Data, they say, is the new oil. More specifically, data is the new oil that powers the engine behind eCommerce car sales.
The recent spate of earnings across any number of companies – QSRs, for example, or platforms such as Uber and Lyft – point to the fact that knowing more about the customer can do wonders for an enterprise’s top line. That “more” entails engaging the customer at the right time, with the right offers, at the right price point and across the channels they favor.
Vroom’s earnings on Wednesday night (Aug. 11) are a microcosm of data-driven results. As noted in this space upon the earnings report, the top-line torque meant that sales surged by more than 200 percent year on year in the latest quarter to nearly $762 million. Drilling down a bit, eCommerce-related revenues surged by 230 percent year on year to $579 million. The actual number of eCommerce units sold surged by 172 percent to more than 18,260 units; average monthly unique visitors to the company’s platform were up 75 percent to 1.7 million.
See also: Vroom eCommerce Sales Jump 172 Pct As Data Enables Lower Prices, Rapid Turnover
Those numbers point to a growing level of comfort with using online channels to get among the biggest of big-ticket items bought and sold.
During the conference call with analysts, management noted that the strategic use of data can predict where the market will go in the quarter and how Vroom can react to anticipated changes. CEO Paul Hennessy noted on the conference call with analysts that the eCommerce gross profit was up 153 percent, and 32 percent quarter over quarter. Management also said that its “data-driven team is buying the right cars at the right price — and moving them quickly.”
Rising eCommerce Tide
Vroom is not alone in enjoying the torque of a data-driven model. As consumers have opened their wallets and as the great digital shift has retooled supply chains, other companies, such as CarMax, have ridden the wave of demand — especially for used vehicles. CarMax has been beefing up its digital presence, too, and noted in its own most recent quarterly report that its retail sales doubled from last year’s levels. The company estimates that it is the largest buyer of used vehicles online from consumers.
Read more: High Demand For Used Cars Drives CarMax To Record Quarter
Carvana, which operates as an online car dealership, noted in its own results that revenue went up almost 200 percent in the second quarter of 2021; the firm sold more than 100,000 vehicles for the first time, a 96 percent increase from a year earlier.
One note of caution, however: The movement to buying vehicles online still has its regulatory and administrative details. As The Wall Street Journal reported on Thursday (Aug. 12), North Carolina has suspended Carvana from selling cars in the Raleigh area until the beginning of next year. The state DMV revoked the online retailer’s license to sell in that area after investigations determined that it failed to deliver titles to the DMV and also sold some cars without inspections.
See also: Carvana Revenue Up 200 Pct As Used Cars Remain Hot
The common theme, as consumers kick proverbial tires online and pull the trigger on a purchase that can run into the tens of thousands of dollars, is that information underpins the sale.
As noted in an interview this year with Karen Webster, Vroom’s Hennessy said that at a high level, platforms and apps can serve as digital front doors to a broad range of services that span browsing, buying, servicing and maintaining a car – a connection of logically adjacent markets.
“We live in a world of ‘on demand’ now, where customers manage and measure and track the number of steps they took yesterday,” Hennessy said. “We’ve become data junkies.”
You may also like: Data-Driven: Vroom CEO Takes Fast Lane To Car Buying’s Connected Economy
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