The planned acquisition of Epsilon by Publicis ($4.4 billion) and the earlier purchase of Acxiom by Interpublic Group ($2.3 billion) signal that data, including dealership customer data, will become the auto industry's new oil.
The consolidation of big data within ad agencies with deep relationships with vehicle producers is now clear. Vehicle buyer data combined with vehicle data and telemetry will change how retailers communicate with customers.
Dealerships traditionally have held a unique position within the product distribution network designed around the movement of physical goods. Auto retailers relate directly with customers daily and are the face-to-face representatives of vehicle brands.
Over the last 125 years, franchised dealerships have adapted multiple times against various threats by upgrading their facilities, creating the F&I profit center, updating management systems and digitizing sales and service customer records.
The emerging issue now? How do retail entities maintain their unique front role with consumers if they are not part of the larger communications and analytics networks aimed directly at their existing customer base?
Strategically, dealerships must make themselves part of these new data ecosystems by defining a new role and then demonstrating the ability to continually sharpen brand images in a mobility world. The first step will be seeking new franchised agreements with their distributor partners about data usage and assuring their own access to customer analytics.
Dealerships and their linked distributors must commit jointly to find potential new mobility services that neither alone can achieve.
Time is of the essence.
The new partnerships must beat some formidable new players at the top of the franchised system. In addition to the new Publicis and Interpublic Group, major data aggregators such as Google, Amazon and Facebook mine these massive consumer data pools for their own benefit.
Existing franchised agreements do not address what is needed in a new bargain of shared and leveraged big data mined for the benefit of both the dealerships and the distributor.
Dealerships must also create trusted new data partnerships with third parties to get access to the insight and analytic skills they do not have. Retailers will need trusted partners to mine data that will help them discover services for any vehicle-sharing public.
It is time for dealership owners and the National Automobile Dealers Association to demand that the franchisers and distributors collect, combine and share customer analytics from all their new sources. Innovating on new insights is what retailers can do best, if given the opportunity.
Dealerships will either be part of that data network solution -- or part of history.