Directionally Right but Exactly Wrong: What dealers are almost getting right
You may have recently heard the phrase data is the new oil, you probably immediately inferred what that means. Everywhere you look it seems companies are trying to monetize the data they have been collecting on us. What you may not be aware of is the second half of that phrase made by the person that originally coined it, Clive Humby, UK mathematician. The statement in total is “Data is the new oil but if unrefined it cannot really be used.”
Clive Humby, to my knowledge, did not work at CarMax. But he could have. Understanding the need to be able to normalize messy data into actionable insights is something they have done since the early 90s. They have developed a formula for inventory that is replicated in each market and powered by hundreds of thousands of vehicle records each quarter. CarMax scores each of their lots and is optimizing those scores weekly through the purchases they make at auction. Because they have learned to leverage their own performance data they know exactly what car to buy next to improve the overall mix of inventory for their customers.
I was speaking to a prominent dealer from the MidWest this week and we began discussing the challenges around knowing exactly what used cars to stock. He said, “buying a version of the right car can be exactly the wrong car”. That really struck me. While CarMax has built its success on leveraging its own historical performance data the rest of the industry has been given tools that allow you to be directionally right but exactly wrong. Simply buying a compact SUV, between a certain price band is not good enough any more. You need to know which year, make and model, trim level, color and ideal mileage has driven the performance you would like to replicate. If you don’t have the ability to refine your data into compelling insights you haven't struck oil at all.
Luckily for you Drivably ingests your data and refines it into a more digestible format that provides you with all the metrics and insights you'll need to strike oil. If you want to take your dealership to the next level with Drivably feel free to book some time on my calendar.