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Dennis Galbraith

Dennis Galbraith Chief Marketing Officer

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The Standard: Fewer Than 2% of Inventory with No Photos

On any given day, 17-18% of used-vehicle inventory posted online by dealers has no photos. Virtually every dealer realizes the critical nature of photos. If there is no photo showing on the Search Results Page, that listing has very little chance of being selected for the viewing of a Vehicle Details Page. Nonetheless, more than one in six vehicles are standing naked in the face of tough competition.

Even some of the largest, best known dealers have a poor record when it comes to merchandising their vehicles quickly. Last night, Sun Chevrolet had 33% with no photos, Paragon Honda 27%, Galpin Ford 12%, and Longo Toyota 10%. Mighty CarMax did little better than the national average. From a random sample of 10 CarMax stores, the percentage with no photos averaged 16% and ranged from 9% in Burbank, CA to 26% in Charlotte, NC. The point here is not to pick on any store but to point out that the problem is going unnoticed at even some of the finest stores.

The two best stores I've found so far are Texas Direct Auto (6%) and Finish Line Ford (3%). I track Finish Line Ford regularly, because I know they understand the importance of getting vehicles merchandised quickly. On most days fewer than 2% of their vehicles are without photos. I'm convinced that 2% is a reasonable standard for any store. If the vehicles are not merchandised online, then it is not much of an exaggeration to say they are not really for sale, even though the flooring costs and depreciation are in full swing.

Time is the problem. As the numbers below indicate, most vehicles get merchandised eventually. The problem is that it takes too long to get around to it.

Age of Listing                     Percent with No Photos

1 Day                                     87%

2-3 Days                               60%

4-7 Days                               41%

8-14 Days                             29%

15 Days to 1 Mo.                 15%

More Than 1 Mo.              

    5%

Vehicles often wait days or even weeks for merchandising. Commonly, one person is in charge of taking the photos, whether they are an employee or outsourced. When they are not there or unavailable, the vehicles stand naked online and wait. Another problem is detailing and reconditioning. The best stores process nearly every vehicle in just one or two days. Better yet, photos are taken at the time of purchase and later replaced after detailing or reconditioning.  

The solution to both of these problems is simplicity. When the process is so simple anyone can do it quickly and easily, then the vehicles get merchandised the day they come in. When involving human labor, the path to speed is simplicity. Engineers have understood this for over 100 years. Assembly lines break tasks down to their simplest form. Similarly, batch work can be segmented and distributed to specialized teams. But both these systems require volume. Tasks like used-vehicle merchandising, where one person tackles a series of differentiated vehicles, requires automation of the process instructions. Merchandising a pickup truck is different than merchandising an SUV or a sedan. Simplicity is achieved by automating the process instructions to fit the job and allowing the device to guide the person rather than the other way around. This method is similar to a GPS providing specific instructions based on the travel objective. Any number of drivers can follow the directions with little trouble and no need for thinking through the changes when the next objective is different.

The research for this article was done on October 30,2011 using the over 1.3 million cars listing on Cars.com by dealers only. Since the inventory feeds going to Cars.com are generally the same as the majority of feeds going to AutoTrader.com, and website providers, it is a good representation of the industry as a whole. This research can be duplicated at any time using data and filters that are publicly available on Cars.com. Results vary only a few percentage points from day to day. My hope is that this article can stimulate action that will move these metrics over the month ahead. This is not a zero-sum game. When inventory is merchandised faster inventory turns improve for everyone participating in the change.

                

Larry Bruce
Interesting article it creates more questions for me than it answers though. 1. When you say Texas Direct and Finish Line ford had the best were they at 6% and 3% respectively on day 1, or was that over all? 2. When you say these vehicles had no photos was this just on cars.com or was this on the web period? The reason I ask is to find the bottle neck. a. Is it at the dealer process level? b. The inventory aggregator level? c. Perhaps even the cars.com level? If you find the bottle neck you can work on fixing it but you gotta find it first. No doubt that simplicity is key and that is something dealers will continue to struggle with, but there are many layers to this process and you need to be sure they are all as efficient as they can be. Also were there any sales correlations to the number of days until a vehicle was merchandised and the time after it was to sale. That would be an interesting statistic I would think.
Bryan Armstrong
Dennis, A great posextremely valid points. I would (like Larry) love to see this carried out a little further. Also, I've tried posting just 1-2 exterior shots of a vehicle before on day 1 and had success equal to the "out for a bath" photo I now use. I don't believe a few exterior shots answer any questions that GOOD photos do for a consumer. Unfortunately, I'm at 7 days average right now, KNOW where the bottle-neck is and am taking steps to correct it.
Dennis Galbraith
Larry, Texas Direct carries over 1800 used vehicles and only 6% of them have no photos, overall. Finish Line Ford had 3% with no photos last night, but it is usually less than 2%. To achieve those numbers, there can be almost no vehicles without photos after the first day or first three days. There has been plenty of research from AutoTrader.com and Cars.com showing that listing generate more VDPs and contacts when they have photos than when they do not. One of the shortcomings of this research is that stock photos count the same as actual photos, and one or two photos count the same as complete merchandising. I'd like to drill into this further to test additional hypotheses. Right now, we know that having a photo on the Search Results Page is very important, and this research shows that most dealers can and should strive for a higher standard than they are currently achieving with respect to the time it takes to get vehicles merchandised.
Dennis Galbraith
Bryan, I'm thrilled to hear you are addressing the issue! I see your point, one or two photos can improve the conversion from SRP to VDP, but that does not necessarily mean those VDPs are turning into contacts and sales. The call to action is to fully merchandise the vehicle ASAP, preferably the day you own it. You and I are on the same page with that. It used to be possible to filter listings on Cars.com by the number of photos, but not any more. I'd love to do this analysis looking at only vehicles with complete merchandising using actual photos. Obviously, the lag time would be even worse. I went through the inventory on Finish Line Ford. Only a hand full had fewer than their standard 32 photos. There were others with a photo saying photos would be coming soon, which is little better than white space. Nonetheless, FinishLineFord is the best I've found so far. Clearly, less than 2% is doable with the right process. I can't imagine any dealer shooting for average performance when this kind of performance yields so much. Again, I'm thrilled to know you are making a move in this area and not a bit surprised to hear it.
Gary Sanders
Dennis, I feel photos are very important. That is why we take 54+ photos of each vehicle. One thing we do to help manage our process is not making the car live until we have the photos done. (with in reason) If we have a late model trade with low miles, I might place it online with out photos. If I have a trade that needs plenty of recon, I will hold out for a day or two before making it live to your dealer site, Cars.com or Auto Trader. Nothing affects gross like have a laundry list “WE OWE” that is under calculated. This year; with the help of DrivingSales, we sent out a survey to better understand “True Marking Time” http://www.drivingsales.com/blogs/garysanders/2011/04/26/true-marketing-time The questions were not designed to argue if a car should be place online right away with or without photos, but to determine how much "online" marketing time that could be considered as wasted. AutoTrader and Cars.com rewards dealers with “Newly Listed” cars with dealers wasting this free advertising by “letting the vehicles stand naked online and wait”. I agree with Larry in the fact that dealers can push inventory hundreds on times a day, but its up to the third party site to accept feeds more than once @ 3AM Central time.

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