Manufacturers Re-Thinking Dealer Integration

                                      An Avalanche Of Data


The automotive industry is increasingly becoming aware of the value of its data. There are 88 million vehicle purchases globally each year, with many more additional consumers visiting but never making a purchase. Each of these interactions generates data. Dealers also

accumulate data from parts and repair transactions as well as the leads that they collect from online advertising. All combined,the amount of customer data aggregated at each dealer is significant. Taken on a global scale, the amount is staggering.


But what good is all of that data? Isn’t it really an expense, just one more thing that needs to be managed and maintained? Until recently, many people thought mostly of the expense side of storing and organizing data and not of the true value contained within the data. Thanks to the birth of more powerful software systems, cheaper storage and new ways of viewing data, it is no longer an exaggeration to say that data is the new currency. If we stick with the idea that data = money, then data definitely has a tangible value. Data can tell the OEMs and dealers a great deal about consumer preferences, supply and demand and how to accelerate all retail transactions.


Turning Data Into Tangible Results

As the auto industry’s modernization of its data infrastructure accelerates, new opportunities are emerging. Hundreds of new software companies are entering the dealer space, offering greatly advanced opportunities for customer engagement, streamlining and integrating processes and cross-pollinating the dealerships with retail software ideas gleaned from other industries.


Unfortunately,some of these initiatives are being hampered by legacy business processes. OEMs have typically been wary of the emergence and adoption new dealer systems. The more traditional view has been that more dealer systems add more layers of complexity, thus increasing costs and making integrations more difficult.


Light At The End Of The Tunnel


All of this turbulence is increasing pressure on the OEMs. The dealers clearly need better and more tightly integrated software solutions and consumers are becoming increasingly frustrated with the antiquated business systems in place at many dealerships. It is becoming very difficult for consumers to understand why the purchase of a $30,00-$100,00 vehicle involves a less pleasant buying experience than buying clothing or a dishwasher.


Fortunately, help is on the way. New software companies are gaining ground, thanks to greater dealer acceptance. In addition, many new DSPs are now being funded by capital investment firms. One example in the United States is RPM Ventures, which focuses on providing funding to startup DSPs.


With dealers and consumers clamoring for better solutions and outside investors recognizing the huge opportunities in the retail automotive arena, we can expect the status quo to undergo some seismic shifts in the near future.


Increasingly, the OEMs are seeing that the opening of the software marketplace, along with new solutions to efficiently integrate all of these new systems, is resulting in lower prices due to increased competition. As with all things in this industry, no one wants to be the last to the party, and the race is on for the OEMs that can recognize and capitalize on these opportunities to transform the retail experience.



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