ZACH: Hello, It’s Zach here and today we have on the podcast today Nathan Fox who is the Senior Director of Business Development for Cox Automotive’s Inventory Management Solutions brands which include vAuto and Kelley Blue Book and their instant cash offer tool. In this role, Nathan leads the development of all inventory merchandising solutions. His primary focus is helping dealerships grow their business by having all the data and tools they need to
ensure their inventory investments pay off. Thanks so much for joining the podcast today Nathan.
NATHAN: Thanks for having me, Zach.
ZACH: So let’s get started and for those of us listening, talk about what exactly you do at Cox Automotive and how you got involved in the auto business?
NATHAN: At Cox Automotive I lead our strategy and development of products and solutions within the inventory merchandise and space. We are focused on bringing data and tools to dealers to help them more effectively merchandise and promote their vehicles to consumers and shoppers. My path maybe a little less traditional to the automotive space. I spent over 10 years in the consumer goods industry working for Procter & Gamble and Kimberly & Clark but I think it’s been a really interesting transition because my tenure during the consumer goods there was when e-commerce was really rising to become a dominant channel and so I had to think through, “How did you make offline content available to consumers shopping online?” And all that transition that I did is really remarkably parallel to what’s going on in the automotive industry today. Shoppers are pivoting the shopping journey to be digital.
ZACH: Talk about the used car inventory marketplace in Q1 of this year, and what you have observed from your lens at Cox Automotive?
NATHAN: I think probably what you’ve seen is the same we’re seeing Zach, which is a really tight supply on the used car market obviously prices are up. I think in march it was 20%+ increase in used car pricing vs last year. We’re continuing to see tight supply, high prices, at the same time I think if you contrast that with the consumer demand. We’re not seeing it really damping consumer demand in meaningful ways. We were seeing a relatively strong recovery in sales in used cars. A really interesting market right now between tight supply but a strong demand.
ZACH: The current inventory shortage is arguably the biggest challenge facing most dealerships right now. Your team doesn’t produce inventory, but as I understand it, you’re working to help dealers sell the units they have at the best possible price. Tell me more about that connection between merchandising and the inventory shortage?
NATHAN: Zach, you know I often think that regardless of the market dynamics, there’s a connection between the products, the dealer has on their lot, the way they priced them, and the way they merchandise them. And when a dealer does a great job of connecting these together, they’re able to optimize in the return they get on every one of those vehicles. I think in the used car market today where there’s a short supply. I think a lot of dealers are forced to bring inventory perhaps that is outside their comfort zone or may not be their target strategy of inventory and so for those dealers who really think about their price in the merchandising strategy relative to each of those vehicles is really really critical because they may have a different product mixed in what they’re accustomed to because of that short supply.
ZACH: Why is inventory management software so crucial for dealers, especially during these times?
NATHAN: That’s a great question, Zach. I think inventory management software provides a lot of functionality for dealers. It really helps connect all aspects to their business and so when you think about from the acquisition of the inventory to how you price it, how you recondition it, and then how you merchandise it. It connects those pieces and so in a market like today where that inventory is really tight, understanding what inventory should go out and get and then how you move it from acquisition through to frontline and then sell it. It's more crucial than ever and so a solid inventory management platform like vAuto gives you the functionality to do all those tasks within a single environment.
ZACH: What are your predictions for the rest of 2021 for the used car market?
NATHAN: I think all sides are pointed to continue to be a pretty tight market for the rest of 2021. Obviously, with some of the shortages on the new car side, that’s continuing to create more demand in the used car side. So when we look at the cascading effect of that and then obviously the consumers are somewhat flushed with cash right now creating a lot of demand for used cars between stimulus checks, people having saved more money over the last year. We’re seeing a strong demand which is then exasperating in that shortage of supply. We think that it will continue for the bulk of 2021. We get that sentiment from most dealers as well. Very few dealers believe that they’re gonna get their inventory back to levels that they saw prior to the pandemic. I think the independent side is a little less rosy. Less than a third of dealers believe those they’ll start to see their levels in inventory at historic peaks. Franchises are a little more optimistic but it’s still below half.
ZACH: You recently announced a new imaging tool that’s been incorporated directly into vAuto’s new and used car inventory management platforms. Explain how this technology works and why it’s valuable to dealers especially in used car dealerships?
