CBT News: Inside Automotive with Rusty West – January 2022

CBT News: Inside Automotive with Rusty West – January 2022

“As auto makers continue to scale back on rebates and incentives for consumers, how profitable does that leave the dealer? On this January 2022 episode of Inside Automotive, Jim Fitzpatrick interviews Rusty West, president & CEO of Market Scan Information Systems, to discuss rebates and incentives in the automotive industry.”

For additional information, articles or interviews please contact:
Market Scan at info@marketscan.com

Market Scan was founded in 1988 by Father-Son team Russell and Rusty West with a single vision: build a world-class desking platform to fit every customer’s financing and leasing needs like a driving glove while returning the highest profit margin possible to the dealership.

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Market Scan Information Systems, Inc.

 

OEMs’ Rebate Spend During a Time of Reduced Inventories

OEMs’ Rebate Spend During a Time of Reduced Inventories

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Just because you’ve lowered rebates doesn’t mean you’ve solved the problem

For everyone involved in the automotive industry, 2021 continues to be a very interesting year where the only constant is change. We all know the story by now; consumer demand is high, inventory is low.

But there are other stories happening in the background, such as the rising level of average prices on vehicles, the decreasing level of rebates, and the consumer’s growing frustration over being quoted one price online and a different price at the store.

To be certain, average prices are going up. According to Kelley Blue Book, the average transaction price through July 2021 reached a never-before-seen high of $42,736, marking an 8.2% increase over July 20201.

Manufacturers have pulled back rebates

Because of reduced inventories, manufacturers have pulled back on rebates and incentives. In fact, rebate offers for most segments have continually declined over the last several months. What’s more, actual program offerings or sub-vented lease programs have remained completely flat across all segments. We’re witnessing the dynamics of supply and demand amplified by American consumers’ savings and inability to splurge on vacations and other discretionary spending opportunities since the start of the pandemic.

Consumer savings in the United States exceeded a staggering 2.4 trillion U.S. dollars at the end of 2020. Even though the personal savings rate has since dropped and amounted to 8.9 percent at the end of September, 2021, it still means that Americans households have stockpiled excess savings, setting the stage for a surge in consumer spending.

New market dynamics – outdated business practices

What’s worth calling out – besides from manufacturers having pulled back on rebates – is the fact that the process they apply to determine their rebates and incentives remains largely manual. Additionally, the reduction of rebates doesn’t solve the problem manufacturers, lenders and dealers have: In order to create an improved modern retailing environment and consumer experience, they must eliminate the disconnect that persists between what consumers are being quoted online compared to what they are presented with at the store.

Outdated business practices don’t have to prevail and the consumer should not have to endure a disconnected shopping experience. Simply put, they no longer have to. Solutions have been conceived, and are currently available, which are the result of combining science, technology, and data. Manufacturers can determine with precision, what incentives and rebates are needed to achieve the most competitive position based on live competitor and market data. And retailers can take advantage of the modern retailing solutions available, which provide consumers consistent and all-inclusive payment quotes – irrespective of where the consumer shops – seamlessly connecting the consumer experience online with the showroom experience.

Injecting science into more accurate rebates

Manufacturers spend 40+ billion dollars each year on incentives to influence consumer buying behavior to achieve a desired market penetration. Traditionally, the car makers go through a labor-intensive process to analyze the data related to the effectiveness and impact of the incentive and rebate programs they are offering. This is done to determine how best to position themselves competitively – and to determine how much they must spend to earn their desired market share.

The process is time consuming, mechanical and unsophisticated. Decisions are often made on gut instinct – without having all the facts. Not only is this very expensive (and seldom accurate), it is also not timely and provides openings for competitors to step in and win market share.

Almost every dealer in the country has experienced an inability to collect rebate and/or incentive monies from their manufacturer because of misapplication or improper combination of rebates. When this happens there are two options: Rewrite the contract, which always upsets the customer, or take the difference out of the gross.

The data and technology platforms needed to overcome this are available, all of which will greatly enhance the consumer experience. Manufacturers, lenders and dealers can now be seamlessly tied together in a complete system that offers a portal and a dashboard containing all pertinent data necessary to build, offer and transact. This technology includes a solution that mines, analyzes and manages the billions of combinations and iterations of all lender and manufacturer programs available in the marketplace.

