Consumers are drowning with information online in their car buying journey. Learn what’s distracting your visitors, how to engage them and proven tactics to keep their attention. Download Storyboard
Last week futurist Daniel Burris, in a blog post, asked folks to visualize a five-drawer filing cabinet.
Then he asked you to think of a room filled with 60 million five-drawer file cabinets.
He states that is the amount of data that Walmart compiles EVERY HOUR.
Wow. So do car dealers NEED that much data? Is it even possible? Let’s start by looking at the QUANTITY of the data. Walmart does well north of a half million transactions a minute. This is made up by mostly fairly cheap transactions by lots of folks buying multiple items… and doing it very often – sometimes every week, or daily or even sometimes multiple times in the same day.
Let’s contrast this with the car business. Most dealers sell a relatively small number of cars. Forget looking at sales figures by the minute, they are often compiled monthly. A car is one of the very largest and most important purchases made by most folks and they do it rarely – often years pass between purchases. This is the complete opposite of Walmart!
It's not the size that matters; it's what you do with it that counts (and, yes, I’m still talking about data). Any military intelligence officer will tell you that information gathering is just the start of the job. Analysis and packaging of the intelligence so that is clear, concise and usable by commanders in their decision making is vital. Huge amounts of data aren't the trick; the trick is to turn it into something useful!
I don’t think concept of big or small is important; so let’s put the big idea of “Big Data” away for a moment. What sort of data does a car dealer need to make important decisions that affect his business? I believe the test of data – and its analysis – is threefold; it needs to be Timely, Relevant and Actionable. If it fails any of these criteria, it is nothing but a distraction. Dealers don’t need bad data (or a poor analysis) muddying the waters. Data that isn’t timely, relevant or actionable blurs the picture. And the last thing a dealer needs is more (bigger) old, irrelevant or useless data.
Burris tells the story of two Canadian electronics retailers.
“They noticed that in all of their stores a purchasing shift had taken place; several specific upscale electronics items that started at about $650 were selling a lot more than the lower price models, which were in the $150 price range. So they started filling the shelves with more of the higher-priced merchandise and greatly reduced the number of lower priced models. Sales in the categories that they made those changes in surged 40% in a very short amount of time.”
“A 40% surge is not bad. And thanks to the real-time data, they were able to know exactly which products they needed more of. There was no guessing involved. They could zero right in on a shift in purchasing and make the changes pay off immediately.”
“Of course, retailers have been doing this for a long time—deciding which products to remove from inventory and which to increase. But it wasn’t done in real-time. It wasn’t done with the pinpoint accuracy that we have today. Thanks to the data that we’re getting in from various sources, retailers can make better decisions faster and increase their bottom line.”
Data (big or small) and its analysis can make a world of difference for any business. This is especially true for car dealers that operate on fairly small margins compared to most retail businesses. The days of a dealer operating with a good “gut” and lots of heart are sadly, over. But the days of relying on your experience, your knowledge AND great data are just beginning!