By the Solera Insights team
Asked to identify their biggest challenge, nearly 50% of the 500 dealers Strategy Analytics polled in a survey commissioned by DealerSocket listed “Identifying the best places to invest marketing spend” as their No. 1 pain point. Listed at No. 2 was “Sourcing and pricing vehicles to maximize profits.”
The solution to both challenges could be buried in dealers’ own data. However, it’s a daunting task to wade through the sea of data stored in customer relationship management (CRM) and dealership management systems, extract what’s salient, overlay it with local market data, and then use it to drive dealer strategies – a process that goes beyond simply employing an inventory management tool.
That might explain why two-thirds of the dealers polled by Strategy Analytics for DealerSocket believe artificial intelligence (AI) and machine learning (ML) will be the most significant development in the next five years. Since AI/ML can take in such large quantities of data over long periods of time and, as it’s learning, take into account real-time conditions which change its predictive algorithms and results, it is an ideal tool for addressing such a task.
Actionable Insights
The right AI/ML-powered inventory management tool stitches together a customer’s story based on their shopping patterns and ownership habits. It can automatically track customer online search habits and actions, equity positions in their vehicles, and when they are most likely in the market for a vehicle. It can also use this data to tell dealers which vehicles to source, down to the trim, color, and even options. Plus, as the tool learns, the predictions will become more precise.
Stocking and pricing recommendations merely scratch the surface of what the future might hold for AI/ML-powered inventory management. Because of the tremendous amount of data involved, dealers may be able to project which cars will make the most money depending on economic or market changes. The right tool will be able to look at both historical transactional and live market data to identify a dealership’s core vehicles — or vehicles a store does well with from both a profit and turn standpoint.
An AI/ML-powered inventory management tool may also be able to automate customer follow-up communications. Based on customer data, the system will know what message to relay and when — such as a lease pull-ahead program for someone nearing the end of a lease — then help them find the right vehicle.
A Connected Experience
Key to the accuracy and speed of this predictive approach is all the data living within a single digital ecosystem. For example, a used car manager evaluating auction cars or appraising a customer’s trade needs to be able to quickly triangulate online shopping insights, customer data, and how quickly a particular make, model, color, and trim level of a vehicle turns at their dealership to make the right decisions in just seconds.
However, a recent study by Urban Science revealed that dealers spend, on average, 3.7 hours pulling data from 4.5 different tools and dashboards. Without a single digital ecosystem, dealers can waste the time and money they’re trying to save by manually bringing together that information in meaningful ways to help inform decisions. A single digital ecosystem allows AI and ML-enabled technology to combine and translate data from across several tools at once.
Within our Solera Vehicle Solutions portfolio, our industry-leading dealer brands including AutoPoint Marketing and DealerSocket offer a variety of AI/ML-enabled solutions, all integrable into the dealer’s Data Management System (DMS), providing them with a single suite of solutions working seamlessly from a single source. With AutoPoint’s Journey Marketing Platform, dealer customers can target customers wherever they are in the vehicle buying journey with targeted communications and channels. Whether a customer is in the market to purchase, or simply due for their next service appointment, AutoPoint Marketing makes it easy to retain customers and find new ones. DealerSocket’s Inventory+ and RevenueRadar tools are just two more examples of how dealers can use AI and ML to save time and money. These tools help dealerships increase operational efficiency and ensure a best-in-class experience for both dealers and their customers. For more information on how to transform your dealer technology experience, speak with an expert today.
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