Transparency, Immediacy Key Elements of Digital SalesBy Alejandro Enríquez | Tue, 03/16/2021 - 05:00
Q: What elements have made Mercado Libre the No. 1 online vehicle marketplace?
A: I think that beyond being one of the market leaders in e-commerce, we have been sensitive, especially in 2020, to the ups and especially the downs the sector has faced regarding sales. Last year, we accompanied dealerships on their journey to embrace digital channels. We remain the No. 1 digital vehicle marketplace, with more than 100,000 active publications, a figure that remained constant over 2020. That made us a reference not only for comparing vehicle prices but also for buying and selling used vehicles. Another advantage is that we not only support light vehicles but other categories, including commercial vehicles and motorcycles, the latter of which experienced significant growth due to the pandemic.
Growth was also driven by the solid performance of e-commerce. We focus on a quick and smooth experience. It is common for people to be afraid of digital purchasing channels but we have made the purchasing and selling experience easy and simple, including the processes of down payment for the vehicle. We were really innovative in this regard as this kind of option was not part of the digital purchasing experience. When the pandemic arrived, our 30-day down payment model proved to be really effective.
Q: How has the vehicle marketplace evolved within Mercado Libre?
A: All words related to the automotive marketplace, including vehicles, trucks and motorcycles, are among the most searched words in the platform. This segment is strategic for us. Mercado Libre has a flexible ecosystem that can be easily combined with others. As an example of a multi-ecosystem of multi-ecosystem project, we have worked with Nissan and Peugeot to launch their digital platforms, which connect with Mercado Pago, our payment platform that allows brands to have their own payment methods platforms within the Mercado Libre ecosystem. Another highlight is our focus on motorbikes, which now can be easily purchased through the Mercado Libre platform.
In 4Q20, we also organized our “Sales Festival.” Given low sales figures, brands launched unprecedented promotions and discounts in new cars, but communication channels remained limited. We brought together six brands during the festival, including Peugeot, Jaguar, Land Rover, Suzuki and Nissan, enabling a digital channel for them. Consumers had a place to compare and make the best choice depending on their needs. This is a really important element because it helped us to democratize e-commerce, giving everyone access to the vehicle they want while getting the best deal.
Q: How do Mercado Libre’s partnerships with dealerships work?
A: Eight of every 10 people start their purchasing journey online. Five years ago, the challenge was how to generate the first digital contact with customers, as they had to visit several websites. The challenge now for dealerships is to embrace the digital process and to take the sales process to the digital world, which is why we created our down payment system. We organized more than 23 webinars in 2020, with more than 4,800 people from the automotive sector. We have created partnerships with AMDA, including a digital certificate for salespeople who want to learn about digital channels, from basic to more advanced topics.
We also focused on two key topics for the sector. One is transparency, a topic to which we are really committed. Consumers are looking for transparency and at Mercado Libre, we always make sure there are enough pictures, videos, clear descriptions and sufficient technical information for the customer to make an informed decision. The second key element is immediacy; people are looking for quick responses. We use text messages within the platform so consumers can chat with the vendor. We also enabled WhatsApp features for quicker contact and clients can also make a phone call from the app.
Q: What lies at the heart of the digital sales process?
A: Dealerships must be open to learn new things and relearn others. Before the pandemic, we tried to make digital sales a complement of the traditional sales process. When the pandemic arrived and lockdowns were enforced, this focus was reversed. We now design the digital process so the sales floor acts as an extension of the digital environment.
I believe the process will continue to evolve. The first contact and the down payment will be through digital channels, such as Mercado Libre, and the deal will be closed at the dealership. With this in mind, two key elements for success are how dealerships generate that transparency and trust to the customer and how dealerships manage immediacy.
Before the pandemic, dealerships had a 9 a.m. to 5 p.m. schedule. Now, a person can purchase a vehicle just before they go to sleep and they expect someone to answer to that purchase. Another important issue is that we are used to phone calls in the automotive sector, while clients may prefer WhatsApp or messaging. Eight out of 10 sales leads are now generated through text messaging. Addressing this is key for dealerships looking to increase sales. The more immediate the response, the better the results will be.
With AMDA we created a contest at the end of 2020 called the “great digital prix,” where one of the indicators was the response time. Thanks to our new features, response time has been reduced by 50 percent among most salespeople. We will continue to support dealerships and create training programs for dealerships so everyone wins.
Q: What role does vehicle financing play within the platform?
A: Financing is really important. According to AMDA, 672 percent of new vehicle sales use financing. During the last Mexico Automotive Summit, BBVA addressed the digitalization of this element of the sales process. Financial institutions are still figuring out how to improve in this regard. Mercado Libre will continue to work with banks as financing will be essential in the customer journey. We are preparing some surprises related to financing in 2021.
Q: What will the future of vehicle sales look like?
A: Once the transparency and immediacy challenges are solved, the next step is digitizing all elements of the process, including legal procedures, financing and aftersales. If consumers buy their vehicle through Mercado Libre, they will look for a spare part or accessory there, too. Mercado Libre will introduce these elements and improve the customer journey and consolidate our market leadership. We grew 14 percent in 2020 against 2019. In a webinar we had with Google, we confirmed the automotive sector is growing in terms of online search. It grew 30 percent just in 4Q20 against 4Q19, so there is a potential market and our job is to remain the No. 1 platform in the country.
Mercado Libre is an Argentinian technological company digital marketplace founded in 1999. The company operates in 18 countries in Latin America and is already the region's e-commerce leader