Digital transformation has been a major focus for everyone ever since the computer and ai age came to dominate all aspects of life. Mark Endras, president of TradeRev, tells us why that is especially true of the automotive industry – perhaps more so than in most others.
Digital transformation and rapid adoption of digital tools across multiple industries over the last year have been impossible to ignore. Due to the onset of physical restrictions in almost every location on the planet, digital solutions to previously analogue problems have never been more suited to the time.
When it comes the buying and selling of automobiles, this has been the culmination of a long spell of innovation.
NO INDUSTRY HAS BEEN IMMUNE TO DRAMATIC SHIFTS IN BUSINESS PRACTICES IN THE PAST 12 MONTHS. HOW HAS DIGITAL TRANSFORMATION IMPACTED THE MOTOR INDUSTRY?
Historically, wholesale auto auctions have primarily been an in-person business, with customers bidding on vehicles as they are driven through the auction lanes. While TradeRev and our parent company, KAR Global, were well down the path to a fully digital future, the onset of the pandemic rapidly accelerated those plans.
Just one year ago, over a two-week period, KAR Global went from just 58 percent of our transactions happening via digital channels to 100 percent. The result of the pivot was mass adoption across the industry of digital tools like TradeRev – but it’s not temporary.
Our fully digital model has proven so durable and effective — not to mention safer — for both buyers and sellers that, in August 2020, KAR announced it will remain 100 percent digital, with no plans to return to driving cars through physical lanes.
A LOT IS SAID ABOUT THE ENDLESS BENEFITS OF A MOVE TOWARDS DIGITAL TRANSFORMATION. HAS THAT PLAYED OUT IN YOUR SPACE? WERE THERE ANY HICCUPS ALONG THE WAY?
It’s no secret that the wholesale used car industry has been slow to adopt new technologies and embrace the digital evolution transforming the rest of the world. But that’s exactly what we set out to change when we started TradeRev.
Like every new technology, there was a learning curve. For a long time, there was a very uniform process for buying and selling wholesale: you went to your local auction on a specific day and bought what was available at that time and place. Then, suddenly, TradeRev came along, and you could now buy and sell from your computer or mobile device at any time and from anywhere.
As time progressed and we continued to grow and innovate our product, more and more dealers realized the benefits of doing business digitally. Buyers gained access to a previously unimaginable level of inventory across the country, and sellers could now tap into a coast-to-coast network of dealers eager to purchase their vehicles.
Simply put, we expanded our users’ marketplace across the country while making wholesale fast, fair and easy.
HOW DO YOU SEE THIS PACE OF CHANGE CONTINUING IN THE NEAR FUTURE?
We’ve seen exceptional growth in the number of users and vehicles sold on TradeRev over the past year, and it’s clear that our platform – and digital dealer-to-dealer marketplaces in general – will continue to grow. The key to the future is continuing to add value for our userbase by giving our customers a 360-degree tool for their business through integrations.
When it comes to auto remarketing, dealers don’t just want an information service, an auction, a financing company and a transporter – they want it all in one place, all within a few clicks of a button. The transaction doesn’t start at the first bid, just like it doesn’t end when the auction is won; there are so many different touchpoints that some companies neglect.
THE LAUNCH OF TRADE-IN AT HOME IS SOMETHING THAT COULD WELL REMAIN EVEN AFTER SOCIETY RETURNS TO SOME FORM OF NORMAL FOOTING. CLEARLY THIS IS A BENEFIT TO INDIVIDUALS BUYING AND SELLING VEHICLES, BUT HOW DOES IT PLAY OUT FOR THE GENERAL TRADE?
Knowing the trade-in value can be stressful for the average person. We really wanted to make the process as easy as possible. It starts with the customer receiving a link from the dealer to upload photos and the vehicle’s information from the comfort and safety of their own home – without ever stepping foot in the showroom.
The dealer will then launch the vehicle to a live 45-minute digital auction that leverages TradeRev’s network of thousands of dealers coast-to-coast who bid on the car. This provides a hassle-free, no-pressure, true market value of the trade-in vehicle.
ARE THERE ELEMENTS OF CHANGE IN THE AUTOMOTIVE INDUSTRY THAT YOU FEEL COULD BE APPLIED TO OTHER INDUSTRIES TO THE BENEFIT OF TRADE, AND OF SOCIETY IN GENERAL?
Sure. One of the trends we’re seeing in automotive that has broader applications is the movement toward more transparency – particularly in the trade-in process. Transparency builds trust, and it also helps quench consumers’ thirst for more information so they can make an informed decision.
Similarly, another big trend we’re seeing in automotive is the removal or reinvention of inefficient steps in the wholesaling process. Every industry should be thinking about opportunities for process improvement that help make things faster and easier.
ONE OF THE PILLARS OF DIGITAL TRANSFORMATION IS THE COLLATION, UNDERSTANDING AND USE OF DATA. HOW HAS THIS DEVELOPED IN TRADEREV’S OPERATIONS?
At TradeRev we’ve always been focused on using technology such as AI and machine learning to leverage data to help streamline our users’ experience and enable them to make smarter decisions.
For our sellers, we’ve created features such as H-Vision, which analyzes real-time mobile device camera video frames and systematically classifies them to fill out the vehicle’s condition report. We’ve also developed an AI-powered pricing tool that uses a vehicle’s details and condition to recommend a base price (at market value) for the seller to set on their vehicle.
From a buyer’s perspective, we’re able to use predictive analytics to recommend vehicles to users based on their purchasing habits. Once they’re ready to bid on a vehicle, we’ve created a tool called bid assist, which uses market data to recommend an appropriate starting or incremental increase on their bid.
These are just a few examples of how we’re harnessing data through technology to enable our users to work faster and be more successful.
WHAT DO YOU HOPE TO ACHIEVE AT YOUR MASTERCLASS AND ROUNDTABLE DISCUSSIONS AT COLLISION THIS YEAR?
Over the last few years, we’ve been working tirelessly to totally revamp TradeRev, but even the thought of overhauling a mobile app can be daunting. A lot of people simply don’t know where to start, let alone everything that goes into a massive undertaking like this.
We decided to focus our masterclass on our journey so that attendees can gain first-hand knowledge of how to continually analyze, innovate and, in some cases, reconstruct an app to ensure you’re building for the future.
TradeRev will deliver a masterclass at Collision this month.
Read the article on collisionconf.com.