Big data, big opportunities
Over the past decade the world has experienced major changes, with disruptive forces impacting on every business including the sale of used vehicles.
Everything and everyone has become interconnected.
Customers have smartphones loaded with apps that let them check prices, compare service offers, read reviews and check in with friends as they examine your offers and those of your competitors.
Consumers and businesses alike research, connect and purchase online and over their smart phones without a second thought.
Digital channels – search engines, social media, classified sites, manufacturer and dealer sites, consumer review sites – are the top research sources that enable consumers to make decisions, ahead of dealer showrooms and recommendations from friends and family.
For used car buyers, classified sites are the top online source to help them buy a used car followed by social media and consumer review sites. Only every third used car buyer mentions brand or a dealer site as the premier source.
The internet has changed the power struggle between dealers and consumers. Buyers can now potentially gain the upper hand through knowledge about cars, their quality, residual value, prices applied, finance charges, availability and more frequently, the dealer’s profit margin in closing a deal. OEMs and dealerships have to adapt. The most dynamic will turn business intelligence to their advantage.
The key to growth, efficiencies and profitability will be transparency and symmetry of information, as consumers continue to apply the same approach to researching and collecting information in their search for used vehicles as they do in the new car buying process.
At the same time we are living in the era of Big Data.
Capturing mass quantities of data is the foundation of strong analytics and the initial stages of Big Data largely focus on data capture. Once you have robust, accurate data flowing in, there comes a time to make sense of it all, encouraging a shift towards data analysis and analytics solutions.
This environment forces carmakers and dealers to fundamentally change their approach to the management of used vehicle operations and inventories. While these changes involve financial investments, they hold the potential for greater returns. Dealers and manufacturers face a rapidly evolving used car market; they must evolve with it, or risk getting left behind.
It is essential for key market players including OEMs, dealers and fleet owners to monitor real-time data to understand these changes and react quickly to market dynamics.
Real-time Business Intelligence solutions such as our INDICATA platform collect, process and analyse live market data to provide insights on market dynamics including demand, supply and pricing. The automatic data collection continuously detects which cars are for sale on websites. Individual cars are automatically identified by each model specific characteristics. All information collected is stored and each car’s inventory days are counted and price history recorded.
The application of a business intelligence suite of measurement, analysis and diagnostics tools will turn data-driven insights into a competitive advantage and provide guidance to improve operational efficiencies such as:
• Improving market transparency
• Optimising used car operations
• Increasing stock turn
• Analysing, managing and reducing risks
• Monitoring & optimising dealer network performance
• Protecting residual values
• Making informed and data-driven decisions
• Increasing stock turn and efficiencies
By applying business intelligence on Big Data and datadriven insights, OEMs and dealerships will improve efficiencies in their used vehicle operations. On average, dealerships can realise:
• Increase in their stock turn by 1.7x
• 5% improvement of average price for their inventories
• Gain of 5% market share
• 16% reduction of over age vehicles stock.