Using Data Science for Better Inventory Management with AJ McGowan

Unknown: 0:02

You're listening to the asotu con sessions by Effectv, live from asotu con 2024

‍Glenn Pasch: 0:09

All right, welcome back. This is Glenn Pasch, and I'm here at the asotu con podcast stage in collaboration with Effectv. Sitting across from me is AJ McGowan, co founder and president of autovision. Welcome.

AJ McGowan: 0:21

Thank you. Thank you for having me today. Oh,

Glenn Pasch: 0:23

perfect. And I think you're actually in this trio of interviews. I think you're the perfect way to end this conversation around content, because your company, autovision, does a lot of aggregating of data to help dealers, not just with, say, pricing of vehicles and things like that, but how to actually influence their marketing through better data. So if you could just give the audience a quick overview of what auto vision does, and then we'll dive into how it actually plays into the the strategy of marketing, sure.

AJ McGowan: 1:01

Yeah, absolutely. So autovision, fundamentally, is a data science platform that, on top of which, you know, the thing we're sort of best known for is inventory management. So people know us for we're going to put all of our cars onto the platform. We're going to help you to price those. We're going to make it hyper targeted. We're going to take the dealer's perspective into the view of each car, so which is really unique in sort of the inventory management valuation world. But what goes along with all of that is we're aggregating up all of this data from all of these different touch points. So the dealer's website, the leads that they have coming in, third party listing sites, understanding what their performance is there. So, you know, we look at it as this sort of holistic platform for the dealer to really understand what's happening with merchandising their inventory, not just sort of the traditional view where price is the only weapon.

Glenn Pasch: 1:51

So and I really like that, because if we just when I was talking to you earlier, where my brain went was we're looking at not inventory as a whole. We're looking at a car, one car, and is it merchandise correctly? Is it priced correctly? Because then dealers can make decisions of how to market that vehicle. We have a tendency to just to what you say, inventory management, marketing, inventory is a big chunk, versus saying, well, maybe I don't have to market this specific vehicle. It's going to sell in a few days, because it's got a certain number of VDP views where these cars need more help. And so talk about that like, how does that data? How are your dealers using this data to know what to manage, what To market, to maximize their inventory?

AJ McGowan: 2:38

Sure. Yeah. So I mean you, if you look at the way the dealers traditionally have managed their inventory, you go back, you know, 15 years ago or so, and people started to say, what is the market price, right? Right? And I'm going to try to move that stuff off as fast as possible. If it's not moving, if I'm not getting attention, it must be priced too high, right? That's the that's the thing. And sort of all of the the whole world and ecosystem was sort of built around this idea of, how quickly can we move these cars off the lot and we just lower the price and lower the price and lower the price until something sticks right, right. The way that we look at it is, it's more complicated than that. The world has changed. The world has evolved. Consumers are very internet savvy. Obviously, they have media coming in from lots of different sources that you know to the consumer is cohesive, even if it's not always from a you know, marketing strategy standpoint, but it really should be right. And if you're not getting the leads that you want on a given car, it's not necessarily because you've priced it $1,000 too high. It might be right. You might be out of market, but it also might be that you just haven't bought advertising on that unit, right? And so that idea of being able to get hyper specific about looking at a vehicle and being confident in your price, to be able to look at it and say, No, you know what I have prices to market correctly. I know who my real competitors are in my market, and everything looks good. There must be something else going on, right? And so we talk a lot with dealers about that, where it's like, Hey, listen, it's Tuesday. You're taking a look at all this, seeing what your stats look like. Instead of dumping the price on that unit by $1,000 to hopefully get your rank up a little bit on the third party listing sites, why don't you spend a couple $100 and see if you can do some targeted advertising, get somebody to come in the door. You know, I think dealers often think about marketing as sort of this, this macro thing where it's like, I'm going to market all of my inventory and that, you know, a lot of those dollars then just get lost in the noise. You know, everything about autovision is really geared towards you need to look at each individual unit as having its own story, its own life cycle, within your dealership, almost its own budget, its own budget, exactly, that's right. And so you know that it hasn't been done in the past because it's hard. I mean, if you don't have a tool that ties all this stuff together, it's very difficult to manage profit silos on several 100 units a month that are constantly a moving target, or

Glenn Pasch: 4:58

trying to go dig through your analyst. Six to say, did they get enough VDP views or not? And so then it's to your point is, I like that because we do manage by price and keep moving it, versus no actually, because we're trying to advertise 300 vehicles with a limited budget, everybody gets a little bit. Versus turning around and someone saying, hey, these cars are going to sell. Why don't we take that budget and put more of it onto these specific vehicles to see first, if it was just a visibility issue or was it a price issue?