Helping dealers remain profitable

This process also helps dealers remain and improve profitability, since it takes into account each dealer’s specific terms and conditions under which the dealership is willing to transact. The process also includes every parameter, policy, factor and rule that influences an automotive transaction – and all terms and conditions that are uniquely set by the dealer, including quoting rules for each specific vehicle in the dealer’s inventory. By leveraging all uniquely identifiable terms, conditions and all pertinent data, dealers are empowered to provide consumers with all-inclusive, fundable, transactable and defendable payments for every vehicle and every consumer scenario online and subsequently in the showroom.

We all know the story in automotive today – healthy consumer demand, low inventory and higher prices. With the right data, technology and transactable payment offers, everyone in automotive wins by truly leveraging the right modern retailing process, where the consumer enjoys a frictionless and much improved, consistent experience online and in the showroom.

About The Author: Rusty West is President & CEO of Market Scan Information Systems and has more than three decades worth of experience developing leading data and technology-based solutions for the automotive industry. For more information, please visit www.marketscan.com 

1: https://www.cbtnews.com/july-vehicle-prices-hit-all-time-high-while-incentives-vaporize/  

2: Bureau of Economic Analysis, https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=3&isuri=1&1921=survey&1903=76#reqid=19&step=3&isuri=1&1921=survey&1903=76 

 

 

 

For additional information, articles or interviews please contact:
Market Scan at info@marketscan.com

Market Scan was founded in 1988 by Father-Son team Russell and Rusty West with a single vision: build a world-class desking platform to fit every customer’s financing and leasing needs like a driving glove while returning the highest profit margin possible to the dealership.

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© 2022 All rights reserved.
Market Scan Information Systems, Inc.

 

2021 Digital Marketing Strategies Conference

2021 Digital Marketing Strategies Conference

The Digital Marketing Strategies Conference is a high-level executive planning event, designed to assist automotive dealers with creating a market-dominating digital marketing strategy for the year ahead. Held annually, this event brings the top thought leaders from the automotive marketing industry to beautiful Napa Valley for an intimate conference experience unlike any other.

Watch below for keynote session: The Artful Combination of Science, Technology, and Data is the Keystone to Modern Retailing, between Brian Pasch, founder of PCG Companies, and Rusty West, CEO & President of Market Scan.

 

For additional information, articles or interviews please contact:
Market Scan at info@marketscan.com

Market Scan was founded in 1988 by Father-Son team Russell and Rusty West with a single vision: build a world-class desking platform to fit every customer’s financing and leasing needs like a driving glove while returning the highest profit margin possible to the dealership.

Market Scan Vertical Logo - White

© 2022 All rights reserved.
Market Scan Information Systems, Inc.

 

The Automotive Industry’s Last Mile

The Automotive Industry’s Last Mile

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The proper implementation of “Scientific Data” Represents the “Last Mile” for the Entire Automotive Industry

The concept of the “Last Mile” has been central to the success of many emerging businesses, as well as the transformation of entire industries in recent years.

For example, the term “Last Mile” is used in supply chain management and transportation planning to portray the final part of a journey comprising the movement of people and goods from a transportation hub to a final destination.

The term originated in the telecommunications industry, which faced enormous challenges connecting individual homes to the main telecommunications network.

The Last Mile is a differentiator and helps improve the consumer experience

Amazon.com has perfected the Last Mile as part of a comprehensive transportation network of people and packages from hubs to final destinations and has become a benchmark in business best-practice. Last-mile delivery has seen explosive growth in business to consumer (b2c) deliveries, from e-commerce companies in freight transportation, and ride-sharing companies in personal transportation.

In the world of automotive, data is now the “Last mile”.

Where is the Last Mile in Automotive?

All stake holders in the automotive industry: manufacturers, auto lenders, marketers, retailers and data companies, have built their own suite of technologies to facilitate modern retailing that seamlessly connect online shopping with the showroom. However, it’s the complete, timely and accurate data that represents the industry’s Last Mile. A complete data set intrinsically connects each of the stake holders – correctly – in a central hub, which facilitates a transparent, frictionless and much improved customer experience, regardless of where the consumers are in their shopping journey.

