AutosPlus2017: Meet Allison Nau of Cox Automotive Data
28 Sep 2017
Allison Nau helped launch and now leads Cox Automotive Data Solutions. Working out of the company’s U.K. office, Nau crunches data from multiple Cox-owned platforms, including classified platform Motors.co.uk, Manheim Auctions, Cox’s digital marketing division Modix, dealer management system Incadea, customer retention software vendor Xtime and NextGear Capital, Cox’s provider of finance services to dealers.
There’s no shortage of data for Nau to make sense of: Every year, Cox sees more than three million retail listings and nearly half-a-million wholesale transactions. Moreover, Cox has records of more than three billion consumer searches.
In our latest profile of the key speakers to present at the AIM Group’s AutosPlus2017 classified conference in London in October, we asked Nau to talk to us about the challenges and opportunities she sees in the U.K., particularly through her unique Big Data goggles.
The recently announced scrap schemes by manufacturers, which allows consumers to trade in old diesels for new cars (realizing significant savings) is sure to have an impact. For classified marketplaces, all of these changes will impact the mix of stock.
Will there be more diesel supply than demand and not enough petrol stock? Will prices for diesel vehicles drop? So far, the data says that hasn’t happened in the used-car market. But, the changes we’re seeing today will persist in the used-vehicle marketplace for the next five to six years.
So far, the data says that hasn’t happened in the used-car market. But, the changes we’re seeing today will persist in the used-vehicle marketplace for the next five to six years.
Brexit is also causing a lot of economic uncertainty and that will have an impact on new cars – for example, what will the tariffs be post-Brexit?
We see a lot of changes in automotive classifieds. What are the most interesting developments worldwide you’ve seen so far?
There’s a business in the U.K. called CarWow that flips the model for purchasing new cars on its head. You type in the details of the car you want and multiple dealers bid on that opportunity. They may quote you different prices for the identical new vehicle. You select which dealer to purchase the vehicle from, after seeing ratings about that dealer and how far away they are from where you live. This is great for the consumer, as you only need to type your information once to get multiple quotes. It would be slightly different for the used-car market, because each vehicle is unique, but I can see there being a similar model there in the future.
In Croatia, AutoZubak is making the transition to digital retailer with Neostar.hr, where you can purchase a car online and have it delivered to your door with a 15-day return window. What a fantastic experience for consumers compared to having to travel to purchase cars.
There are also opportunities emerging to bring more transparency into leasing agreements. Right now, you go to the dealer and get an offer. That’s great for the dealer — they get a lot of commission for selling those loans — but the consumer might be able to get a better price elsewhere. It’s the same case with insurance. There’s a real opportunity for bringing more transparency to the consumer by making it easier to bring together the lending and insurance components of a vehicle purchase into a single marketplace.
How big a part of your business will artificial intelligence (AI) become?
Some market leaders are starting to automate the purchasing and pricing of vehicles. They’re using sophisticated algorithms to make the process faster and more seamless. This is a different way of doing things, and it requires additional skills, which is frankly kind of scary for the industry. The important thing is that the dealer isn’t going to be replaced with a computer — a dealer’s market understanding is too valuable — but rather that the best results will come from a combination of data and experience.
It’s very early days for AI in the process of buying and selling cars, and those early adopters are gaining competitive advantage.
In your opinion, what are the biggest challenges the automotive classified industry faces in the next three years?
The biggest disruption will be the ability to buy your vehicle from the comfort of your own home. That’s what’s happened with the way people buy books, groceries and airline tickets. The automotive industry, in the U.K. at least, has been slow to change. It works pretty much the way it worked 60 years ago, where the consumer probably feels he or she will get taken advantage of — the same experience they had half a century ago!
But, with the current changes in the way people use technology, plus the generational shift, I don’t see that business model being as dominant in 10 to 15 years as it is today. We’re already seeing changes as manufacturers are starting to sell used stock directly to consumers, and retail stores like Tesla’s and Rockar’s make shopping for a car as easy and accessible as buying a new jumper.
The “Uberization” of the automotive business will affect the classified space as well. For example, should you pay 3,000 pounds up front for a vehicle, or would you prefer to have the right to use a vehicle for the next three years for 30 pounds a month? And how would you search, find, and compare the different options?
In general, dealers are becoming much smarter around decision-making and are making much better use of data than they were just two years ago. The industry has historically worked off of gut feel relationships and handshakes. We’re seeing a breakaway with the market leaders operating more like tech companies. They’re more data-driven, using their analytics platforms to focus their decision-making.
It’s similar to the transformation we have seen with investment banks and in insurance, where it used to be brokers wheeling and dealing. Those organizations have now adopted a data-driven approach with a lot of quants as opposed to the floors of brokers making phone calls. I expect there will be a similar transition over the next 10 years in the automotive industry, which makes it a really exciting place to be.