There are countless applications for Artificial Intelligence in the auto retail industry and the possibilities they present are endless. In fact, AI technologies are projected to increase business productivity by up to 40 percent by the year 2035. To find out more about how AI is integrating into the auto retail industry and how dealers can utilize its capabilities, we recently spoke to Dr. Mark Colosimo, Vice President of Data and Analytics at Urban Science.
VIDEO TRANSCRIPT:
Jim Fitzpatrick: Hi everyone. I’m Jim Fitzpatrick. Thanks so much for joining us on another edition of CBT News. On today’s show, we welcome Dr. Mark Colosimo, Vice President of Data and Analytics at Urban Science, to discuss how dealers can effectively utilize artificial intelligence capabilities.
Jim Fitzpatrick: Welcome into the show, Doctor.
Mark Colosimo: Thank you, Jim. Appreciate it.
Jim Fitzpatrick: Yeah, so obviously it’s a been a lot of talk out there about AI in the automotive space, as you know. Talk to us about what dealers should know about AI at this point.
Mark Colosimo: Well, the first thing is to understand what it is. I think we use terminology like that’s modern; that’s interesting; that’s kind of the catchphrase of the day sometimes. And people don’t really know what it is. So first of all, just to know what the heck we’re talking about here. The definition of it is really trying to take human behavior and make it into a technological delivery.
The key is for dealers, for anybody out there in any business setting, to really not be afraid of it. I think a lot of folks don’t want to just take it as is as, it’s provided to them because they don’t know where it’s coming from. And it’s understandable. We’re all reluctant as we enter new areas, especially as technology allows us new things. But the key is that over time to realize how much value it’s really going to bring for you and to be able to utilize a lot of those things, those tools, and those capabilities to help speed up the process. Dealerships are very, very busy places. So they can have AI help them with their operations, with their daily functionality. Then that’s only going to help them be more successful and be more profitable in the long run.
Jim Fitzpatrick: How can AI help dealers create a personalized shopping journey and help them to increase sales in doing that?
Mark Colosimo: So that gets into a lot of the online interactions that occur. And one thing that is really beneficial to dealers that we see out there is the ability to be able to target customers and provide the right offers at the right time, to be able to align the need through understanding the history of customers. Whether it was their last purchase or last service visit, whatever. To be like right on time. Just in time kind of sales and marketing when talk about in the manufacturing sense. But in the sales and marketing side, it’s also possible these days. So much data out there that we can utilize to help dealerships be able to figure out who is probably looking for a vehicle right now and potentially even what they’re looking for based upon their past experience, which only helps the customer because now they’re probably going to get offers and reminders and everything else that’s going to help them make a decision. That’s probably better for them in the long run. It may save them some money by obviously the dealer and the OEM being able to understand that those customers are ready.
Jim Fitzpatrick: So consumers, from your perspective, consumers and car shoppers alike, they want more AI in their life if it’s going to help them in the process.
Mark Colosimo: Well, I think so. That’s what we’re generally hearing but to an extent. I still think there is that human touch that’s necessary. Like I said, both in sales and service. Again, the sales side, this is a huge purchase. So dealing with a salesperson, dealing with an expert that can provide you some insights, specifically with all the various options, combinations, vehicle specifics relative to those that they have in inventory. There’s so many permutations right now of the number of vehicles that exist via the different trim lines and the option packages and combination pretty much for every manufacturer. I know a lot of them have tried to pull back on that a little bit, but there’s still a ton out there, and the consumer just isn’t that knowledgeable to be able to particularly pinpoint those exact vehicle combinations that they can actually get relative to what they’re looking for.
Jim Fitzpatrick: And if you’ve got the combination of human and AI working together, we see that in dealerships now where a salesperson or a service adviser may have an iPad. And they’re helping the customer kind of navigate through all of those different options that you were talking about. The trim of the car, the size, the different options, things like that. But it’s human-assisted AI. Is that something that we’re going to see more of?
Mark Colosimo: No doubt. We’re already trying to do it at the customer end where you’re able to access your own information through the web and through websites. And it’s the endeavor of manufacturers and dealers to provide that information up front. That gets their products more sticky. Within the dealership itself, again, go back to the Apple example. They are walking around with iPads and so forth to be able to get information, make appointments, organize the business, right? So why not do that at a dealership as well? That helps dealers obviously from a training standpoint to be able to have that information more at fingertips rather than having to go through a plethora of classes for salespeople, especially with turnover rates that we have, to be able to get people more knowledgeable or at least have the information readily accessible to them to be experts to their customers as they walked through door.
Jim Fitzpatrick: If dealers have robots in their showroom, there wouldn’t be the turnover that we see in the car business, right?
Mark Colosimo: That’s true. But, I mean, there’s still, like I said, there’s that human element part. I don’t necessarily trust a robot. Maybe 100-200 years from now. I don’t know.
