealer marketing efforts to continue to increase over the coming weeks as more states, such as Michigan, allow dealers to re-open their showrooms, subject to social distancing limitations and other caveats.  
 
As in previous publications, our data continues to point to dramatic differences by OEM. We have seen several OEMs who previously had material declines in the number of dealers working leads increase their dealer participation dramatically in the last two weeks. Certain brands continue to maintain and/or increase the number of dealers purchasing leads, which corresponds to the brands that are experiencing the best comparative sales numbers during this time. These OEMs are using this as an opportunity to encourage their dealerships to respond to more consumer requests, maintain a steady pipeline of sales prospects and leverage that pipeline to gain customers and market share.  
 
Qualitatively, we regularly speak with dealers and automotive brands. They reinforce that the consumer interest generated online (internet leads) continues to be the most valuable marketing lifeline during this crisis. This will become especially important as certain states open showrooms based on appointment only to limit the number of consumers in a store at one time. Additionally, dealers are leveraging third party leads to make up for lost sales resulting from COVID-19 closures and restrictions placed in late March and through April.
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What this means to us: Most dealers across the country have re-opened their doors to consumers in one form or another. As dealers re-open and adjust to appointment-only showroom visits, online sales and remote transactions, they continue to increase their investment in cost-effective lead marketing activities to ensure they have a steady stream of potential consumers to contact and serve.

3. Consumer Purchase Rates - Close Rates are Increasing

Consumers are continuing to buy, with consumer close rates at the beginning of May greatly exceeding close rates from April and matching consumer close rate activity from the beginning of March (before state mandated COVID-19 “Shelter at Home” orders were issued). This increased consumer close rate activity has brought the “New Trend Line” almost back to normal.  
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What this means to us: As expected our resilient dealer community has successfully developed sales processes to adapt to state-specific COVID-19 restrictions and requirements, and those sales processes are resulting in near-normal sales close rates. Consumers also continue to take advantage of the deals OEMs are presenting and using stimulus money. It is encouraging to see the 7-day consumer purchase rates continue their trend of returning to normal.    

Analysis: Consumers Are Buying, And Dealers Are Resilient 

Online consumer hand-raiser activity is now exceeding expectations as people increasingly turn to online car shopping tools to help with vehicle research and deal navigation. This online shopping activity combined with dealers embracing online sales, facilitating remote transactions and doing whatever it takes to serve their customers is resulting in near normal close rates for third party internet leads programs. As in previous publications, it stands that those who are using this environment to invest in internet lead programs to build a book of business are out performing their competition and are making up for previous lost vehicle sales as the economy re-opens.  
 
About the Author - Jack Lintol is the President of Detroit Trading, a Detroit-based firm that is amongst the world’s foremost data and technology providers of “in-market” automotive shoppers and shopper intelligence. The firm provides data and leverages data science for original equipment manufacturers and dealers that is responsible for more than 30,000 and $1 billion in monthly car sales. Contact Jack at jack@detroittrading.com.

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