Online motor retail is dividing into a market of simple and complex transactions in an emerging trend, heightened by the COVID-19 pandemic, reports iVendi.

The company said increased use of digital sales models throughout the Coronavirus crisis has prompted retailers to gravitate towards one or the other.

James Tew, chief executive at iVendi, said one approach is the 'Amazon model', where the customer chooses the vehicle, clicks ‘buy’ and the other choice will be whether to opt for some form of motor finance.

The other replicates some or all the complexities of a showroom-based used car purchase in a digital format, such as price negotiation and part exchange valuation.

Tew said: “There were probably signs that retailers were heading towards this divide before the pandemic but, over the last few months, the trend has become much clearer because the pressures of market conditions have created the necessity to choose.”

The simple approach was used more by car portals who made a virtue of the ease of buying through their platform, while the complex transaction was more often used by ‘clicks and mortar’ dealers, said Tew.

He said: “These retail experiences are really aimed at different types of buyer. One is happy to make a car choice and buy entirely online with little or no physical interaction with the dealership and the whole process taking a short space of time.

“The other is a buyer who takes a much less direct path to car purchasing and desires a proposition that is very much tailored to their particular needs. They’ll probably also want to test drive the vehicle, see their part exchange valued and perhaps want to buy an extended warranty and paint protection.

“Although some of the retailers using the simple model are volume businesses, our reading of the situation is that the complex option is much more common and in demand by a higher number of potential car buyers.”

iVendi said the effectiveness of the technology behind the simple model is based on the expertise of the implementation.

Tew said: “The product itself is relatively straightforward but it is in the consultative approach required to make it work at maximum effectiveness that the value lies, especially around motor finance. It’s a question of knowhow. The real advances have been made in the complex model.”

In April, iVendi introduced the TRANSACT platform to its customer base for the duration of the pandemic.

During the first 10 days of the start of the new lockdown measures in England, on November 5, iVendi reported 33% growth in the number of ‘digital deals’ sent by car, van and motorcycle retailers via the platform. 

Since its launch, TRANSACT has been used to generate sales of over £82 million, said Tew.