Jim Fitzpatrick: There’s some dealers out there saying right now, “Dammit, we still have that human need out there.” Right?
Mark Colosimo: We do. We do. And it’s really a gray thing. It’s great that we’re having the combination of both where you’re still interacting with somebody that’s providing you that comfort. I mean, why do we… Back in the day, I can remember with airplanes it was about having flight attendants and then making you feel comfortable. Why is that? Partly because you want it to be ensured that the flight was going to go well. Same thing with buying a vehicle. You want to be ensured that you’re making the right decision. You’re going to have a lot of unique personal questions to ask, and therefore you need a human to be able to do that.
Now, there’s a lot of details of the deal. There’s a lot of different elements, trade-ins balance with the gross you’re making on the front end. I mean, there’s so much involved that again having to automate that. Yes. I mean, you could to some extent, but you still need somebody actually reading through all that and making sure that the customer is taken care of properly.
Jim Fitzpatrick: We spoke to one large dealer or a dealer of a very large auto group in the Midwest, and he said that he wants to make his dealership accessible to every type of buyer that comes in. If somebody wants to come in and deal with a laptop or an iPad rather and do the entire process on the showroom floor, great. We’ll have a way to go for you on that. If somebody wants to take and work with a sales associate and take an hour or two, great. If somebody wants to be here all day, and believe it or not, some customers actually do want to be in the dealership for four or five hours and really have a slower process to make sure that they’re making the right decision and try a number of different vehicles and talk to the finance manager for hours at end about interest rates and terms and lease options and all of those wonderful things.
Not everybody complains about the time in a dealership. There are people that actually like to… If they’re going to spend $50-, $60-, $70,000 on a car or even $20,000, they want to feel good about the purchase and the dealership. this particular dealer we were talking to said, “I want to have an option for every type of buyer that comes in, including the ones that click on to our website. And they want to do the entire sales process online and have the vehicle delivered to their home.”
So obviously AI’s going to play a bigger role in that. Right?
Mark Colosimo: Right. And that’s kind of the point is you’ve got to cater to a variety of different folks. I mean, I know my parents would not be interested in dealing with an iPad only. They’re going to want to deal with someone that can walk them through the whole process. They’re going to want to deal with much technology at all. But then you might get some younger folks that are obviously more experienced with all the technology and don’t want to deal with anybody or minimize the amount of interaction they have to have and wait time and everything else. So there still is a variety of needs out there, but we’ve got to be ready for both ends of the spectrum to make sure that people are handled as they’re expected.
Jim Fitzpatrick: Sure. And then when that individual spends the time with the human sales associate because that’s the route they wanted to go, they jump in this unbelievable vehicle that’s so technology throughout that’ll blow your mind, and now they’re in the middle of dealing with AI again. Right?
Mark Colosimo: Well, hey, delivery process is a big part still. I know when I got my most recent vehicle, I didn’t know about half of the features that it had. And it was great to have someone to walk you through it because you go brand to brand, model to model. Four or five years later and things have changed substantially. So you’ve got to be able to find things once again. It’s like starting from scratch sometimes. You need someone to walk you through all that stuff. And unless vehicles are basically like Siri, and you’re just talking to them. And they can answer everything for you. But again, still a ways away from anything like that.
Jim Fitzpatrick: What are some of the things that you guys are working on over at Urban Science that will help dealers?
Mark Colosimo: Well, tons of things. First of all, one of our biggest efforts right now is really utilizing all the data that dealerships have, that the manufacturers have to be able to operationally help dealers understand where they need to focus their attention. With all the reports, the data, the websites, everything that they have at their disposal to help them out. It’s nice to be able to bring everything down to a few things to focus on at any given point in time. For their weekly sales meeting, what should I talk about? So we’ve been really pining through all of the data.
I’ve done a lot of work with a variety of different dealerships and manufacturers to be able to get to a point where we have something now that I think is very good at being able to show dealerships on a regular basis where to focus their attention. Is it my inventory? Is it the traffic sources that I’m working with? Is it something with my salespeople, my sales staff? Are they educated enough? Are they selling enough for what they should be? There’s a lot of different avenues or different verticals down the area of the variable operations side as well as a fixed. We do a lot of work on that side as well with understanding relative to the number of repair orders they’re getting, the type of business they’re doing, their mix of labor operations. Am I getting the business that I should be getting compared to other dealerships?
Jim Fitzpatrick: Well, Dr. Mark, Colosimo, I want to thank you so much for joining us here on CBT News. We very much appreciate it. Hopefully, we can have you back in the near future and talk more about this and other items that you guys specialize in at Urban Science.
Mark Colosimo: Thank you, Jim. Great talking to you today.
Jim Fitzpatrick: Great. Thank you.
CBT Automotive Network, the number one most-watched network in retail automotive. This has been a JBF Business Media production.