AJ McGowan: 5:35

That's exactly right. It's, that's, you know, and that's our whole philosophy on all these things, is, let's acknowledge that these problems are hard, right? Let's acknowledge that the data is complicated and it's difficult to manage, and then let's use the right tools to automate the processes that are repetitive, that are taking you know, some of the smartest people in your dealership, hours and hours of their day, every day is spent just trying to put all these pieces of the puzzle together, right, right? So our philosophy is, if you can automate that and raise and surface the things that need, alerts that, hey, go take a look at this, because there's a real opportunity there. Whatever that is, it's I need to lower the price, or that's a unit I should buy, or here's something that I need to target more advertising towards. You know, again, we we look at those as all being different aspects of the same problem, not three or four different problems.

Glenn Pasch: 6:23

So, so again, what I'm hearing is, is that your product is going to take all this data and create a systems of alerts for someone to sort all of that, to save them time. So then their time really can be spent on Well, I have to go market this, or I have to go look at this price or I have to do versus I have to look at 300 it's going to narrow it down and say, Hey, here's 15 of your children, so to speak. That need your attention is that, is that a fair way to assess the product? Yep, that's

AJ McGowan: 6:52

a great way to say it. And you know my background? I came before I was an automotive I was in digital advertising, so this is an area I'm super familiar with, right? Have a lot of comfort in because when when you look at what the marketers job is, it's so difficult to define that when you're talking about automotive, because it's not a commodity, right? When you have a market and you're trying to sell, you know whatever widget it is, and it's the same thing over and over again, same message. It's just a question of, is it the holidays, are we running a sale? Is right? You know that, you know, sort of old school thinking works for commodity products, but in today's market, every vehicle in your lot is a unique story, right? It's a unique vehicle. It has a unique buyer, who may be very different than the buyer that came in yesterday to come pick something up, right? But, but managing, you know, 100 different SKUs, if you will, is a lot harder than managing five SKUs that. And that just becomes a bigger and bigger problem as you start looking at having more and more vehicles on the lot and increasing the turn No. And

Glenn Pasch: 7:52

I like that, because you're right, if I'm selling this, you know, podcast board, it's a widget, and I can just find messages to connect, but every car has different trim levels, has different features, has different miles, so everybody has a different story. And it's really looking at your inventory as unique products that need different strategies, or these 10 need this strategy, and these need this strategy and this budget, and to do that manually, is why most people don't do it just one big market. So we've talked about content with previous guests, and we've talked about different strategies, and what it seems like is this is a perfect end cap to say, great use all of your marketing when it all comes here, I'm going to give you a dashboard to say something's not right with some of your products, and now I'm just going to narrow it down so you then can use your expertise to be able to say, is it price? Is it this? I can look and see what's in the market and come up with a more effective strategy, closer to the finish line, exactly.

AJ McGowan: 8:58

And almost as importantly, I always like say this when we talk about this, because we tend to focus on we're going to alert you to, you know, the five things that are wrong. But almost more important is we're going to make sure you feel confident that you can just ignore the other 95 because it's on autopilot, or it would be alerting Right, right. That's a really, really important factor. Is that the automation can't just be automated. It's also gonna be right. And that's, you know, a critical thing. You've got to be able to trust that the system's doing what it's doing in the vast majority of cases where everything is

Glenn Pasch: 9:32

fine, right, right? And I think that so just as we wrap up, how do, how do you get the dealers to trust that, like, like, you know, initially it sounds good, yeah, sure. 95% is going to be right. How do you actually build that trust to them, that they can over the course of whatever time frame, to be able to say, Yes, I can trust what I'm seeing.

AJ McGowan: 9:54

Yeah? So, I mean, it's a great question, and it's an evolutionary process, you know, as they, as they start. Use the tool and use the system, and they start to make the modifications to their settings and things like that to really fine tune it to the way that they run their business, right? They tend to start to trust the numbers more and more. And, you know, we, I don't know if you know, we were acquired by rounds and roads about a year ago, and so now we're able to integrate in, you know, more DMS data and recon data and smooth over sort of every aspect of that business, right? And so that trust comes a lot faster than startup, and we're just sort of dealing with a narrow sliver, right?

Glenn Pasch: 10:30

I like that because your data set now is bigger to be able to validate what you're doing. That's exactly right. Awesome. Well, great. I want to thank you so much. This is a great, great conversation. So can we give AJ a big round of applause, and if you want to chat with him about autovision, make sure you do. Thank you very much for your time. All right,

Unknown: 10:49

thank you for listening to this. Asotu concession by Effectv. If you want more content like this, you can check out our other podcasts. We have a daily show called The automotive troublemaker, Monday through Friday here on podcast, also live streamed on YouTube and LinkedIn and Facebook. We also have a long form podcast called Auto collabs. Auto collabs. And if you just want to go a little deeper into this community, you should sign up for our regular email. We put our heart and soul into it. You can get it for free by going to asotu com. We'll see you next time you

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