Kelley Blue Book
The automotive industry is changing at an unprecedented pace as consumers demand the industry to embrace the digital-first world.
Individuals are beginning their car-shopping process online at an increasing rate, completing most of their research before stepping foot in a dealership.
In fact, according to Cox Automotive’s recent "Future of Digital Retail Study," seven in 10 consumers are more likely to buy from a dealership if they can start the process online, while 71 percent of consumers want to get information about the deal online, away from the dealership.
As more and more of the car-shopping process takes place online, the need for accurate, trusted pricing and data for both new and used vehicles will become even more integral.
Dealers can no longer rely on in-store interactions to lock down a price. With most of the research taking place online, consumers are relying on third-party valuation tools to provide accurate pricing and up-to-date data to guide them through the purchase process.
These pricing tools, backed by up-to-date and relevant data, help give consumers reassurance that they are receiving a fair and accurate price, further alleviating the stresses and concerns that often revolve around the deal-making process.
Mike Sadowski, Kelley Blue Book
Third-parties now have access to more data, resources and technology, which has resulted in the most market-reflective valuations to-date for the industry. Enhanced valuation models, like the availability of range-based pricing for consumers, provides car shoppers with a realistic view of what they can expect to pay for a vehicle in their area.
With a local approach that not only looks at data at the state, but also county and even ZIP code level, the data becomes more granular and market-reflective. And when dealers and consumers can come together and work with the same set of numbers, it is a win-win for both parties, as they both spend less time negotiating and more time focused on creating value and enhancing satisfaction around the transaction.
While many dealers have taken steps to deliver a more digitally-enhanced car-shopping experience, and have access to improved data, more work needs to be done to meet the demands of today’s certified pre-owned consumer. Demand for CPO inventory continued its gradual growth in 2017, and Cox Automotive estimates sales will continue to climb in 2018.
Despite this segment’s popularity, there are very few tools that cater specifically to consumers searching for these vehicles. For example, our all-new CPO Price Advisor, which is based on recent certified vehicle sales transactions, updated weekly, and adjusted for local market conditions and seasonal trends, is one tool that helps consumers search for CPO vehicles.
However, the automotive retail community needs to ensure there’s an industry standard when it comes to creating more transparency between dealers and consumers. This ultimately wins out in the long run, as modern, transparent digital tools backed by actual transaction data will help move units faster; a process that both dealer and consumer can trust and buy into.
As digital retailing continues to become a larger part of the car-shopping process, demand for trustworthy, reliable and data-driven pricing tools will only grow greater. It’s time to meet the consumer’s needs head on and enable a more transparent and confident car-shopping experience online.
Mike Sadowski is vice president of operations and general manager for Kelley Blue Book.