McLEAN, Va. -

What does the future hold for the auction industry?

One place to begin looking for an answer is where some of its aspiring leaders are building a foundation, both in terms of developing auction business acumen and fostering connections with industry peers.

It’s the “Next Generation/Sons and Daughter Group” of the Auction Academy, a two-year continuing education program developed by TPC Management Co. for auction industry professionals.

In a sense, sure, these folks attending the classes are competitors.

But spend any time around the 16 members of the inaugural lass of Auction Academy and it’s clear this is a collegial collection of peers who share friendships, business experiences and best practices, as well as a common link as part of the next generation of auction industry leadership.

Each of the members of this class is the son or daughter of an independent auction owner or owners. The roles they play at their respective auctions range everywhere from construction to e-commerce to fleet/lease and marketing.

Since the spring of 2012, they’ve been hopping aboard planes or putting pedal to metal to cross the county to participate in Auction Academy classes each quarter. The class has been traveling to the nation’s capital, the Pacific Northwest and everywhere in between.

They’ve interacted with National Auto Auction Association leadership, shadowed auction management in putting on a Rock & Roll Sale, learned the perspective of the dealer at the National Automobile Dealers Association headquarters, undergone best-practices training and much more.

But as valuable as those sessions can be, what appears to mean the most about this collection of young auction executives is the relationship-building, as they prepare to take on the next wave on auction leadership.

Auto Remarketing — which, along with our parent company S&A Cherokee, is a sponsor of the academy — recently sat in on an Auction Academy class in May in the Baltimore-Washington area and talked with several of the students about the value they see in the Academy as well as what they foresee for the auction industry’s future.

We also chatted with Manheim Pennsylvania about its NextGEN program, which was designed to connect the auction with the next generation of dealer owners, principals and general managers.

Future of the Business

On the first full day of the Auction Academy session in May, the students got to see things from the point of view of a customer: the dealer. At the headquarters of the National Automobile Dealers Association, NADA Academy instructor Les Abrams gave attendees a comprehensive look into all the intricacies of operating a dealership.

Interestingly enough, the challenges that dealers face tend to parlay into the auction business. One of those challenges is the expanding presence and influence of the Internet and growing technology in the used-car business.

“The 800-pound gorilla is technology,” said Paul Barber of State Line Auto Auction, one of the Auction Academy students. “Everybody wants it; nobody knows where to go.”

Thanks to the Internet, leaders in the younger generation of the auction business are “growing up in a completely different age than what our parents and relatives in the industry have dealt with,” said Cody Boswell of KCI/Missouri Auto Auction.

That, Boswell said, means implementing new processes, solutions and strategies to go along with these changes, and learning how to use them for your own benefit to grow as an auction.

One challenge, said Britney Smith of DAA of Idaho, is “adapting beforehand” to the sweeping changes that the Web brings to the auction market and staying in front of the rest.

It’s crucial, she said, to figure out, “How can we be one step ahead?”

When asked how he and his peers are adapting to the ever-changing tide of the Internet and its impact on the auction, Barber was succinct in his response: “Methodically.”

“We don’t want to just jump on a bandwagon and just go riding for 100 yards. We want to be there 10, 20, 50, 100 years down the line,” Barber said. “And in order to do that, I think we have to be methodical in which avenues we choose and how we go about things to make sure that it’s really the right place for our business.”

Growing Together & Making Connections

The lessons, teachers and instruction — and as Boswell put it, “learning from start to finish how the auction runs, outside of your own auction — are vital to each of the students attending the Auction Academy classes.

But beyond the coursework, what many of the young auction executives have found to be extremely beneficial is connecting with peers and building relationships for the future.

“My favorite part is the people that you meet and the networking, because in any other situation, I probably wouldn’t come face-to-face with these guys,” Boswell said. “Starting out, being the same age in the same industry and making these connections so early so that we can grow together … it’s really helped me out a lot. Developing those relationships is really important.”

His peers echoed that sentiment.

