How Dealers Use Data, A Mixed Recovery, Higher Prices = Higher Quality

Paul J Daly: 0:00

We gonna play the intro music. Yes, we are. It is Monday, August 5. Everybody's everywhere. Jordan's going somewhere, Kyle's on a plane. I'm here out front of Mohawk Chevrolet, so we can bring this to you first thing Monday morning. Mohawk Chevrolet is in upstate New York. There goes the sound. What's up? Jordan, this is a fun

‍Jordan Cox: 0:34

it is, man. Look at this. Anytime I get to come on here and talk with you. Spend some spend some minutes with you, like, that's the highlight of my day. Stop,

Paul J Daly: 0:42

stop, stop. So, um, the asot team is, in full effect, doing what we do best, being out amongst the front lines of the dealerships, not just reporting the news like German suppliers are important, but what's more important to our audience today is what's going on right here in the stores on the front lines. So I'm here at Mohawk Chevrolet. Kyle's about to join me. We're going to be doing some pickup shoots for our next more than cars episode, by the way, if you haven't seen it, Docu series, we've been going across the country filming at dealerships. You can go to more than cars.tv. See everything we're at. But Jordan, you're about to ditch the office too, and you're about to hit the road as well. Where are you going today?

Jordan Cox: 1:19

I'll be speeding over to Jaguar Land Rover, a South Shore in northern Indiana. As soon as we're done here, I'm packing up this camera and hitting the road, yeah,

Paul J Daly: 1:28

two hour drive for me hanging out with, uh, somebody we just podcasted with, right? Yeah, today

Jordan Cox: 1:33

we got Jack Pearson, who is, uh, his episodes going live today. When I first talked to Jack, there was just something interesting and really engaging about him, and the way he the way he spoke. You know, he is also a 40 under 40, so we did have a little bit of background on him before going through that connection. But just talking with Him, LISTENING to Him, He's just so personable and really discovering how he develops and leads his team. They get into that in the auto collabs episode, I'm gonna see that firsthand day. That's what I'm excited about.

Paul J Daly: 2:03

Very cool. Very cool that, by the way, is another podcast we have called Auto collabs. Auto collabs, C, O, L, L, A, B, s. Search it on Spotify, Apple, wherever your podcast, you can check out that episode today. Plus we have a ton of other great interviews with dealers who are actually just out there crushing every day. Let's get into some news, because the news never stops. Um, Cox autos power of data study was conducted in late 2023 and early 2024 is taking a close look at how US auto dealers are using data to run their dealerships, make decisions, and, most importantly, boost customer value. Basically, no surprise here. Nearly, nearly all data dealers are using customer lead data, right? 96% if you're in the 4% that's not using that data, you're certainly listening to this show they're using vehicle data, dealership data. Over 80% see the upside of using this, mentioning things like more accurate forecasting, better trend monitoring, higher revenue, increased efficiency, all the things, however, confidence levels vary. While 72% trust their in house data, only 66% are trusting third party data. So we're approaching the halfway mark. Almost most OEM and third party data runs 3060, and 90 days behind which isn't always helpful in day to day decision making, especially if you're 90 days that's like a quarter ago. How are you going to make that? Use that to make decisions on where you're going? Data privacy and compliance are still major concerns. 66% of dealers are concerned about ensuring data privacy and get this. 44% have held off from implementing or adopting a new tool because of their concern about privacy, meaning, they saw a tool, they thought it would work, but they said, We're not going to do it because we're not sure about the privacy side. So obviously, dealers want to use this data to make their stores better, but, um, some revealing insights. I think

Jordan Cox: 3:53

for sure there is. I mean, if you look at that, I mean, anyone who's using data correctly should have 100% confidence in that. I think the reason that confidence level is so low is because it's just a whole paralysis by analysis. There's just so much data, it's not mapped correctly. I mean, I saw that when I was in marketing at the dealer group. We just had so much data coming in. We had really had to organize that and almost come up with our own mapping system. So we had our own system that kind of tracked that, and that was just for marketing spend, nonetheless, having the right lead information everywhere. You know, third party lead systems, for example, they'll look at the customer life cycle, and that is like 30 or 60 days, sometimes, especially when that customer shopping. And I'm not surprised that there are so many dealers that are holding off on getting new tools because they're worried about the data that might be leaked or the connection to their existing data. I mean, look what just happened last month. That's a big deal.

Paul J Daly: 4:46

I actually got over the weekend, over the last week, got two separate notices from Ticketmaster, oh no, saying that there have been two data breaches, right? And this is Ticketmaster. These things are becoming pretty normal that I almost ignore them. Right? Yeah, right. Like, if you know, you have strong passwords, different passwords for each platform, like, what else are you going to do, you know? And so I feel like that, but, but for dealers to be very leery about it, because a lot of eyes on what dealers are doing would affect an individual dealer. Think that's the big difference between like Ticketmaster and a dealer, right? A dealer could be an individual owner of an individual store now held liable for data privacy to a certain extent, and it could wipe them out in a way that Ticketmaster will absorb the blow, pay the fine, whatever it is, and, you know, keep selling Taylor Swift tickets. I don't know if they're the thing there. I think I don't want to open the wound, but probably use Ticketmaster. Maybe she does, I don't know. Let's keep moving on in the industry for recovery, the market experience mixed recovery as high interest rates and pricing concerns are still tempering sales growth in the second half of 2024 so far us, light vehicle sales estimated in July, estimated at 1.3 million down point 4% year over year, with some variations in estimates between global data and Cox automotive, the seasonally adjusted annualized rate rose to 16 point 1 million units, up from June's 15 point 3 million. So down a little in July, but still overall trending, the projection is up. Monthly sales are showing mixed results. Mazda, Subaru, Hyundai and Honda posted gains, while Toyota, Ford, Kia and Volvo saw declines. Fleet sales are down 33% year over year, impacting overall sales. Inventory levels are up 49% up over July of last year, but the growth is accepted expected to slow in the second year. Here's a quote from David Oakley, head of automotive forecasting for the Americas at global data. He said, quote, July's performance was disappointing, suggesting that the market could be losing a little momentum as we head into the second half of the year. A

