Data turns dealers into mind readers

Dealers are rarely considered oracles, but with intelligent use of data, they'll be one step closer to reading consumers' minds.

When a shopper browses an automotive website, a dealer may get some useful information from a sales lead, such as the person's name and address. But too often, that's where it stops, said Devin Daly, CEO of SpinCar, which provides virtual walk-arounds for dealers' websites. "They don't even tell you what vehicle [shoppers] were looking at," he said.

The insights can be quite precise. Smarter use of data can show how online shoppers sorted search results pages, Daly said. Systems can recognize which photos of a vehicle were clicked on, or even that the shopper looked at an SUV with 40,000 miles and sought certain attributes such as four-wheel drive.

"We think the bigger opportunity in the auto space is for folks to start to really look at individual, granular consumer data," Daly said. Thanks to the likes of Amazon and Netflix, consumers have become accustomed to "uber-personalized environments," he added. But too often, Daly said, "they go to a dealer's website and they have a completely static, nonpersonalized experience."

For example, if a shopper searched for engine size, the dealer's site could then prominently feature various vehicles' horsepower to that shopper.

Helping shoppers find the vehicle they really want is just one of the ways dealers can benefit from smart use of big data. Retailers can better manage inventory and loaner fleets. They can even learn what rivals are doing or why tactics aren't working as expected.

Of course, data can be misconstrued. With online browsing accounting for more of consumers' total shopping time, many dealers are inclined to look at a metric such as time spent on-site. But that can be misleading, said Bill Feinstein, president of Planet Honda in Union, N.J. You might think you're doing a great job of keeping shoppers engaged when they're actually getting frustrated by a lack of progress.

"What I want to do is provide really a relevant experience and a somewhat customized experience to get the consumer what they want fairly quickly," he said.

While big data can seem mysterious and new, dealers have been using it in at least a basic way for quite a while.

Early this decade, when customers came into the service drive, Feinstein said, dealership personnel could pull their data to see, for example, that the person drove 18,000 miles in the first year of a 12,000-miles-per-year lease. "So in a lot of areas, dealers are using data and just may not realize it," he said.

Some dealers are using big-data tools to keep better track of their inventory.

Holman Enterprises, a New Jersey-based group of transportation-related companies, has invested heavily in using data. Along with Holman Automotive, its dealership group with two dozen rooftops in eight states, it runs ARI, a fleet-services company that manages 1.8 million vehicles around the world for industries ranging from food to oil.

A key to the fleet-management business is a telematics device called Lynkd that tracks a vehicle's location and status. Holman is working to develop a use for it at dealerships.

Dealers would know, for example, when a vehicle's battery is low as well as exactly where it is on the lot — or anywhere — said Brian Bates, who oversees the dealership operations as CEO of Holman's consumer-services business. If customers have loaner vehicles while their cars are being serviced, the dealer can determine when the vehicle is within a few miles of the store and ensure that the customer's car is ready.

The efforts are positioning the company for transportation's evolution, Bates said.

"This fleet-management expertise will morph and move its way into that retail customer base," he said. "As the product changes and we move to more electrification or autonomous or ride-share, ride-hail … that fleet-management infrastructure is going to be a fundamental basis of support for that retail customer."

Even though Holman is still developing Lynkd for the retail business, it is taking orders from dealers.

Data can also be used to keep an eye on the competition. Sometimes that data is even hiding in plain sight.

Thinknum is a company that specializes in gathering what's "left behind when companies do business online," said Justin Zhen, the company's president.

Thinknum got its start about five years ago and soon began tracking vehicle transactions. It has a tool that can scan or scrape websites to see when VINs were added or removed from the Web pages. The general practice is known as Web crawling, but Zhen said Thinknum's system is more complex than that, as it organizes data and accounts for if a customer buys a vehicle and quickly returns it.

The company, specializing in used vehicles, can scrape data from the Web, analyze the trends and send email alerts to dealer clients — letting them know, for example, that a competitor is trying to sell more BMWs. Thinknum charges $9,600 a year for such services.

"The car market is extremely competitive, so to know that a competitor has lowered pricing or increased pricing — it's really powerful," Zhen said.

He said Thinknum tracks a few million vehicles per day in dealer inventory. But the system works only when dealers list vehicles online. "If they don't list their data on the Internet our powers are rendered useless," he said.

Feinstein, of Planet Honda, feeds data to Urban Science, and in exchange he can see where his store is winning and losing business in real time by ZIP code and by vehicle make and model, he said. He cannot identify specific customers, but he said he can spot patterns, "which certainly helps marketing."

Some dealers use such data to determine their progress toward goals from automakers, said Mark Colosimo, vice president of data and analytics for Urban Science. If a dealer expected to sell 50 vehicles during the month but sold only 30, data should illustrate whether the market softened or whether the store is behind and should consider spending more on marketing, he said.

"It's really a matter of trying to accumulate more detail as much as possible," Colosimo said.

Most dealership groups have sufficient data, but "it's what you do with it," said Holman's Bates. "I think some of the larger groups will have the wherewithal to be able to really use that data for the benefit of the customer in the long run," he said.

As auto retail evolves and the vehicle ownership model changes, savvy dealers will use data to add value for the customer and determine what they need in whichever transportation environment they fit into, Bates said.

"They're going to have access to mobility [that] we may not even think about today," he said. "We need to be able to understand what they need and then be able to provide them with a service that truly adds value for what they're paying for. It's that fundamental."

Feinstein boils down data use this way: If it can be measured, it can be improved.

"The data has always been there," Feinstein said. "What hasn't been there are the tools available to you to take concrete action with the data."