COVID-19 Update: How Carvana Is Winning & Why You Should Prepare to Compete

By Desiree Homer

The global pandemic confined millions to their homes, and there isn’t a used car retailer who didn’t feel the sting of declining sales revenue. Contactless sales and service have become a new normal in recent weeks, and only those dealers able to shift and adapt to offer digital-facing and remote solutions have been able to sustain. Online retailer, Carvana was already dominating the remote car-buying strategy space before COVID-19. And recently, officials told investors that the company is not only ahead of the curve in terms of technology, but it’s also primed for a contactless new standard, with plans to expand into smaller markets.

Carvana’s Plans for Expansion

Ernie Garcia, the CEO, shared that, like most dealers during this pandemic, April saw dramatic drops in sales. But already structured to meet new demand for contactless engagement, Carvana has been able to climb out of that slump in recent weeks, and at a faster pace than most. He says, “every indication is that Carvana has outperformed the industry quite significantly.” The retailer had to make internal budget cuts and put a hold on its plans for new car vending machine construction. However, it still has growth plans in the coming weeks. Garcia says the company expects to launch in “many smaller markets” that can be managed within its current network. Dealers can expect to see Carvana in almost 73% of the U.S. market in the coming months.

Hyundai Motor America is Full Speed Ahead in Growing the Digital Dealership

Barry Ratzlaff, the Chief Customer Officer and Vice President of Retail Experience and After-Sales for Hyundai Motor America, sat down with Dave Cantin during a recent Dealer News Today podcast. Ratzlaff talks about how Hyundai has been able to recognize early on that its franchise partners would need help and support to scale the remote services capabilities. He shares that the automaker is prioritizing its efforts to help dealers reach those contactless levels of engagement, including revamping websites and sourcing available digital tools. He also believes this early jump on the digital movement is giving Hyundai a competitive advantage.

Preparing for a New Contactless Buying Normal

Some dealers have been able to make short-term adjustments to their customer engagement strategies. But not everyone is ready to move forward in an entirely contactless sales and service capacity. Retailers like CarMax and Carvana already have the framework in place to sustain and grow in this digital-only environment. At your dealership level, it’s worth taking a closer look at your contactless platform to ensure it’s sustainable for the long-term. Be mindful of key engagement points including, social distancing appointments, virtual appointments, purchase by phone or email, trade-in evaluations, home test drives, and home deliveries.

Surviving the shut down may have been the focus in recent weeks. However, it’s clear that moving forward in growth-mode and for sustainability in the future means making more long-term plans for embracing a remote, digital engagement strategy. The Carvana’s of the industry are already ahead in the contactless movement. Of course, showroom shoppers will still come. But not preparing for contactless car buying could cost you market share in the future.