As we start a new decade, it’s safe to say the digital wholesale revolution is here. In 2019, nearly half of automotive wholesale transactions happened online.
Now, on the cusp of that 50% digital sales threshold, we’re at a turning point where buyers and sellers have the opportunity to reshape how they do business for the better.
We’ve seen many similar inflection points throughout history. Take 2015, for example, when cell phone usage overtook landlines, or in 1918 when half of families in the U.S. had sold their horses in favor of a Ford Model T. In both cases, it only took two or three decades for a novel innovation adopted by few to transform into a daily tool depended on by many.
Both examples show how these technologies delivered well beyond their initial promise or predictions. Cell phones aren’t just for calling; they’re used for taking pictures, managing calendars, and maybe even reading this article.
Vehicles haven’t just replaced horses; they’ve transformed commerce and shaped cities. And now in 2020, the foundation has been laid for the automotive wholesale industry to experience a similarly transformative shift defined by three factors: access, connectivity and personalization.
With great access comes great opportunity
As the marketplace further shifts to digital, buyers gain a lot more access to inventory, with a superabundance of options in every corner of the country. Sellers are connected to tens of thousands of buyers, significantly increasing sales opportunities.
Unparalleled access to information will also shape the marketplace by offering more accurate tools for price discovery and spurring innovation in condition reporting and vehicle representation. Today and into the future, access will enable dealers to buy and sell smarter and more confidently than ever.
Connectivity is the key to speed and convenience
Increased connectivity allows dealers to do business on their own terms. Dealers won’t only enjoy the convenience of an anytime, anywhere connection to the marketplace, but they can also gain significant advantages. With 24/7 connectivity, sellers can move vehicles within hours instead of weeks, and buyers can source inventory on-demand to meet immediate business needs.
Rather than being transported to physical auctions, vehicles can be listed in minutes from a dealer’s own lot using a smartphone. In fact, mobile technology is taking condition reporting to a whole new level — building trust and fueling transactions in the digital marketplace. As technology advances, so will buyer confidence, wholesale strategy and dealership profits.
Personalization is a win-win for buyers and sellers
The personalization that has made other areas of our lives easier is coming full force to wholesale in 2020, and it’s this technology that will take the digital wholesale marketplace far beyond what’s possible at a physical auction.
Driven by artificial intelligence (AI) and machine learning, personalization will help buyers and sellers achieve unparalleled efficiencies — and maximize profits.
We’ve just started to scratch the surface on the potential of this technology, with personalized vehicle recommendations helping buyers finding relevant inventory faster — which is as good for buyers as it is for sellers. Additionally, AI is automating strategic pricing, as well as helping sellers find the best locations to sell their inventory.
Other applications, like automated damage detection, are in their infancy and offer just a taste of what’s to come.
Like many disruptive technologies, the full potential of the digital marketplace is yet to be seen. But one thing’s for sure — technology will continue to change auto wholesale for the better.
Twenty years ago, if a dealer was told they would be able to bid on inventory while mowing the lawn, or after changing their baby’s diaper at 3 a.m., they’d probably laugh. But today, it’s possible a dealer is sitting on their John Deere while scrolling through listings — a true mark of how digital technologies have changed the way we all do business.
Change isn’t always easy, but the benefits of embracing it can be tenfold. Looking back to the earlier example of how mobile phones overtook landlines — just pause and think about how much more efficient we are now. And that’s not just because we have mobile phones but because we, as users, leaned into that change, and the companies developing them went far beyond the original vision.
We went from simply being able to make calls on the go to easily accessing our calendars and emails on Blackberrys to now: where we have mini computers in our pockets that enable us to access and share information, photos, videos and more at any moment. It’s a monumental change, and that’s the kind of shift that we see happening in the wholesale marketplace.
While the exact roadmap for the future of the wholesale digital marketplace is yet to be determined, the possibilities that will come with more access, connectivity, and personalization are clear. In 2020, we will continue to usher in a new era of opportunity and success for buyers and sellers in the wholesale marketplace.
Zach Hallowell is vice president of Manheim Digital Marketplace.