How much do you know about the online used car industry? Perhaps if you’ve bought or sold a vehicle in recent years then you may be reasonably clued up as to the size of it. If not, then you may be surprised to know that the global industry is expected to be worth a staggering $2,150.6 billion by 2027.
It is therefore not surprising that it has become a highly competitive and increasingly saturated marketplace as new businesses sniff out the huge potential that the industry offers. Gone are the days of travelling to your nearest dealership, looking under the bonnet of numerous cars and then presiding over prices for a few hours. Today’s consumer wants to have every option immediately laid out in front of them, be able to filter to their precise needs and have their new car delivered to their doorstep within a matter of days. Enter the growing number of online used car companies.
So, in a crowded marketplace where brand awareness and consumer loyalty is imperative to gain an advantage, what marketing platform can you turn to? For Cazoo and Cinch, two of the largest growing newcomers, that platform has been sponsorship. Since the beginning of 2020 there have been ten top-tier sports sponsorship announcements between the two. Cazoo currently has a handy lead of six (Everton FC, Aston Villa FC, The Hundred, The Rugby League World Cup, World Snooker Tour & The EFL) to Cinch’s four (Northampton Saints Rugby, Queen’s Club Championship, Tottenham Hotspur & ECB).
Supporting what those in the industry already know, it’s wonderful to see that both Cazoo and Cinch have put in large sums of money into a marketing platform that they firmly believe can put their names in front of their target audience. Not only is this great news for the rights holders and teams they are supporting, but it stimulates competitors into having to do, or at the minimum consider, sponsorship as a route to stand shoulder-to-shoulder with their adversaries.
Is it plausible we’re going to see more and more online used car companies enter into significant sponsorships? Absolutely. The likes of Vroom, Carwow, CarGurus, motors.co.uk, and Auto Trader will all be working out their next move right now. Sponsorship quite often goes through phases of saturation from a certain industry, and ironically it is the demise of one of these that might see the likes of the aforementioned online car companies placed in the headlights.
As we covered last year, the increasing pressure on government’s from around the world to stamp down on betting sponsorships continues to pick up pace. For an industry that has branding on shirts of half of the Premier League clubs, nearly three quarters of Championship clubs, and was the second largest global sponsorship spender behind sportswear in 2019, the impact could be massive.
During a period of time when professional sports teams are struggling financially due to the impacts of COVID-19, the loss of income from betting companies could be catastrophic for many. That’s why the sponsorship sector needs its next industry influx of big spenders. With great assets suddenly becoming available, and inevitably at a reduced rate due to the need to fill those spaces quickly and a vast array of them suddenly becoming available, we believe the online used car market might just step in as the saviour.
Cazoo’s two most recent partnership announcements are a reflection of just this, with the company replacing Sky Bet as the principal sponsor of the EFL, and partnering with the WST which is largely saturated with betting brands. As reported in Sport Business, Barry Hearn, chairman of the WST and Matchroom Sport, said, “When a company like Cazoo comes in, you hit two targets with the same shot. It’s a major brand that is investing heavily in UK sport sponsorship and this is the first or second stage of balancing the portfolio to have less gambling sponsors and Cazoo ticks that box.” Providing professional clubs and rights holders are able to recover and recoup any financial loss from the ban of betting partners, the sponsorship industry is venturing into an interesting period. It will provide us with insight into burgeoning business sectors, introduce us to new brands breaking into the market, and hopefully stimulate some exciting activations. The brakes may be on for gambling companies, but the foot is firmly on the accelerator for the online used car market!