CARY, N.C. -

Editor's Note: This is Part III of a three-part series on how the auto auction industry was impacted by and responded to the destructive winter storm that hit the central U.S. in mid-February. Part I looked at ADESA's strategies. Part II focused on independent auto auctions. Part III explores the strategy at Manheim.

Exactly one year ago Tuesday, Manheim temporarily converted its 76 auction locations to digital-only, amid the then-recent arrival of COVID-19 in the U.S., the World Health Organization’s pandemic declaration and a swirling surge of uncertainty.

The company has gradually scaled back those restrictions, allowing physical access to is auctions and even restarting the running of cars down auction lanes, as Manheim president Grace Huang outlined in an update Tuesday.

But the practice of going further digital (and for a time, all-digital) and the investments in the back-end technology to facilitate such sales certainly has paid off in the last year.

Particularly about a month ago, when a quite bizarre winter storm blast in the Heartland left much of Texas at a business standstill.

‘More prepared’ this time

Pre-COVID, when weather events such as the recent Texas winter storm would strike, the decision to go fully digital had to be a quick one, which “was not a fun experience for anybody that was involved,” said Patrick Brennan, senior vice president of Manheim Marketplace, in an interview last week.

This time around, though, Manheim and its clients were better accustomed to online sales and were ready to make the online shift, given the past year.

“It was a very difficult couple of weeks for everybody involved, there's no doubt about that,” Brennan said of the February storm. “But we were definitely more prepared, on all different fronts.”

Clients had a better understanding of Manheim’s digital process and services and had actually been using them for quite some time.

“There’s no question, the last year prepared everybody for the ability to navigate a tough couple of weeks with Old Man Winter that reared its ugly head for us, for sure,” Brennan said.

And even during the winter storm and its aftermath, Manheim was able to keep sales activities rolling, albeit digitally as it temporarily suspended physically running vehicles in Texas and at certain Midwest auctions.

Alan Lang, who is a division vice president at Manheim, has noticed a greater comfort level among customers in transacting digitally when situations like this arise.

“The difference for me has been what we've seen in our learnings through the pandemic,” Lang said in a February interview shortly after the winter storm.

“And it hasn't been, necessarily, operationally being able to prepare for a digital-type transition where we physically enclosed a sale but continued to utilize our Simulcast or OVE channels and things like that,” he said. “It's the response that our clients have had, being more comfortable with buying in a digital environment.”

That increased comfort level among customers has been accompanied and perhaps even driven by an increased investment by Manheim in its digital tools.

“Our clients can thrive in an all-digital marketplace if provided with the right tools and technology, while understanding that some may still prefer more traditional options to buy and sell cars,” Huang said in Tuesday’s update, recapping one of several things Manheim has learned through COVID-19.

“That’s the goal behind our commitment to deliver a more effective, efficient and connected client experience,” Huang said. “Similar to connecting the pieces of a puzzle, Manheim is investing nearly $100 million in 2021 to continue integrating our digital and physical offerings to better align with the varied needs of our clients, regardless of how they choose to do business.”

Lot Vision allows for eyes on vehicles remotely

Beyond that investment in its “connected client experience” and a host of other projects, one tech investment that paid dividends during the winter storm was Manheim’s Lot Vision tracking system.

“With Lot Vision specifically, it's a tracker on each vehicle, where our clients and employees can track a vehicle, know exactly where it is from their mobile device,” said Manheim associate vice president of operational excellence Bob Grounds in the same February interview.

“So, instead of having to find a car, wipe the snow off of it and actually get out of their van or vehicle. They don't have to do any of that; they know exactly where the vehicles are,” Grounds said. “From a safety standpoint, from a client experience standpoint and both internal and external, it's just changed the game in general, but certainly when the inclement (weather) and these types of scenarios happen.”

Lang added that utilizing Lot Vision to find vehicles fostered a “more efficient process,” one where Manheim could “get a lot more cars cycled through the sale to get them ready,” he said.

“Because you can imagine, sitting under two inches of ice or six inches of snow in markets where we typically don't, would have taken a lot of time, which makes throughput and getting cars ready would have been a lot less than what it. So, Lot Vision played a critical part,” Lang said.

And even at an auction in an area that does see a lot of wintry weather — Manheim Pennsylvania — the remote tracking technology came in handy.

The auction had just finished installing more than 20,000 Lot Vision trackers on its inventory in early February before the storms, said Manheim Pennsylvania vice president and general manager Joey Hughes in emailed comments.

“Prior to Lot Vision, we would scrape the windshields of every car to scan the VIN to identify its location. We could not have been more grateful to have this technology in place to make it much easier for our employees and clients to locate cars,” Hughes said.

Safety first

Beyond technological preparedness, Manheim also has to be ready in advance from a safety perspective, which is where Kenny Jones and his team come into play. Jones is the senior director of, environmental, health and safety at Cox Automotive, Manheim’s parent company.

Part of that preparation includes working with security teams and utilizing services like Accu-Weather, he said. Especially for the Texas auctions, “they were prepared,” Jones said.

“They didn't get ready last week; they were ready the week before,” Jones said in the Feb. 22 interview with Lang and Grounds.

For example, making a decision during the prior week not to have employees in the path of the storm come in to the auction that Monday or Tuesday (Feb. 15 and Feb. 16).

Back-end technology lends a hand

There are also operational preparations to be made, like coordinating through Manheim’s “buddy auction” system and staging facilities ahead of time.

And the investments in back-end technologies that Manheim has made in recent years help facilitate such preparedness.

“Where in the past, we would physically have to have a block clerk come to the facility, we'd have to have an auctioneer come in … but (with) the investments we made around the distributive workforce, you can work from home and virtually block-clerk,” Lang said.

“Auctioneers who can auctioneer a sale from home, we utilize those on top of some of the buddy auction systems, where an auctioneer may be sitting in Florida is actually able to run and conduct a live sale for Manheim Dallas.”

Manheim also prepared locations that weren’t slated to get hit by the weather to virtually pinch-hit for auctions in the path of the storm, Grounds said.

The back-end systems allow for a call going into one auction location, for instance, to be routed to another location that is more equipped at the moment to handle that issue, he said.

“So, if you're calling in Dallas, you might get answered by somebody in San Francisco (who) can handle those issues” be it arbitration, titles and so on, Grounds said.

The system allows Manheim to “handle that from a distance,” he said.

Huang said this of Manheim's Client Response Center in Tuesday's update, “Investments in cloud technology are making it possible to route calls quickly and seamlessly to the right expert who can best resolve an issue, regardless of where it originates. Not only does this process improvement save time for dealers, it also strengthens relationships and drives increased satisfaction.” 

And through the aforementioned “buddy system,” each auction is paired with another in a different region to lend a hand when need to help facilitate flexibility. And it’s not just around winter weather.

“Even when we ran through the hurricane season, all of our Florida auctions are married up to teams in the Northeast or out West. and we're able to conduct these sales,” Lang said. “At the end of the day, if the car is on site, available to sell, then we're going to have a sale. And it may not be conducted by the host auction; it may be through that buddy system.”