BUFFALO, N.Y. — ACV Auctions Inc., a dealer-to-dealer, online automotive marketplace, has crisscrossed the country conducting hundreds of lot visits and video conference calls to help its independent and franchise dealer partners prepare for the new normal. From April to June, the average number of cars sold per dealer on ACV’s platform increased by nearly 100%. The ACV marketplace also experienced increased activity with bids per auction more than doubling. Despite dealership foot traffic remaining low, a digital-first approach to operations from inventory management to customer communications has helped ACV’s dealer partners streamline their time and resources, while increasing access to data for efficient, bottom-line driven decision making.
What the pandemic has taught the auto industry is that the shift to digital is imperative, and it needs to happen now.
While the near-term economic outlook is uncertain, it is clear that consumers will continue to need to buy and sell vehicles—and all eyes are on the massive 40 million-vehicle used car market as households penny-pinch and new vehicle inventory shrinks. However, the retail landscape may be changed for good. ACV is committed to helping its dealer partners navigate these unknowns with innovative tools and the know-how necessary to do more with less on both the wholesale and retail sides of their business.
“What the pandemic has taught the auto industry is that the shift to digital is imperative, and it needs to happen now. Dealers need to sustain business amidst retail closures, drive immediate sales and facilitate long-term growth,” said ACV Auctions CEO George Chamoun. “The biggest challenge facing the used car market is a lack of trust and transparency. Our technologies, coupled with our massive inspector force and our vibrant marketplace, are solving those issues. Once dealers know the true condition of a car, they can buy and sell with confidence and speed, and grow profitable businesses.”
The following are three business areas for dealers to assess as they look to digitize operations and create solutions for success.
Inventory Management: Get smart about inventory management to maximize cash flow
It used to be worth it for dealers to hold out for the right consumer or dealer-to-dealer sale to get the most money for used inventory. That is no longer the reality. To keep inventory moving, dealers should turn to inventory management software to help take stock, understand what sells and find gaps. In today’s retail environment, pricing and price transparency is key to vehicle movement. Unsold cars sitting idle in a dealer’s lot could cost $37 a day per vehicle.
However, finding and selling inventory for the right price is just as critical for success. The industry has seen $2.6B lost in buying cars the wrong way. To help make inventory sourcing more efficient and transparent, ACV’s inspectors come to the dealership to conduct contactless inspections for condition reports that are more thorough than the industry standard. These condition reports are attached to each car being auctioned and give buyers full confidence in what they are buying without needing to be physically present at a traditional auction, and in turn provides sellers a lightning fast method of inventory liquidation.
Digital Auctions: Ramp up or divest inventory quickly, safely and smartly
The COVID-19 pandemic and its impact on dealers has revealed a deep-seeded need for faster and more flexible ways of doing business. Now in just 20 minutes, dealers can accomplish at an online auction what might have taken a few hours at a physical auction lot. In June alone, ACV Auctions facilitated the sale of more than 40,242 vehicles with nearly a 75% sell-thru rate – the single-largest sales month in the company’s history.
Online auctions happen quickly, but the dealer has more data available at their fingertips than ever before. The comprehensive condition reports include dozens of visuals and video for informed decision making. ACV’s industry-leading offerings include Virtual Lift™ scans that provide a bumper-to-bumper image of the vehicle’s typically inaccessible undercarriage and AMP™ (Audio Motor Profile) recordings of the vehicle’s engine. Filters and alerts within the online auction platform allow for detailed searches that help dealers better target vehicles that match their inventory needs.
Digital Retailing: Provide consumers the confidence they need to transact digitally
A digital-first retailing approach for dealers enables them to provide greater transparency to consumers, offering necessary confidence to make informed purchasing decisions. Vehicle description pages (VDPs) that offer robust vehicle information and data results in consumers spending more time on the VDP gaining better insight into the condition of the vehicle and more confidence in making an online purchase. VDPs that have ACV Auctions’ True 360 Reports detailing not only the vehicle condition, but also any accident history and severity of the damage, hold consumers’ attention up to 4X longer. This helps consumers trust that the dealer is providing them with the most accurate information on the vehicle. Dealers are keenly aware of the importance of creating an authoritative digital experience as consumers look to minimize risks associated with making a physical retail visit.
For more information on ACV Auctions, visit acvauctions.com.
Originally posted on F&I and Showroom