Disrupting with data and analytics

For decades, access to the used car industry and available products has been fragmented and opaque, resulting in a time-consuming and frustrating buying experience for Australian consumers.

While data and analytics have been leveraged to augment many sectors, the used car industry is the final frontier to be fully digitised. In recent years, a new category of online used car platforms has emerged, offering buyers a modern alternative to the traditional dealer model and delivering improved customer experience. This successful model has been replicated in many markets, including Australia.

In order to deliver the seamless customer experience that online buyers expect, companies must develop a tech stack with the right solutions to enable a data-first approach to business operations. It is equally important to build a team culture to support this development.

Australian online used car dealer Carma has built an experience-led, data-first platform that not only introduced efficiencies into its own operations but also removed friction from the traditional buying process by offering customers a user-friendly and transparent option — an ethos that can be applied to businesses in any sector.

The Carma stack was developed with three specific goals:

• Build or integrate technology layers that are open data-enabled
• Adopt best-in-class data ops principles throughout the data lifecycle from ingestion to reporting
• Take a holistic corporate data culture and governance approach to guarantee self-service, quality and security

Data-first approach reaps rewards

The used car industry differs from most retail industries, in that every asset is fundamentally unique to each vehicle — such as features, condition, service history and kilometres on the clock. Capturing these nuances through a deep data model is paramount to being able to ingest, understand and accurately communicate that richness, both within the business and to customers. In setting out to build the back end for Carma’s operations and website, we knew that we had to build a data enabled ecosystem grounded in a clear strategy to provide a seamless end-to-end experience for customers and operators alike.

When it comes down to it, business success is dependent on understanding your customers. We know that Australian consumers want to buy the best car at the best price possible, particularly as we move into a period of economic uncertainty. Delivering on this means providing data that enables the buyer to identify suitable cars at the right price and allows for forecasting the activity needed in warehouses and reconditioning centres to create business efficiency. It is more important than ever to have accurate data on an individual vehicle.

A recent global chip shortage resulted in spec changes to car models, according to priority. This means that high-tech non-vital features were removed from models in which they were previously available. The upshot is inconsistencies between two vehicles of the same make and model — important information for used car dealers so they can understand the effect on demand and pricing, accurately represent inventory and manage customer expectations.

The Carma tech stack unlocks high-quality data flows throughout the business, with bespoke applications operating alongside solutions including Microsoft Dynamics, BusinessCentral, Hubspot and CommerceTools. Each of these delivers a specific capability within the overall platform, ingesting and passing on different types of data from the business workflow.

All of these building blocks are integrated with each other through an in-house middleware layer that guarantees the integrity and timeliness of the information passed from platform to platform, as well as orchestrating the data flows into our data lake powered by Snowflake.

Data flows throughout the business

Insights derived from data analysis allow the organisation to optimise the inventory range, reconditioning processes and the customer experience. Each part of the technology tapestry generates data that feeds into the data lake for consolidated analytics and reporting.

As an example, from the moment a car is acquired by Carma and enters the inspection and reconditioning centre, the platform starts generating data structures that are continuously updated as the vehicle moves through the production workflow. Each mechanical, cosmetic and logistic activity undertaken on the car is captured, giving us visibility on costs and margin and the right platform to look for strategic optimisations.

While our own data is rich, we also look to the broader industry, ingesting external data sources that help us understand the market and its trends. Developing a centralised data asset that combines inward- and outward-looking data is unlocking the ability to improve our service offering and efficiency. For example, we better understand things like common repairs required, average reconditioning times, buying trends, how quickly different types of vehicles sell, and even customer feedback, so that we can make continuous improvements.

Data supports the culture and vice versa

Achieving buy-in for a data-first vision across the business is paramount in leveraging data to create competitive differentiators, to generate effective business outcomes and in putting customers first.

Our company is uniquely structured, with mechanics working alongside software engineers and buyers working with customer success professionals. Data is central to our ability to ground conversations, diagnose problems and effectively test solutions.

Our teams come from very different backgrounds and the opportunity to leverage data to build a common language is massive but also requires a tailored and progressive approach. While our strategic vision is to enable self-service for operators to consult and even build data assets, we also recognise the need for taking pragmatic steps through learning and development.

We continue to invest significantly in tech, data, processes and people, to help scale the business at speed. We’ve fostered a culture centred on data and our team is well educated on the importance of accurate, real-time data entry, and consistent data hygiene.

Image credit: iStock.com/MrJub