Jordan Cox: 6:48

lot of stuff to cover there. Paul, one of the things that, like, exactly the biggest thing that kind of pointed, you know, was, like, the biggest point in there was the annualized rate of new car sales is finally at 16 million. Not that long ago, that was at 18 million, if you look at 2019 giving projections for 2020 and that's why in 2020 2021, and when it dropped to 12 million, that was such a big deal, and getting back up to the 16 million mark is huge. Obviously, the inventory levels are up. I am surprised that stellantis cdjr didn't make the list when they were pointing out the low performers on sold units, just because those are ones that have a huge days on lot for those

Paul J Daly: 7:32

vehicles. Exactly. We were driving by a stellantis dealer in the Syracuse market, and my wife and I were commenting on the gigantic lot full of inventory there was because it's it's one of those lots. It's like, when you get off a common exit that you usually get off of, it's right in front of you. You have to turn left or right, and during covid Right, there's like four trucks on the front. And now it's like more than I've ever seen there ever before. Look, the reality is that, you know, been seeing some things about the Fed maybe blowing the chance with interest rates. And, you know, unemployment is up, but the interest rates are where they are, so there's still a lot of macroeconomics at play here. And I think the interest rates and the pricing are just still playing games with it, where it's going to be really hard to figure out where the normal is for a while still. But the good news is, like you said, the SAR projection is up 16 point 1 million more than it was at the beginning of this year. So it looks like still projecting that there are a lot of consumers on the market, maybe in this or in the market, or maybe on the sidelines, that will be coming in toward the end of q3 and in q4 so we'll hope for that. Yeah, that's right, all right. Speaking of spending, we don't have a segue, but just play it in your head, and consumers are cautious. Oh, we way to go. Nathan. Nathan's like to me out here right now. We're set up in a parking lot, and he's literally, I wish I could show you without my here he comes areas. There he is. He had Nathan. We had to back the vehicle up just so we get a little closer to the building's Wi Fi, so he's over there producing the show. I'm shooting the show. You're shooting the show. We're all shooting the show. Uh, consumers, however, are cautious about uh. They're cautious about spending. It's continuing benefiting dollar stores and off price retailers. They're not just looking for low prices, though. They're demanding and looking for higher value and quality as well. This sounds like get a little sick of the cheap stuff. Many shoppers expect higher quality as prices rise, not just maintaining price points. For example, retailers like Abercrombie and Fitch focus on better buttons, softer fabrics and design embellishments to add value to the stuff. Gen Z and millennials are relying on product reviews and influencing their still to make their decisions. And here is a quote from Matt Pavich, Senior Director of retail innovation of revvionics. He says, quote, people are making really informed choices. They're not always going to the bottom, meaning, to the bottom of the price pile. How do you feel? You're looking for more value. What do you think?

Jordan Cox: 9:53

I mean, this the same thing that we've covered a few times now, Paul, it's not about the lowest price. I think of. Able, for example, when he was talking about how your website is your front line, especially with really good merchandising. That's right, not necessarily like the lowest price on Amazon. That gets the deal done. It's got to be merchandised well. It's got to have the value that's there. So you look at something like on Amazon, for example, I shop on there way too often. Probably every day. There's a box coming to my doorstep, whether it's from your my wife, we don't go to the lowest price thing. It's got to have decent number of reviews, it's got to have decent photos, it's got a decent description, and it's got to be from a decent seller. Like, I don't just go pick a random person, right? So I guess for me, like having all that bundled together in one thing, it's about the value that exists there for automotive retail too,

Paul J Daly: 10:40

and value and value. Let's remember like perception of value is value, right? It's right. So when we talk about things like merchandising, I know there's a lot of great conversations, a lot of great companies helping dealers do it. A lot of great dealers doing it independently, merchandising the vehicle that you have and the vehicle that somebody down the road has, maybe the exact same thing, the exact same quality, the exact same trim, your exact same color, all of the things. However, if your merchandising is better, the perception of the value of that vehicle is going to just be higher because you invested in better pictures. And then obviously the the experience has to keep up with it. That's where reviews come in. That's where the meet and greet comes in. I had, um, oh, what was it? I just I had this. I'm gonna talk about the Apple experience tomorrow, maybe, but had an experience at the Apple store that might be a little surprising, but it's easier. Oh, yeah, I had somebody come up to me at church yesterday, and they asked me if I knew a certain dealer. And they basically, they said this. They said I had a terrible experience at this. It was a Ford dealer, and they said I called them and told them about a specific vehicle in the inventory. It was a bronco. Said it was the one I was looking for. Is this? This? This? He said, I wanted to come in and test drive it. He goes. I showed up to test drive it. The salesman came out. Just gave me the keys. Nonchalant. He said, Here you go. You can drive it.

Jordan Cox: 12:02

I That's a good teaser. Paul, well, hey, we lost your audio. I don't know if we're going to come back. I guess we have to get to this story tomorrow. Oh, man, we got no audio from Paul, so I guess that's a good way at this point, man, Paul, there we go. That's it. We're going to close it out. So go out today. Have an awesome day. Everybody in automotive retail, Paul, have an awesome day Mohawk, and then I'll be out at Jaguar Land Rover with Jack Pearson. I'm looking forward to that. Everybody, have a Great day. Everybody,

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