“Buy a car entirely online, and have it safely delivered, contact-free.” So goes the pitch at online car-buying platform Vroom, which is turning to artificial intelligence (AI) and machine learning (ML) to further accelerate the transformation of the used car business.
After a two-year test drive as a client of market data and analytics firm CarStory, Vroom announced on Tuesday (Dec. 15) that it is buying CarStory outright, calling the company the used car industry’s largest source of AI-powered digital services.
“As car buyers and sellers across the country increasingly turn to eCommerce solutions, CarStory will strengthen and extend the reach of our digital retailing platform, and together we will accelerate the transformation of the massive used auto industry,” Vroom CEO Paul Hennessy said in announcing the $120 million cash-and-stock deal.
The move comes at an interesting time for car buying, as the pandemic and digital shift have seen record numbers of people going online and buying vehicles they’ve never actually seen in person. Many customers are also showing a preference for used cars over new ones.
Vroom’s Hennessy recently told Karen Webster in an interview that he welcomes the surge in online sales, but said there’s more to it than just clicking a link.
“It’s going to be a real challenge for traditional dealerships that run brick-and-mortar sites very well to suddenly become eCommerce companies,” he said. “And I would suggest that there’s a big difference between having a website and being an eCommerce company and between delivering a car in your neighborhood and having a nationwide logistics network.”
CarStory CEO John Price said his company’s mission to provide data and services that enable traditional dealers to grow won’t change, and that the Vroom acquisition will “enhance its ability to transition an industry to digital retailing” and reach its goals even faster.
Marketing Cars Online
The Vroom deal comes just one week after 3-D content creator Unity announced the launch of Unity Forma, its auto industry selling tool. Unity believes the tool will empower the auto industry’s digital marketing professionals to easily create and publish content and interactive experiences.
According to the company, by significantly reducing the production timelines and costs involved in the creative car-selling process, Unity Forma will give dealers more time to inspire shoppers and convert them into buyers. The company cited its work with Volkswagen to “consistently delight customers.”
Unity Chief Marketing Officer Clive Downie said that “in our digital world, it’s harder and harder for marketing to connect with consumers on an emotional level.” But he predicted that the ability for brands to “create and deliver stunning content and interactive experiences in record time” will become the bedrock of modern auto marketing.
Digital Dealers Are Selling Computerized Cars
The digital selling transformation is happening at a time when the vehicles themselves are getting more and more technologically advanced.
A study released this month projects that the global automotive AI market will experience exponential growth over the next decade, expanding from $2.5 billion today to roughly $75 billion by 2030. Researchers attribute the gains to a surge in machine learning, deep learning, computer vision, natural-language processing and more.
“Fully autonomous and semi-autonomous vehicles use artificial intelligence to perform complex tasks such as face recognition, threat detection, image processing, vehicle localization and mapping,” the study’s authors wrote.
They added that machine learning enables vehicles to use data to imitate the human mind, language understanding, problem-solving and other traits.
“Technologies such as Advance Driver Assistance System (ADAS), Adaptive Cruise Control (ACC) and Electronic Braking Distribution (EBD) make the driving experience better and ensure advanced safety for the driver and passengers,” the report said.
Harnessing the latest technology not only makes cars safer, but can also improve dealership efficiency, customer satisfaction and sales, research by Wards Automotive found.
“Because car dealers aren’t data experts, artificial intelligence (AI) solutions provided by automotive-specific suppliers can be used for more in-depth data analysis,” Wards said, pointing to the use of tech to automatically capture such dealer-specific elements as market demand, vehicle supply, sales history and competition.
“That can be overwhelming for even an experienced data professional trained to identify patterns to comprehend,” the publication said.