Connected Data: The engine that powers better results
Thursday August 11, 2022
By Ben Flusberg
SVP, Data Solutions
The Automotive industry is changing at breakneck speed. This includes a dizzying array of new vehicles being offered, many from completely new OEMs. A radical shift to electrification, and a steady and pronounced shift to more digital interactions are being felt throughout the entire industry.
Consumers expect brands to understand them more than ever, giving them personalized products and services. They’re willing to share more about themselves if it makes their shopping process faster and easier. Dealer profitability pools are shifting, and they need partners who can help them make better business decisions. Manufacturers need an accurate, wholistic and real-time view of the industry and automotive trends that help them build their brand as well as strong partnerships with their franchise dealers.
As a greater number of transactions happen digitally every day, information on consumer buying behavior, automotive lending, auction transactions, retail vehicle sales, and more is being generated in a digital format. Smart players are taking advantage of this new opportunity, using data and advanced tools to craft next generation strategies rather than simply relying on instincts.
Not all data is created equal
In the first part of our ongoing series on data intelligence, we’ll focus on the underlying data foundation. Everyone claims to have lots of data. But what data is valuable? What data generates actionable insights that help you make better business decisions?
To answer those questions, we need to look at three key characteristics of data:
- the data’s depth
- its timeliness
- and the data’s breadth and connectivity
Cox Automotive’s array of solutions that serve customers across the automotive industry provide us with data that’s deep, timely, and connected – in other words, highly valuable data. This data is the foundation for DRiVEQ, our dynamic data intelligence engine that produces unparalleled insights for our customers and powers Cox Automotive’s solutions.
Data Depth and Timeliness: What Does It Mean?
If a certain dataset contains sale prices for 60% of U.S. vehicle transactions, that’s a lot more useful for predicting vehicle values than a similar dataset that only covers 10% of that market. That’s what we mean by depth — the greater a dataset’s coverage, the better it is at making specific predictions.
How frequently data is collected also has a big impact on the predictions that become possible. For example, real-time consumer website shopping activity provides much more relevant and timely insights than vehicle registration records that are updated every one to two months.
Our end-to-end solutions pick up over 24 billion online interactions every year, reaching every corner of the vehicle lifecycle, from manufacturing and wholesaling to shopping, retailing and ownership. And in each one of these domains, the data is both deep and near real-time. For example, our data covers:
- 80% of all wholesale demand through Manheim Market Report (MMR) valuation look-ups1
- 63% of retail car shoppers as they research, discover, price, and start the buying process on trusted sites like Autotrader and KBB.com2
- 48%+ of U.S. franchise dealer website activity through sites operated by Dealer.com3
- Over 50% of all automotive credit applications processed through the Dealertrack credit application platform4
Deep data coverage in each of these domains is a critical component of our data intelligence capabilities, making our insights trustworthy and reliable. But there’s something else that’s even more important and even more unique when we talk about the value of data.
Breadth of data, and the connections between them, is where the magic happens.
When finding the right vendors to work with, seek out data that has not only depth, but breadth. An expansive portfolio translates to expansive data –– not just in one part of the consumer journey or vehicle lifecycle –– but throughout it all, from beginning to end. To simplify things, we think of our data in three, highly overlapping categories: consumer data, vehicle data, and market data. Not only do we have deep intelligence in each of these areas, but we’re able to connect the dots between them to yield entirely new insights that otherwise wouldn’t be possible. So instead of relying on one point on the page, we can see the full picture.
For example, from even before consumers enter the market to when they buy, service, and buy again, we understand how they want to shop and own their cars, as well as how these preferences change over time. In addition, we see how vehicle values change from the initial new car sale, through trade-ins and wholesale transactions, to a subsequent used car sale. And we also track vehicle condition, along with service and repair costs, through each stage of its lifecycle.
By connecting our consumer, vehicle, and market data, we gain a holistic view across the automotive ecosystem that’s greater than the sum of the parts.
How DRiVEQ data helps you and the industry
As we all know, data itself is meaningless unless we can create valuable insights from it. DRiVEQ’s insights yield actionable solutions that help our clients build their businesses and give consumers a better way to buy, sell, trade, or repair their vehicles. Our clients use our real-time data to aid retail sales decisions, wholesale purchasing decisions and much more. Here are two recent examples:
A franchise dealer in Austin, Texas scoured data from a variety of sources to try to figure out how to best stock, price, and market their vehicles, but admitted that even with a multitude of resources they still ended up mostly resorting to guesswork. Then they added vAuto’s new car inventory management software, Conquest®, and realized they finally had the right data and insights to make better stocking, pricing, and merchandising decisions. Soon they were managing their inventory with greater precision, reducing expenses, and dominating their regional market to become the leader in volume and second in days’ supply.
Our Automated Marketing Platform powered by VinSolutions utilizes exclusive Cox Automotive first-party data and sophisticated logic to create automated, multi-channel marketing that creates a more personalized consumer experience across the ownership lifecycle. Tania Cruz of Bluebonnet Ford shares, “Automated Marketing Platform by VinSolutions has helped our dealership increase unit sales using equity mining. The tool has also benefited our service department by increasing appointments and revenue.”
The future, powered by data
With a comprehensive view of the consumer, the vehicle, and the market from end to end, the DRiVEQ engine enables connected data and seamlessly integrates into Cox Automotive solutions and capabilities. As a trusted partner to the automotive industry for more than fifty years, Cox Automotive will continue to innovate for our clients, providing the tools they need to succeed in the future. Data will be the key to this evolution.
Learn more about DRiVEQ and the proprietary products developed to help fuel your business growth. And look out for the next article in this series about how we activate data into actionable insights, followed by our use of unparalleled data combined with dynamic intelligence to drive innovation.
- 1 Cox Automotive data, 2021
- 2 Cox Automotive Car Buyer Journey Study, 2021
- 3 Dealer.com Analytics & Insights, Finance MRR data source
- 4 Dealertrack data January 2021 – June 2022