By Nathan Cooper
Today I wanted to do something different and share a discussion held between myself, Nathan Cooper, Product Marketing Manager, and John Law, the Data and Insights Director here at REALtime Communications.
We will be talking about how automotive analytics can help automotive retailers price their vehicle stock correctly.
Nathan: John, can you tell us a bit about how automotive analytics can help automotive retailers with their pricing strategies?
John: Absolutely. One of the biggest challenges for automotive retailers is determining the right price for their vehicle stock. With so many factors to consider, such as make, model, age, mileage and location, it can be a daunting task. However, by leveraging automotive analytics, retailers can make data-driven pricing decisions that are more accurate and informed. This helps to speed up the process and gives retailers confidence that they are not leaving money on the table – especially in today’s volatile used car market.
Nathan: That’s great insight. Can you give us some examples of how automotive analytics can be used to make more accurate pricing decisions?
John: Sure. Let’s take our REALinsights Stock Module as an example. We connect the retailer’s stock, either directly from the DMS or other stock files, and compare it directly against Auto Trader’s data set of millions of used vehicles.
This tool uses this real-time data to analyse market trends and pricing patterns, allowing retailers to adjust their prices based on demand and supply. For instance, if a particular make and model is in high demand, the tool can suggest raising the price to maximise profit. On the other hand, if a certain model is oversupplied, it can recommend lowering the price to move the inventory quickly.
Within the REALinsights Stock Module, we build a full pricing strategy that can be automated, speeding up that process further as well having clear visualisations of all stock currently held.
Nathan: That sounds very useful. How can retailers integrate these tools into their operations?
John: It’s simple. REALinsights is available to all automotive customers that are existing REALtime Communications customers. If you are a retail group we don’t currently work with, we can get you set up and give you access to our online platform powered by Microsoft Power BI in no time at all – all you need is an Auto Trader Accelerator Licence in place to access the price data.
Once set up, we work with the dealer to implement their pricing strategy in the system and set up any automations the retailer needs.
The tools are user-friendly and provide actionable insights straight away to help retailers optimise their pricing strategies.
I’d like to add that these tools are not just useful for pricing decisions, but also for inventory management. By monitoring market trends and supply/demand patterns, retailers can adjust their inventory mix to better reflect customer preferences and maximise profitability.
We saw that in Q1 2022, across the AM100 dealer groups, used cars were under-priced by £36 million pounds. This was a huge sum that could have been on retailers’ bottom line and something that a tool like REALinsights helps to prevent.
John: We see very quickly that the average days to sell a vehicle starts to reduce, as the vehicle is priced at the correct market rate from day one. We also see revenue and GPPU increase as well, as retailers have a closer handle on the stock mix at their dealership and are not missing out on vehicles that jump in price as demand changes.
Nathan: What impact is this having on retailers’ operations?
Nathan: Thanks for all the info, John. So, in summary, automotive analytics can help retailers make more informed pricing decisions, optimise their inventory mix and improve their online performance. Thank you John for sharing your insights with us today.
John: That’s easy, they just need to contact us directly via the RTC website, www.rtcauto.co.uk/realinsights-demo. One of the team will contact them to arrange a no-obligation demonstration.
Nathan: If a retailer wants to find out more, what do they need to do?