Motus, the definitive leader in anywhere workforce solutions, today released its new report, A Shift in Service Delivery: On-Demand Services Shape 2021. The report examines how digital retail channels have gained traction in the auto industry since the onset of the COVID-19 pandemic. According to the findings, 80% of consumers prefer hybrid or online shopping when it comes to purchasing, maintaining and insuring their vehicles, as they’ve found extensive time and financial savings when compared to traditional in-person experiences.
“The pandemic continues to affect the way we learn, live and work,” said Ken Robinson, Market Research Manager for Motus. “On-demand goods and service delivery has evolved beyond necessity and convenience to help us navigate the world mid-pandemic and beyond. People are discovering ways to foster a better work/life balance and make the most of their time off-line. As consumers increasingly are favoring digital channels, brands need to adapt to offering online and hybrid digital experiences.”
According to the report, as consumers shift their shopping mindset from brick and mortar to digital options, the market will continue to see waves in the way on-demand services are delivered. For instance, in 2020, goods bought online grew by 24% globally, while store-based sales declined by 7%. As a result, it’s no surprise that an estimated 17% of goods will be bought online in 2021, nearly doubling from 2016. This shift has already significantly impacted online car buying and leasing, the way vehicle maintenance is delivered and the way insurance is shopped for and utilized.
Online Car Buying and Leasing
This report found that in 2020, nearly 30% of U.S. new car sales were completed online – a 20% increase over pre-pandemic vehicle purchases made digitally. Additionally, Motus found that taking at least a hybrid approach to the buying process through a digital experience can shorten transaction times by as much as 75%. Consumers that utilized a hybrid or online-only method to car buying saved nearly three hours researching and shopping for vehicles during the pandemic. Rodo, a platform that helps consumers buy or lease cars online, indicates it only takes users two hours from signup to purchase a vehicle using their service.
Vehicle Maintenance Delivered Direct to Consumers
Motus found that consumers are not only willing to purchase and lease cars online, but they’re also managing vehicle maintenance and upkeep through digital platforms. On-demand services, such as YourMechanic, have reduced wait times by an average of 1.3 to 2.7 days when compared to two-week backlogs at traditional maintenance shops, leading to increased customer safety and satisfaction. The report also found that mobile mechanics can pass along savings (up to 30%) on overhead that a physical shop would traditionally charge for.
Online Insurance Shopping and Claims
According to the report, in 2020 consumer usage of digital auto insurance claims tools increased by nearly 20% over the previous three years. This was a result of drivers searching for ways to save on auto insurance premiums. Options such as pay-as-you-go or pay-per-mile insurance help policyholders control costs based on how much they drive, and demand for this model is expected to surge as more consumers discover the flexibility and cost-savings it provides. According to Motus, this is especially true for people driving less than 500 miles per month.
Additional findings from this report include:
- Despite pre-pandemic apprehension, 74% of new car shoppers and 71% of used car shoppers say they are satisfied with their online car buying experience. That’s up from 62% and 60% the year before.
- The ease of on-demand vehicle maintenance servicing also leads to more effective preventative maintenance, often reducing repair costs over the long run.
- In 2020, the auto insurance industry returned $18 billion in auto insurance premiums to customers who have driven significantly less miles since the beginning of the pandemic. This represents approximately 7% of total industry premiums.