ADESA announced this month that its VirtuaLane multisite capabilities have been fully integrated into the auction company’s Marketplace mobile app.
What this means is that users of that app can now view and bid on any of the inventory at VirtuaLane multisite events from any of the 26 ADESA locations that hold such sales, the company said.
VirtuaLane sales take place at physical auctions and have the same bidding process as a traditional brick-and-mortar auction sale — including auctioneers, ringmen and bidding dealers — but no vehicles run through the lane. The vehicles are shown on a big-screen monitor at the respective auction site.
“Making VirtuaLane inventory from multiple auction locations available on the Marketplace app is a critical step as we evolve the app into a full-fledged e-commerce tool,” ADESA chief commercial officer Paul Lips said in a news release. “The overwhelmingly positive feedback we’re getting from our buying dealers is proof that this integration addresses their key needs and makes buying vehicles easier than ever.”
This news comes at a time when auctions, both corporate chains and independents, are balancing physical in-lane and digital online demand, while also aiming to create a safer experience at their locations.
That was a key topic at Used Car Week, where Auto Remarketing caught up with John Combs, ADESA’s vice president of sales to talk about the update on VirtuaLane and more.
“Safety’s a true concern, I think not only for us but for our customers,” Combs said. “And then also ... we wanted to show that there’s a migration to that digital transaction venue. And this is just one more component of it.”
That migration has largely (but not entirely) been with commercial clients, Combs said, with the initial type of vehicles being in segments like off-lease, which tend to generate higher confidence in terms of buyers knowing the quality.
“Eventually, we feel it will be all digital — at some point, we don’t know when,” he said.
Combs gives the example of Honda Finance, which he said only utilizes virtual remarketing channels.
He said if shown a two-year, month-over-month graph of the consignor’s retention and conversion, “you will not be able to tell me when we transitioned” the inventory to digital.
“They have not had to compromise a metric” for safety’s sake, Combs said.
“Not saying that some buyers didn’t grumble a little bit. But at the end of the day, we’re trying to be conscientious of that and listen to them, make adjustments that they recommend, but still go down this path in this virtual space,” he said. “But they’re still paying money for the cars.”
Commercial clients have been the primary drivers, but ADESA has seen dealer groups, rental, banks and repo companies either test it out or consider moving in this direction.
“We don’t want to push the consignors there. We want to offer it and then pull them there,” Combs said. “A couple of years ago, this probably wouldn’t have worked as well as it is now. Online engagement from buyers is becoming more (widely) adopted.
“And not just this venue, but many different venues,” he said.
Combs gives the example of an event earlier this year, when ADESA teamed up with FCA to pilot an ADESA Simulcast sale beyond the gates of an auto auction. They set up a sale at the FCA CPOV event that would be first time the ADESA Simulcast technology was used to launch a sale “from multiple sites in a non-sale-day environment to a defined, exclusive group of dealers,” the company said at the time.
FCA dealers at the Las Vegas meeting were able to bid on the cars, which were put up for sale from ADESA Golden Gate, ADESA Indianapolis, ADESA Kansas City and ADESA Las Vegas. More than 130 dealers attended the FCA CPOV dealer meeting.
Others in the industry are testing out and implementing digital measures that are gaining traction, as well.
In fact, over at Manheim, it took just over 10 months of 2019 for the auction company to reach its 2 millionth digital transaction of the year.
Manheim, which reached the milestone the first week of this month, said nearly half (48%) of its vehicles sold in October were bought by digital buyers.
Similarly, Peter Kelly — who is president of ADESA parent KAR Global — said in a Used Car Week keynote address said that about 58% of the vehicles the company sells this year will be bought by a digital buyer.
Manheim, meanwhile said it has seen a 22% spike this year in what are considered digital-only transactions: sales done via Manheim.com, Manheim Express, OVE and Private stores.
Its Simulcast sales have climbed 9%. Similarly, the auction company had added more “Digital Blocks” to its brick-and-mortar locations. Manheim said 20% of its lanes are now Digital Blocks.
Those Digital Blocks include an auctioneer, in-lane and online bidders, but the cars do not run through the lanes. Instead, they are shown on screens.
“At Manheim, we’re enabling clients to transact when, where and how they want to, and more and more clients are realizing the significant benefits of going digital,” said Zach Hallowell, vice president of Manheim Digital, in a news release. “With the largest audience of buyers and widest selection of vehicles, our digital platforms bring significant value to clients on both sides of the sale.”
On the independent auction side, McConkey Auction Group president and chief executive Bob McConkey explained during a fireside chat at Used Car Week that the online platform that started as Auction Pipeline — with the inventory of seven independent auctions working together — over the years evolved into Auction Edge. That company provides a suite of software solutions to independents, including technology that facilitates simulcast sales.
McConkey said 250 auctions now use the network.
“The auctions recognize now that they can’t be an island on their own, that based on just the ability and the mindset of what it costs to compete in today’s environment, you can’t do it on your own,” he said.
“Really, following the chains’ position in many respects, the leadership of Manheim and ADESA, you’ve got to consolidate the capital and put it to work for a bigger group,” McConkey said. “And that’s what Edge has done.”
ServNet executive director John Brasher, who joined McConkey for the chat, emphasized that “independent auctions don’t have huge piles of money to invest in things that aren’t going to work, so very often you won’t see an independent auction making huge capital investments in an untried idea.
“But it doesn’t mean that they’re not paying attention to the industry,” he said. “It doesn’t mean that they’re not very conscious of what’s happening around them and laying the groundwork for future investment. And that’s happening today.”