Inventory Reporting Best Practices
The most visible function of an ecommerce solution is to enable online transactions for vehicle buyers. However, ecommerce solutions also allow for data collection and reporting that can provide extremely valuable insights over time for retailers regarding their inventory mix, optimization and vehicle pricing that will help them achieve their goals. Using various reporting tools within the ecommerce solution, retailers can develop a list of inventory to acquire, prioritized by profitability and velocity. Additional tools can advise on market pricing, the sourcing of vehicles at auction and suggest bid limits for each vehicle.
Data for inventory insights
With each vehicle in inventory featured on its own page, the retailer has access to data on Vehicle Detail Page (VDP) views showing what consumers are interested in, where those customers are located, and how their inventory compares with other retailers.
This data can answer key questions for retailers, including:
- What is the makeup of my inventory by body style?
- How do different body styles, year/make/mileage (YMM), mileage range and price ranges perform based on metrics including VDP views, add to cart, order conversion and average days on site?
- Where is the most engagement for my inventory (overall or by body style, YMM, mileage range and price range)?
- How does my current inventory mix compare to my percentage of VDP views by body style?
In cases where supply and demand do not align based on consumer engagement, the retailer can make informed decisions about adjusting their inventory mix to reduce or increase their inventory accordingly.
Direct Vehicle Acquisition
Kelley Blue Book Instant Cash Offer® is incorporated into the ecommerce transaction to add value for the consumer and the retailer. Whether the consumer buys a vehicle from you or not, It’s a good opportunity for the retailer to diversify the way they build inventory.
Available data can help retailers determine:
- Market demand and scarcity within the target market
- Makes, models and price points to pursue
- Pricing variances across markets to be able to buy low and sell high through ecommerce
It should be noted that your trade-in program requires some additional steps for experienced staff to manage, including prompt follow-up processes to clinch the acquisition and a plan to facilitate vehicle pick-up. Another important part of the process if customer communication. This can be accomplished through video, phone or text chat. The important part is to communicate with the customer in the way that best suits their preferences. The effort allocated to managing a seamless ecommerce trade-in process is outweighed by the consumer benefits.
Data for Inventory Pricing
It’s important for retailers to know how the balance of inventory between metal values is evolving positively or negatively over time and determine if there are any concerns with their Market Days Supply (MDS). Various data sources can help them evaluate how their Price to Market (PTM) may be impacting their inventory performance and identify inventory that may require pricing adjustments.
Here are some of the inventory pricing questions retailers can examine based on ecommerce platform and additional partner data:
- What is my average PTM and Cost to Market (CTM)?
- How has my pricing strategy changed over time for a given piece of inventory?
- Do I have replenishing issues, or is my available inventory staying consistent over time?
- Is my inventory aging and is PTM contributing to aging vehicles?
- How does user engagement vary with different PTM ranges?
- Has the quality or desirability of my inventory changed over time?
- Are my profit time or market day supply segments priced appropriately?
- Which vehicles are not priced appropriately based on desirability, price, and user engagement?
Finding the answers to these questions can empower a retailer to make broad strategic pricing decisions across their inventory as well as make the right choices to move individual pieces of inventory that were not optimized for the current market
Driving Ecommerce Success
The right ecommerce solution backed by a Cox Automotive partnership helps retailers establish simple pricing models and vehicle inventory processes to support online sales.
We are committed to your success and look forward to discussing how you can use the power of Cox Automotive and our ecommerce tools their full potential.
Reach out today to dive deeper into inventory reporting.