31 Mar 2015 How carwow is disrupting the automotive industry
carwow is the UK’s first comparison website for brand new cars. Allowing users to compare the price and ratings of their desired car at local dealerships and then communicate with the dealer directly, carwow is fundamentally changing the way consumers buy cars. We caught up with carwow’s VP of Sales, John Miele, to find out more.
Q: What is carwow?
A: carwow is essentially a comparison website for new cars, aiming to support consumers through the buying process – from research to purchase. The site consists of two parts: a review and ratings section, and a comparison facility. This allows users to select their desired car, receive offers from nearby dealerships, and then compare information such as the location, price, reviews and stock held by those dealers. The platform also allows consumers to communicate with dealers, whilst remaining anonymous.
Q: So where did the idea come from?
A: It all started with our CEO James Hind. After graduating in Finance and Management from Nottingham University, James did a brief internship at a hedge fund – and hated it! So he decided to found his own company, creating Carbuzz in 2010. The initial website focused solely on providing independent car reviews. But after recognising that users wanted to buy too, the comparison section was launched in 2013 and carwow was born.
Q: carwow only launched in May last year, but it sounds like the business is growing quickly
A: Yes, the business has seen rapid growth within a short amount of time. When we first launched in May 2013, we’d established partnerships with a few dealerships for one brand and since then, we’ve gone from strength to strength. We now have multiple partner dealerships across more than 30 brands. Our growth has been supported by two funding rounds – we raised £1.3 million in February 2014. And in December 2014, we raised another £4.6m, which we will help us to expand the team, roll out above-the-line advertising campaigns and to explore new markets.
Q: The concept is obviously resonating with consumers. What changes in consumer behaviour have occurred that have made your business model so successful?
A: I think there are a number of factors. The first is the increasing role that digital is playing on all aspects of consumers’ lives, and especially on the path to purchase. The automotive industry has not been exempt from this, with many consumers conducting research into cars online. What’s interesting though, is that the offline element is still very important, especially for a big purchase like a car. In fact, the majority of our users complete their purchase offline at the dealerships and I think it’s this combination of online and offline that makes carwow so successful.
Another aspect that I think has played a part in carwow’s success is that consumers are much more pricey savvy than ever before. Consumers are used to using comparison sites to empower themselves with product reviews and pricing information, and to get the best deal. This wasn’t possible for automotive buyers before so the concept is something they’ve really embraced – we’ve saved our users more than £20 million so far.
Q: And what has the impact of this been on dealerships?
A: Dealerships are really embracing carwow. It’s providing them with highly qualified leads, which are proving to be beneficial: the service has provided our dealer partners with over £190 million worth of business from happy customers.
Q: Embracing a concept like carwow is obviously a major step change for the dealers, necessitating a new approach to communicating with customers. How have they reacted to it?
A: You’re right – it’s definitely meant that dealers have had to take a different approach as they can now communicate with consumers prior to their arrival at the dealership. Some have found this a hard shift to make so carwow has had to play more of an educational role. The majority of dealers, though, have really embraced it. They can communicate with consumers much more easily and outside of traditional opening hours, by replying to messages direct from their smartphones. And it’s made them have to focus much more on the needs of their customers.
Q: What is the number one factor that influences consumers’ purchasing decisions?
A: It’s hard to pinpoint one factor in isolation – price, stock, reviews and locations of the dealerships all play a part. An analysis of our sales to date found that price wasn’t the be all and end all. In fact, location and reviews play a huge role when car buyers are determining where to spend their hard earned money. Other factors that come into play could be due to time pressure consumers are under –it might be that users are choosing either the dealership with the most appropriate stock or buying from the dealers that respond quickest.