Don’t get me wrong, this industry has had plenty of data for a long time, and a vast majority of this data does a great job of telling you what the trends were 90 days ago. However, all of that data without science is just noise. Now, however, there is a platform that ties together all the pertinent data points necessary to arrive at a scientifically perfect, transact able solution for the customer.

Today, all of the primary areas of the industry have access to the most powerful analytics platforms ever created to make educated, tactical and profitable decisions – all for the benefit of the customer.

Data Isn’t Good Enough; We Need Scientifically Powered Data

The best solutions today are designed to empower and enable retailers to excel in modern retailing, and revolutionize the way manufacturers and lenders work with agency partners and technology providers to construct consumer offerings that win market share – without overspending.

What’s empowering and driving this ecosystem of modern retailing for automotive is a comprehensive database containing every parameter, policy and factor that can influence an automotive sale or lease transaction. A scientifically perfect payment quoted to a consumer is incredibly complex as it must take into account a myriad of critical factors, to include every lender program, every manufacturer rebate and incentive, every municipality tax and fee – and every term and condition, under which each retailer is willing to transact.

You may wonder why we need scientifically-powered data to connect everything. Because today’s consumers are smarter than ever and they have plenty of tools at their disposal that help them make their decisions easier. What’s more, they have more options than ever before to find a car or truck outside of a traditional retailer. It all hinges on artfully combining science and technology with the right data, and this Last Mile of data is now being used to connect shoppers with the right car – at the right price and payment.

It’s no surprise that price and payment negotiation remain among the most important aspects of the car shopping experience for consumers. A recent survey commissioned by Market Scan showed that nearly half of all respondents (45%) say price and payments matter to them the most.

Solving For the Last Mile Disconnect with Consumers

The disconnect between shopping online and the experience at a dealer showroom also remains a major headache for many. In fact, when it comes to online shopping, 49% said they need to restart the entire process when they arrive at the dealership after doing all their homework online, ahead of time. Furthermore, 43% are frustrated that there are still discrepancies between the online offer, and the one they are presented with at the dealership.

Why does this matter? Twenty-one percent of shoppers say they begin to lose trust in their dealer when the discrepancy between the online offer and showroom offer is $50 or less per month. In parallel, 21% said they will actually walk away from the deal if the discrepancy is $50 or less per month, and 48% said they will walk if the difference is less than $75 per month.

This isn’t all the dealer’s fault, by the way. When dealers aren’t seamlessly connected to their OEM and lender partners, or their agency and technology partners don’t use the correct data, the whole system falls flat and the customer experiences the disconnect. What ensues is a scenario in which the offer presented to the customer online, is different from the one they receive in the showroom. And for 48% of these customers, it’s enough to make them walk away from the deal.

It’s time for everyone in the automotive industry to embrace the notion that combining science and technology will enable us to deploy and leverage the right data, so we can all have our “Last Mile” moment that has altogether transformed countless other industries.

About The Author: Rusty West is President & CEO of Market Scan Information Systems and has more than three decades worth of experience developing leading data and technology-based solutions for the automotive industry. For more information, please visit www.marketscan.com 

 

For additional information, articles or interviews please contact:
Market Scan at info@marketscan.com

Market Scan was founded in 1988 by Father-Son team Russell and Rusty West with a single vision: build a world-class desking platform to fit every customer’s financing and leasing needs like a driving glove while returning the highest profit margin possible to the dealership.

Market Scan Vertical Logo - White

© 2022 All rights reserved.
Market Scan Information Systems, Inc.

 

White Paper: Sophisticated Data will be the “Last Mile” for every Company involved in Automotive Commerce

White Paper: Sophisticated Data will be the “Last Mile” for every Company involved in Automotive Commerce

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Every component of the automotive industry has undergone a radical change in philosophy and operation. Today, automotive brands are realizing Scientific Data is the thread that connects it all together. This paper will address why it’s time is to use Scientific Data and how its use will help companies in automotive commerce become more competitive, efficient and profitable.

Key takeaway points:

  • How Scientific Data is reshaping the customer journey
  • How Manufacturers are using Scientific Data to more precisely build incentives
  • How sophisticated data is powering today’s Modern Retailing
  • The reasons why today’s data connects customers with the perfect payment

Learn how to successfully navigate this important transformation.

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Market Scan Information Systems, Inc.