How Big Data and AI Are Transforming How We Buy Cars

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Car dealerships have wondered for years: what type of person makes the best salesperson? As it turns out, it might not be a person at all. In the age of artificial intelligence, the best salesperson may just be a machine.

Eighty-eight percent of buyers use the internet to find information about cars. By the time a customer comes into the dealership for a test drive, they’ve typically read dozens—if not hundreds—of reviews, have made a decision about which make, model, and features they’re looking for, and have a good idea of how much they should expect to pay for these specifications. They know what others have paid for similar cars, and they’ve compared prices across dealers.

That’s all before ever encountering a sales representative. If they do end up going to the lot, half of all customers only drive one car before buying a vehicle, largely because they already did their research online. Some buyers never make it onto a lot at all and just complete their purchase online.

Why People Love Machines

Why do people love searching for cars on their phones and computers? For one thing, it takes the pressure off. A handful of people enjoy the excitement of bargain hunting for a good deal on a car, but many just feel confused and overwhelmed. Between holiday deals, end-of-the-year price cuts, and other promotions, they have trouble determining the “real” price and dread the bargaining game.

This is evident in the reasons people give for shopping online: 61% of all car buyers say they use the Internet to research pricing and 43% say it’s to find special offers. Price is clearly a strong driver, and the price at a dealership can seem subjective and without context. The Internet levels the playing field, giving more perspective to consumers.

The ability to pull and compare third-party data in real time means that customers can get the most up-to-date information on price and availability. Web searches for cars have been around for a long time, but artificial intelligence and big data have made those searches more accurate, more comprehensive, and more custom-tailored to what a customer is seeking.

How Dealerships Can Put Artificial Intelligence to Work

In modern times, leaving a dealership’s website is the online equivalent of leaving the physical dealership. The consequences can be just as dire: once a customer clicks out of a website, a sales conversion becomes less likely.

For this reason, the best way for dealers to handle the increasing importance of online information is to embrace it and make it readily available on their websites. Dealers must do everything they can to give the customer complete information in a convenient interface. If consumers can’t easily find what they want to know, they’ll abandon the dealer’s website and go to a third-party site. They may never return.

Many dealers already realize this, and are rushing to make their websites a one-stop shop. Over 7,000 dealers are currently using CarStory Market Reports, a mobile-friendly interface that walks customers through the search process directly on the dealer site’s vehicle detail pages (VDP). The reports give buyers complete information on pricing, condition, and feature analysis of available cars.

There’s still a lot of ground for dealers to make up: shoppers spend almost twice as much time on third-party websites as they do on dealership websites. The most important step to reducing that gap is for a dealership to provide price validation, as many buyers want to feel that they’ve made an informed decision by consulting guides, data or experts. By validating this need dealers can build consumer trust, engage users, capture leads and close more sales.

A Role for Real, Live Humans

Big data and artificial intelligence aren’t just transforming the sales process for consumers. They’re transforming it for salespeople, too, giving each salesperson an “intelligent assistant” in their pocket.

After all, salespeople at the dealership still have an important role to play: closing the sale. Even when a customer walks in with a set idea of what he or she is looking for, a match that seems perfect online may fall through in person.

A good sales representative will use technology to make sure that an interested customer walks away with the car that’s right for them. With access to so much information, a salesperson can come to the conversation fully armed with data and objective comparisons. When used correctly, AI can be a salesperson’s biggest friend.

About the Author

John Price is CEO of Vast. Prior to Vast, John served as vice president of marketing and business development at Between Markets, which was sold to Inovis. Before Between Markets, John spent 11 years as vice president of marketing and business development at enterprise software company Trilogy, Inc, where he was critical to the company’s growth from $0 to $250 million in revenue. Previously, John was a director of technical marketing at Neuron Data and an AI associate at Shell Oil. John holds a BS in Electrical Engineering from the University of Texas at Austin.

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