In the rapidly evolving automotive industry, data is touted as the new gold. Yet, a recent study by Cox Automotive reveals that while data insights can significantly benefit heavy users, most dealers are still grappling with data-related challenges. The 2024 Power of Data study sheds light on how franchise dealers and their management teams use data, and the hurdles they face in making it actionable.
A Tale of Struggle and Opportunity
Despite the potential of data to transform business operations, a staggering 70% of dealers reported that delays in real-time customer, lead, and vehicle data make data-driven insights less useful. Furthermore, 54% of dealers have experienced conflicting data from multiple sources, leading to confusion and inefficiency.
“Seven out of ten dealers told us that lags in data reduce the usefulness of their insights. This, combined with conflicting data, diminishes confidence and means opportunities to improve efficiency and customer experience are often missed,” said Chase Abbott, VP of Sales at Cox Automotive. “However, with challenge comes opportunity. An omnichannel approach is the best strategy for dealers to truly capitalize on the power of data.”
Key Findings from the Study
- Access vs. Satisfaction: While 83% of dealerships have access to data insights through dashboards or reporting tools, less than one-third are satisfied with the insights they receive from vendors.
- Data Conflicts: Over half of the dealers (54%) have encountered conflicting data across multiple sources, complicating the accuracy and reliability of the information.
- Vendor Reliability: 69% of dealers are likely to stop using a vendor if they cannot provide reliable access to customer or lead data.
- Privacy Concerns: Data privacy and compliance remain significant concerns, with 66% of dealerships worried about ensuring these aspects when adopting new tools. Moreover, 44% have delayed adopting new data solutions due to these fears.
Best Practices for Heavy Data Users
Heavy data users in the study highlighted several best practices to combat data lag and improve the utility of data insights. Implementing tools that update in real-time can synchronize every department—marketing, sales, fixed operations, and the back office—with customer activities at every step.
AI-powered automation is another key strategy, enabling dealers to eliminate guesswork and use predictive insights to determine the most actionable data. Conducting regular audits of vendors can help prioritize which shoppers to follow up with next, focusing on the quality and frequency of data updates.
AI: The Game-Changer
“As dealers explore using data for their current and future needs, AI has proven to and will continue to have a profound impact on dealer and buyer connections,” Abbott emphasized. “AI can pull data and insights together to provide a new level of intelligence and analytics the industry hasn’t seen before. Data is worth doing right. With high-quality, accurate, and secure data delivered in real time, dealers can unlock powerful insights that improve customer satisfaction, employee satisfaction, and profits.”
To delve deeper into these insights, dealers and industry professionals can download Cox Automotive’s new eBook, The Three Biggest Data Challenges in Automotive Retail, available at Cox Automotive.
About Cox Automotive
Cox Automotive is a global leader in automotive services and technology, harnessing a vast array of first-party data generated from 2.3 billion online interactions annually. The company’s solutions cater to car shoppers, auto manufacturers, dealers, lenders, and fleets. With over 29,000 employees across five continents, Cox Automotive’s portfolio includes prominent brands such as Autotrader®, Kelley Blue Book®, Manheim®, vAuto®, and Dealertrack®. As a subsidiary of Cox Enterprises Inc., Cox Automotive continues to drive innovation and efficiency in the automotive industry.
For more information, visit Cox Automotive or connect via @CoxAutomotive on X, CoxAutoInc on Facebook, or Cox-Automotive-Inc on LinkedIn.