New functionality
The new strategy involves promoting updated functionality on Cars.com that aims to provide more contextual, personalized information to shoppers. This includes content such as “a guide for the EV curious” aimed at people exploring electric vehicle options. The brand is also developing artificial intelligence tools to smartly reply to queries such as “show me the best family-friendly SUVs.” The goal is to “actually have our site respond to you and generate content and choice around that selection in an intuitive way,” said Chief Product Officer Matthew Crawford.
Cars.com is also integrating vehicle financing options for the first time to “be able to compare different offers from different banks and different lenders to ensure that you’re getting the best option for you,” he said.
The brand has also bolstered functionality that allows users to research trade-in value for their used cars. “We’ve made it really easy for consumers in a few clicks to get a real guaranteed value associated with a vehicle that a retailer is offering them,” Crawford said. This upgrade was made possible by last year’s $65 million acquisition Accu-Trade, which provides appraisal and valuation data.
Competing against Carvana
The investments come as Cars.com enjoys business momentum that included a more than doubling of first-quarter net income, to $11.5 million, accompanied by a 5.6% uptick in revenue, to $167.1 million. It reported 164.8 million site visits, up 11% year-over-year.
According to Comscore data shared with Ad Age, Cars.com had 18.4 million unique visitors in April, which beat AutoTrader (17 million) and CarGurus.com (10.1 million)—and was well above Carvana, whose April site visits fell to 5.5 million, compared with about 8.2 million a year earlier.
Cars.com is among some of the older car marketplaces that “were challenged pretty heavily by the Carvanas of the world—but Carvana and Vroom and the others are really struggling now and through all that AutoTrader and Cars.com and their counterparts are still going strong,” said Peter M. Zollman, founder of AIM Group, which covers the classified advertising business, including the online auto marketplace industry.
Carvana surged during the height of the pandemic, as more buyers turned to online buying with dealerships shuttered. But it later became mired in debt as it was hurt by slumping used car prices and rising interest rates. Carvana enjoyed a glimmer of good news in the wake of its first-quarter financial report that beat expectations, prompting Piper Sandler & Co. analyst Alexander Potter to declare in a note to investors that it is “coming back from the brink,” as reported by Bloomberg.
Carvana, known for its car vending machines, this week debuted a summer ad campaign “celebrating five-star reviews left by happy customers.”
