Big Data Analytics, AI, VR and Block Chain – What Latest Tech Trends Mean for Car Dealers

While technology has transformed nearly every industry over the past 25 years – entertainment, travel, banking, medicine and more – disruption has been more incremental in the auto sector. But beginning with embryonic online car-shopping 20 years ago to the development of autonomous vehicles over the past decade to the wholesale shift to home delivery by dealerships due to coronavirus in 2020, it’s obvious the auto industry isn’t immune to tech-driven change.

Auto dealers have new tech tools to make selling vehicles more efficient, increase customer satisfaction and boost productivity and profits. The trick is understanding these new technologies, their benefits and how they can enhance your business before your competition does and gains an edge.

Turning Data into Dollars

Big data analytics is a tech buzzword that’s been bandied about for years, but an easy way to understand its impact is to consider companies such as Google, Facebook and Twitter that turn data into dollars. While you’re certainly not going to create a new search engine or a social network, you can use data analytics to improve your sales prospects and add to your bottom line.

Simple ways dealers can leverage data include accumulating detailed customer information to provide an efficient and personalized shopping experience that increases retention or determining whether shoppers have searched a dealer’s website for certain engines and then offering them vehicles with specific horsepower. Dealers also can use in-house data to easily chart progress toward automaker sales-incentive goals and to determine when the market has softened and more spending on marketing may be needed.

Because car dealers aren’t data experts, artificial intelligence (AI) solutions provided by automotive-specific suppliers can be used for more in-depth data analysis. AI examines elements specific to a dealership – market demand, vehicle supply, sales history, competition – that can be overwhelming for even an experienced data professional trained to identify patterns to comprehend

AI scrutinizes online activity and other data to pinpoint customers who are more likely to make a purchase and alert a salesperson about models they’ll be interested in the most. For example, AI software can determine the specific vehicle photos shoppers clicked on or even whether they viewed pickups with, say, less than 40,000 miles (64,000 km), and searched features such as all-wheel drive.

AI can spot car-buying patterns for a given ZIP code down to vehicle make and model and allow dealers to determine where they are gaining business or losing it to the competition. AI also will help dealers customize banner ads, email campaigns and other marketing efforts to target customers with specific vehicles and deals that data shows they’re attracted to.

VR – Not Just for Gaming

Virtual reality (VR) was first adopted by gamers and now is used prevalently in design and engineering. Auto dealers can employ VR to provide a more immersive car-shopping experience by displaying a vehicle’s features and options in an interactive way and allowing consumers to explore a range of models, colors and trim levels.

Using VR, shoppers can conduct virtual walkarounds by spinning a vehicle 360 degrees to view it from all angles and even experience what it’s like to be in the driver’s seat. Shoppers can explore vehicles and options for as long as they want and interact with vehicles that are not available at the dealership itself – anywhere they have a VR headset available, whether in the showroom or at home.

With VR, potential customers can view the complete inventory the dealer features in a virtual library, even if the vehicle needs to be special-ordered. This allows shoppers to bypass the time-consuming and sometimes stressful process of visiting a dealership, gives them more options and helps solidify their choice before ever entering a showroom or talking to a salesperson.

Blockchain Eases Business Transactions

Blockchain, the technology behind bitcoin and other virtual currencies, is an open, distributed ledger used to electronically record transactions efficiently and in a verified, secure and unalterable way. While blockchain seems complicated, the concept is straightforward: a constantly updated register of records or linked “blocks,” secured by cryptography, with each containing a timestamp and transaction data. For security and transparency, once recorded the data in any given block cannot be retroactively altered without modification to adjacent transactions.

For auto dealers blockchain can streamline cumbersome vehicle documentation and help eliminate fraud. Instead of multiple forms for registration, blockchain can instantly connect all parties – the buyer, seller, government agencies and third-party VIN and insurance databases.

Blockchain allows dealers to put used vehicles on the market faster using verified data, without waiting days for confirmation of the title transfer from the seller, saving time and money. The technology also can be used to more efficiently obtain VIN-specific data such as service and ownership history, providing dealers with comprehensive information to more accurately assess used-car valuations and make it easier to assign trade-in values.

Blockchain also makes warranty information more easily available, while extended-warranty registrations can be more securely tracked and total-loss vehicles traced in real time instead of over days or even weeks. When blockchain is used to record each vehicle component’s origin, owners are guaranteed quality when ordering replacement parts and can get precise notifications when their vehicle is subject to a recall.

Catch the New Tech Wave

Of course, learning and trusting a new technology and process takes time and personnel need to be trained. But once up to speed, these technologies allow dealerships to operate more efficiently, better allocate personnel, improve pricing and inventory choices and sell vehicles faster.

While no one can predict which new technology is here to stay, history has shown that once innovations are widely accepted, there’s no turning back the clock. After all, few people still go to a bank branch to conduct routine financial transactions – or want to trade their smartphone for a landline.

The automotive world is changing rapidly due to technology, and so is the business of selling cars. While constant waves of new technology can feel overwhelming, dealers that prepare and position their business to correctly sort through and tap into the power of the latest tech trends can ride them to success.

This article is sponsored by

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