Prior to being acquired by KAR Auction Services 14 months ago, DRIVIN was largely focused on the dealer side of the market and the downstream piece of wholesale — or “wholetail,” as co-founder Kayne Grau put it.
At that time, the young Chicago-based company was geared toward using data to aid dealers in vehicle selection and optimizing the inventory on dealership lots.
“Upon the acquisition (by KAR), we made the decision to move the sales part of that over to TradeRev, work with TradeRev on their data analytics and really use what we were really good at, which was the data science aspect of it – the matching and selling,” said Grau, now the president of KAR’s Data as a Service group, in a phone interview this week. “(And) really syndicate that capability across KAR.”
Those efforts were instrumental in the launch of a “reimagined” OPENLANE earlier this week that is designed to help the private-label platform’s 40- OEM and financial institution customers sell cars upstream much more efficiently.
The new OPENLANE platform includes a host of upgrades from across KAR's business units, and among those are data science capabilities built by DRIVIN.
“Ultimately, a successful upstream program is all about portfolio management — holistically optimizing outcomes and effectively mitigating risk,” Grau said in a news release about the revamp.
“DRIVIN translates data into clear, actionable intelligence for dealers, and we’re excited to be working with OPENLANE customers to deploy these powerful insights,” he said. “Together, we’re creating a more informed, data-driven marketplace where both sides of the transaction can benefit.”
It's projects like these that illustrate the vast data points of KAR — which include upstream/closed-channel remarketing, 200 whole car and salvage auction locations, retail data and beyond — and where a data science company like DRIVIN comes into the equation.
“You combine all that … we’ve got a view that we think is unprecedented,” Grau said during the phone interview. “So what the DRIVIN team is really working on now is taking all of this data and being able to look at it and cross-cut it.
“And going back to our captive finance companies and large dealer groups and really trying to help them understand not only what’s happening at the macro level, but what’s really happening at the rooftop level, the micro level.”
Over the past few months, the team has been working very closely with these captives and dealer groups.
“Honestly, it’s a lot of fun. Our data scientists have found new and innovative ways to not only analyze the data but to be able to visualize and depict this data and give them views that they’ve never seen before,” Grau said.
“And then, I think you take it to the final step, which is not just having the data to be able to have action around it as well,” he said. “So, making the recommendations, and then utilizing our suite of companies to actually help facilitate the end-to-end transaction.”
While news of the revamp to OPENLANE and its new capabilities — including the data science features — largely honed in on the consignor/seller side of the wholesale market, a pre-acquisition project started by Grau, DRIVIN co-founder Justin Mahlik and the company’s sales team can boost dealers on the buying side, as well.
Prior to the purchase, the DRIVIN team was talking with dealers, Grau said, “And what we were hearing was, ‘Hey, I love the OPENLANE product. The problem is, there’s just too many cars coming into back to the ecosystem. And I don’t have the time to cut and paste my VIN and look into a pricing tool and spend hours and hours of research. It’d be great if you could just tell me what I should be looking at.’”
With that back, the team built a product it called “Email Remarketing” that was designed to be “very quick and easy-to-understand,” he said.
DRIVIN was able to take its algorithms to scan vehicles that are coming back into the market upstream and tailor the specific ones that a given dealer should be looking at based on the store’s needs, Grau said.
After building the product, DRIVIN, of course, ended up being purchased by KAR, “which was even better because now we could come as a unified product of KAR,” Grau said.
There are several consignors piloting it and Grau called the early results of this email product “encouraging,” in terms of conversion rates, open rates how and how the emails are being used.
As one might expect from data scientists, the team continues to add tweaks to make it smarter. The emails are rooftop-specific, Grau said, so even if two dealerships are franchises of the same automaker and close together geographically, the vehicle recommendation emails they receive could be completely different, depending on their buying behaviors or preferences, he said.
Grau said they are looking at other upgrades like push notifications to mobile devices or using the data at physical auctions.
For more thoughts on data science, be sure to catch Grau at the next month in Raleigh, N.C.
Alongside KAR chief economist Tom Kontos, Grau will discuss and what this move from descriptive and diagnostic to prescriptive and predictive has meant for the auto remarketing industry.
The Auto Intel Summit is being held July 24-26 at the Raleigh Marriott Crabtree Valley.