AutoTrader assembles car-shopping powerhouse
LAS VEGAS -- AutoTrader.com Inc. CEO Chip Perry has rapidly created a car-shopping behemoth. It helps 30 million consumers research vehicles every month and helps dealers sell to those consumers.
Recently, AutoTrader acquired Kelley Blue Book, HomeNet Automotive, vAuto and VinSolutions, and is integrating and bundling their software and communications systems. That will give those subsidiaries potentially greater reach among AutoTrader's dealer clientele.
Perry spoke during the National Automobile Dealers Association convention here with Staff Reporter Mark Rechtin.
Q: What do these acquisitions mean for AutoTrader?
A: It represents a powerful combination of media companies, with leading-edge software tools to become much more efficient in the way dealers attract shoppers, manage their inventories and convert prospects into customers. We are making significant investments.
Retail car shoppers identify most with AutoTrader and KBB. What's next for that union?
The next big thing is a powerful new- and used-car site inside KBB to reach the several million people who are close to buying a car. We have learned that the classified-ad searcher inside KBB is much different than the one inside AutoTrader. The overlap is very small, maybe 20 percent. But between the two, we attract 70 percent of in-market shoppers.
The KBB classified site will create a new way for individual dealers to make the choice if they want their inventory listed on KBB as well as AutoTrader. So it's a subset.
We're also bringing Trade-In Marketplace from AutoTrader to KBB. About 70 percent of KBB's audience is looking up the value of their trade-in. Now we can get them an instant offer from a dealer.
What will vAuto bring to the party?
They have created a new inventory-stocking tool called Provision, which utilizes a deep understanding of the demand profile for consumers on the AutoTrader site.
VAuto and VinSolutions also will have a single sign-on, so the customer has more convenient access to more software tools.
AutoTrader is helping them scale their infrastructure to absorb the growth. Recently, there were 51,000 simultaneous users on their VinSolutions system at dealerships -- booking deals, managing their Web sites and serving customers through CRM.
HomeNet is the leading inventory management software system. We are using it to enhance AutoTrader's inventory system, to provide much faster updates on our Web site.
Dealers have had one-day turnarounds. Now we have one-hour turnarounds of pricing and vehicle information.
So you bundle all this up. How do dealers benefit?
These technical advancements have opened tremendous opportunities for dealerships to become more efficient. We are bringing dealers and manufacturers far more sophisticated behavioral targeting. We can use the combined behaviors [of the five Web sites] to bring new insights to dealers about how people are shopping and what the true consideration sets are for cars at different times.
Converting an Internet prospect to an actual purchase is where we're smoothing the transaction. We help shoppers find the car they want to buy, the deal they might get and what the trade-in is worth. Then we help the dealer pull tools to bring in the customer and have a deal jacket ready, so they can close the deal when the customer comes into the store.
Recent developments with TrueCar have made dealers suspicious of sharing information with third-party sites. How do you reassure them?
We are very clear with our customers on what data we are accessing and how we are using it. We have no interest in using any consumer's personally identifiable information for marketing applications at any of our companies. We protect it and encrypt it and don't leverage it outside of the dealership at all.
Our business model also is considerably different than TrueCar's. We have a subscription-based service with a monthly fee for the ads they utilize on KBB and AutoTrader. We don't need or require any of the controversial [dealership management system] information to do business with the dealerships.
We want to strike a positive balance between the consumer and dealer, which allows the consumer to be empowered with information about a car, and let dealers provide information in a way that fits their business model.
What sector of your business would you like to grow?
On the new-car side, many shoppers want to see where cars are actually for sale. Only one-third of AutoTrader dealers are using our new-car inventory tools. They should make their inventories visible to in-market car shoppers.
Is AutoTrader thinking about going public?
We are a private company and we don't speculate on those kinds of things. We're well funded. That would not be a reason for an IPO.
You can reach Mark Rechtin at email@example.com. -- Follow Mark on