The ongoing microchip shortage and resulting production delays has largely defined this year for dealers and OEMs alike. According to early forecasts from IHS Markit, an estimated 1.3 million fewer light vehicles were produced in the first quarter of 2021 because of semiconductor shortages, resulting in historically low new vehicle inventories around the country.
At the same time, buyers are returning to market, with concerns over vehicle availability amid inventory shortages further driving demand – and already high sales prices – even higher.
For dealers who have taken a data-driven approach to consistently stocking their inventories with in-demand pre-owned vehicles, this has translated into exceptionally high profits in the short term, as well as greater control over future success amid ongoing challenges.
In this blog post, we’ll share three ways data mining tools help dealers acquire the best pre-owned inventory and maximize their sales opportunities by:
Identify Local Sales Trends & Demand
The first step in acquiring in-demand pre-owned vehicle inventory is identifying which makes and models present the greatest opportunity in your market. Data mining tools that integrate with a dealership’s DMS and CRM enable sales and service teams to do just that by identifying local, regional and national trends driving demand.
Data mining tools empower dealers to localize trends by tracking how their customers are shopping on their lot, such as identifying the vehicles selling the best and worst over the last 30-to-90 days and the average gross of those sales.
Advanced data mining tools like Market EyeQ empower dealers to take data-driven inventory management one step further by assessing household and vehicle ownership insights from their entire market – not just their customers. This enables dealers to tap into key insights to further tailor their approach, such as make/model/trim availability in-market, average auction prices and which drivers may be returning to market soon.
Proactively Identify Vehicle Trade Opportunities
With retail acquisitions typically generating less overhead than auction – plus the added opportunity to make a sale – buy-backs and trades are key to maintaining a profitable pre-owned inventory. Data mining tools empower dealers to leverage the most powerful dealership inventory tool at their disposal when it comes to acquiring used vehicles via retail acquisitions: data.
By accounting for factors beyond just vehicle equity, data mining tools can be used to identify prospective trade and buy-back opportunities before customers return-to-market and the digital dealerships are knocking on their inbox, giving dealers a significant step up over the competition.
For example, some of our dealer partners leverage Market EyeQ to automatically assess their upcoming service appointments and identify potential trade or buy-back opportunities, such as customers who are out of warranty, over their lease mileage or could benefit from a new product design.
Pinpoint Prospective Buyers for Incoming Inventory
Rapid digitalization coupled with incredible consumer demand and intense competition to capture buyers has hastened dealerships’ inventory turn. Data mining tools enable dealers to keep up by pinpointing prospective buyers predicted to be interested in their incoming inventory – as well as the factors influencing their decisions to buy.
To expedite this inventory planning process, data mining tools with predictive marketing capabilities like Market EyeQ automatically identify prospective buyers before they start shopping around and map buyers to both a dealer’s available and incoming inventory.
By identifying the key factors driving a prospect’s buying decisions, dealers can further maximize their available inventory by delivering personalized messaging and specific offers that set the stage for a seamless buy-back or trade-in experience tailored to each buyer’s unique wants and needs.
While inventory shortages have translated into record-breaking monthly sales numbers in recent months, IHS Markit estimates this shortage will persist in the auto industry until at least 2022. Simply put, its critical dealers think long-term and not just month to month about how data mining tools can help dealerships acquire pre-owned inventory.
By leveraging data mining tools, dealers are empowered to take control of their future success and acquire the best pre-owned vehicles by identifying local trends and demand, engaging buyers of in-demand pre-owned vehicles and mapping prospective buyers to their incoming inventory.
Interested in exploring how Market EyeQ can help your dealership acquire in-demand pre-owned vehicles? Contact us.