NATHAN: We’re really excited about the launch of SnapLot 360 technology in vAuto. We brought that to the market earlier this month and it is an application that allows dealers to walk around their car, capture a 360 spin and then it automatically extracts the exterior images of that car and creates a video with a professional voiceover. So kind of in a one pass the dealer gets really engaging media for that vehicle. It’s then automatically visible in the vAuto inventory manager platform and syndicates out to the dealer's website, Autotrader, etc. and so for a standpoint of used vehicles, consumers really want that transparency, what are they getting, they wanna know the specifics about that car and so having a more interactive experience is really really viable as their doing more shopping online.
ZACH: Is this technology or functionality unique in the marketplace?
NATHAN: Zach, there’s some other 360 products out there. I think what makes ours really unique is the integrations we’ve built like I mentioned. It's fully integrated with vAuto and we know that 8 out of 10 dealers prefer to have one system to manage their inventory and merchandising workflows. You alluded to that question earlier and so we think that integration is really valuable to dealers. And the second one is, it’s the only 360 product that integrates with Autotrader. So when you look at one of the largest used listing platforms out there and the ability to get that engaging content in front of the shoppers, it’s a really strong way to drive consumer engagement.
ZACH: Who uses it within the dealership and how is it making their job easier and generating better results for the dealership?
NATHAN: As we built the tool we really thought a lot about how we make this easy for really anyone capturing photos at the dealership to use it and as I mentioned it’s a simple walk-around process. The application has photo guides to help any user capture a really compelling 360. Anyone that’s at the dealership taking photos or any other media at the car can use the tool. Then obviously once the content is uploaded into vAuto, any stakeholder who’s in the vAuto system has visibility to that and can see what’s been captured, what’s been produced and so it really allows many people within the dealership to see the content and engage with it.
ZACH: Why was it important to bring Snaplot360 into the vAuto Provision and Conquest platforms now?
NATHAN: I think first and foremost is what consumers are demanding today and so as the market-leading inventory management platform in vAuto, we know that consumers are looking for more transparency, more visibility, more content as they’re shopping online and so we wanted to make sure that all those dealers that use our inventory management platform had access to those tools. The second as I mentioned previously, you know I think that’s becoming more mainstream, more part of what consumers expect. I think that integration to create that single workflow was really important for the Provision & Conquest users.
ZACH: What else does Cox Automotive, specifically in your department, have coming down the pipeline in 2021?
NATHAN: Zach, you know we don’t always share the things before we launch them but I’ll just say we are looking to do lots of innovation within the merchandising space as it relates to vAuto. As I said earlier, that mix between product, price, and merchandising is really the way for dealers to maximize the profitability of their vehicles. We’re looking to bring more and more functionality into the platform that helps dealers to work across this level side in a simple and uniform manner.
ZACH: And what differences have you seen from dealers the way they used vAuto tools pre-pandemic to now in 2021?
NATHAN: You know one of the great things about vAuto Zach is it has so much functionality in it that we see dealers leaning into different parts of that functionality and so within vAuto we have a product called Stockwave that helps dealers to identify and then purchase vehicles at auction and aggregates information from multiple auctions. We’ve seen a tremendous amount of utilization of that tool in the last number of months as it’s really helped from an inventory supplies standpoint. It’s been great to see dealers find some of those things that perhaps they didn’t have to rely as much and really lean into some of the functionality that is invented within vAuto.
ZACH: What’s it like to implement SnapLot 360? Let’s say a dealer already has vAuto, what would be the next steps?
NATHAN: Well obviously the first step is to reach out to whether it be a performance manager that they’re already working with, reach out through any of our other contact information to get a demo and understand our product. Then one of the things that we really pride ourselves on at vAuto is support and implementation in performance management teams and so those teams have a full training to check, list plan to get dealers set up, make sure they’re capturing the 360s appropriately and don’t have any questions and are comfortable using the tools.
ZACH: As we come to a close, what final advice do you have for a dealership who’s starting to rethink their approach to merchandising?
NATHAN: I think as a dealer who’s starting to rethink about merchandising, they should think about what the consumers are gonna need to make certain steps in the journey and as they’re doing more things online, most dealers that we talked to have added steps that could be completed online to really stop and think about what information they provided to the dealer to support that when they’re in store and then think about how they provide that through merchandising platform so the consumer could effectively complete those tasks online.
ZACH: Well I think it’s been a great episode and excited about the launch for SnapLot 360. Nathan thank you so much for coming on the Used Car Dealer podcast.
NATHAN: Zach, I really appreciate you having me and have a great rest of your day.