“We bounce questions off each other all the time, not just in class,” said Smith. “So, if we’ve got an arbitration issue or they run into something they haven’t run into before, we’ll shoot out an email to everybody. Learning how other people handle a situation, you can take the bits and pieces that work for you and solve the problem.”

“The real value, in my mind, is the relationships that we’re building with each other,” Barber said, calling the experience of getting to know peers in the industry “invaluable.”

The same sentiment was found at Manheim Pennsylvania’s NextGEN program.

John Crispeno, the auction’s marketing manager, said Manheim Pennsylvania and other auctions within the Manheim fold have a lot of multi-generational customers.

Dealers have started to bring their adult children to the auction to learn the business, and as they buy and sell with their parents, they are “learning the ropes,” Crispeno said.

With that in mind, Manheim PA was looking for a way to continue their relationships and business partnerships with these dealerships and wanted a way to educate and mentor this up-and-coming generation of dealer leadership.

“We do know there’s a big generational difference as far as technology acceptance. The older generations are more in-lane and active,” Crispeno said. “They want to see it, touch it, feel it, smell it; while the younger generations are very technology-based and tech-savvy to where they’re completely satisfied doing all their purchases on our fabulous sites like OVE, Simulcast and what have you.

“That doesn’t bring them into the office or into the auction, but that relationship with the auction is still very key. If they have a challenge or if they have a problem, they’re going to have to get on the phone eventually,” he continued. “And if they knew a person here or how it all worked here, then that would make those phone calls and that experience a lot better.”

So, the auction started its NextGEN program earlier this year and runs classes in an educational series once a quarter.

“We wanted to be able to give them bits and pieces of information throughout the year, and formulate the relationship stronger by assigning each of the participants a long-time tenured Manheim Pennsylvania employee as their in-auction mentor,” Crispeno said. “That’s the man or woman they feel they can pick up the phone at any time and give them a call, and know that they have an advocate on the inside that can help get to the right places in the auction that can help them.”

Challenges for the Future

This understanding of the customer that Manheim PA and Auction Academy honed in on is something that Bill McIver believes has never been more important for auctions.

The chief executive officer of the American Auto Auction Group has a unique and broad perspective of the various avenues of wholesale buying and selling, given his background as the director and developer of the online SmartAuction program and his current role leading a company that includes both traditional physical auctions and the hybrid-style of Auctions in Motion.

Interestingly enough, though, as much as things have changed in the auction business, McIver sees some of the foundational elements of wholesaling as key cogs in the industry’s future.

“Some of the basic issues seem to never change, from the price of fuel impacting transportation costs to the availability of cheap money that keeps retail payments and wholesale floor plan costs at historically low levels,” McIver said.

“Recently, there has been a trend among franchise dealers to sell older, higher-mileage vehicles that traditionally would have been sent to auction. As other market factors come to bear, particularly the availability of financing, these practice will likely change as they have in the past,” he added.

“It always comes to down to who can offer convenient, friendly service that add value to the customer’s experience,” McIver noted. “It’s more important than ever to listen to our customers and find ways to provide the services they need to sell or acquire vehicles whether in our lanes or online.”

That sentiment echoes some of what Jason Hockett, president of Auction Broadcasting Co., had to say about issues that he believes will be key for the auction business in the future.

Welcome the technological changes and apply them to the auction model.

It’s crucial, he said, for auctions to “continue embracing technology and combining it with the proven process of the auto auction business.”

And the future for this business looks bright, Hockett said.

“As technology continues to change, auctions need to continue improving the processes. Live auctions with Edge Simulcast online bidding are always going to produce the highest overall returns for our sellers because we are combining the excitement and emotions of a live auction with savvy Internet bidders who are trying to fill a retail order,” Hockett said.

“Auto auctions are still able to transport, repair, detail and sell a vehicle quicker and cheaper than any other process available. Consignors have proven that they get higher returns for vehicles that are ready for retail versus the vehicle that needs repaired and detailed.”

Joe Overby can be reached at joverby@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.