Jim Fitzpatrick: Zach Hallowell, Vice President of Manheim Digital, thank you so much for joining us on CBT news.
Zach Hallowell: Great, thanks for having me. I’m really excited.
Jim Fitzpatrick: How’s the show going?
Zach Hallowell: It’s great so far. It’s amazing to see how far it’s come since the 2007, 2008 time period when we had a real low in the industry. Clearly we are back.
Jim Fitzpatrick: I know, for sure. And it’s funny because we’ve been running now, it’s 17 million SAR, for the last four or five years. I think every dealer is kind of like, is this going to end? What does this look like?
Zach Hallowell: Right. It seems like it keeps on going. Yeah. I think we’ve been a little conservative. I think Jonathan Smoke, our chief economist is begging the number around 16.6, 16.7. But judging based on things here, it’s hard to believe the strength doesn’t continue.
Jim Fitzpatrick: That’s right. He did say too, when we interviewed him about the 16.6 at CBT News, he said used cars will be out, which is something we want to talk to you about today. Digital’s played, has been a big focus for Manheim. And you’ve spoken recently about the adoption of digital wholesale tools rising. What has Manheim been seeing in terms of digital growth?
Zach Hallowell: Yeah, it’s really been pretty profound. I think we’re right at that inflection point where for all of our sales, we’re just crossing that 50% threshold. All of last year we were at 48% of our cars sold to a digital buyer and coming out of the gates this year, January was at about 51%, which is a strong start to the year. And we really see this year as a year of growth and increased adoption where we have a lot of new product launches on the digital side to help dealers interact with us more easily. And so we’re feeling very bullish.
Jim Fitzpatrick: Sure. Manheim just announced a brand new website experience. What can you tell us about that and how it improves upon the legacy site?
Zach Hallowell: Sure. Yeah. If the new manheim.com is just being launched here at NADA.
Jim Fitzpatrick: Oh cool. Congratulations.
Zach Hallowell: And one of the fun, yeah, thank you. One of the big sort of fundamental changes is that the site is really built all around the user, so they have a very personalized experience. All the things, what we did is we looked at all the most frequently used areas of the old site and we brought them to the surface to make it easier for dealers to interact with. And then we overlaid that with artificial intelligence and the history that we have with dealers to give them an experience that’s all about them. They have their saved searches, their favorite locations, recommendations are all there right on the front page.
Jim Fitzpatrick: Wow, that’s fantastic. And why is it such a crucial moment in remarketing to introduce a platform like this?
Zach Hallowell: Yeah, I think it’s really I think reflective of the broader trends in all of our lives with digital being increasing in the adoption. Whether it’s the way we buy groceries, the way we buy home electronics, the way consumers are starting to buy cars. We really feel like we really want to be there ahead of our dealers, helping to bring them along and this is the right time to make this big investment.
Jim Fitzpatrick: We’ve all seen the Carvana commercials, where somebody sits in the comfort of their own home, types in the type of vehicle that they want and lo and behold, it’s delivered right to their front door.
Zach Hallowell: And we want to do that for all of our used car buyers who don’t just buy one car every three years, they buy three cars a day, 10 cars a day, a 100 cars a day in some cases.
Jim Fitzpatrick: That’s right, that’s right. Yeah. What are the biggest advantages that buyers and sellers can expect to gain through using the new site?
Zach Hallowell: Yeah, so I think, time efficiency was a big driver for us. We want to be able to cut the time that it takes to buy a car in half. And so we’ve really focused a lot on the usability of the site. It is different, that’s going to be a big change for our users because the existing site has been static for a number of years. It’s very familiar. And dealers use our site as really a tool to run their business. But overall I think if they give it a shot, they’ll see some great time efficiency gains.
Jim Fitzpatrick: Yeah. Yeah. This has been a big change for Manheim. How do you go about designing the new manheim.com?
Zach Hallowell: Yeah. We’ve got a great product and user experience team. And what we did is we really took an analytical look at the usage of our existing site. So we traced down all those areas that were used most frequently. We brought them to the front. For example, MMR is the most frequently used area of the site with literally millions of click throughs a week.
Jim Fitzpatrick: Wow.
Zach Hallowell: We now have a permanent button at the top of manheim.com and on the new app that we’re rolling out, it’ll be at the sort of footer of the page. Everywhere, you’ll be able to access MMR. We know the dealers use it. We know they love it, and so we want to make it very easy for them to get to. We took that mentality to really every aspect of the site.
Jim Fitzpatrick: That’s great. That’s great. Which makes a big difference. People want to get in, they want to get the job done and get out.
Zach Hallowell: Yeah, exactly. Yeah.
Jim Fitzpatrick: That’s what it’s all about. What advice would you have or would you offer dealers who are skeptical of adopting digital wholesale channel?
Zach Hallowell: Yeah, I’d say, really get Jake, to give it a shot. When I think back about the parallels, I think about the change that we had from going from a Blackberry to an iPhone. Initially, oh, I don’t think that touchscreen is going to work. That sort of thing. But people gave it a shot and they realized there was a better experience to be had. And we really believe that in the site that we’ve designed, it is better. It may take a little bit of time to learn, but often, new innovations do and we really feel like it’s going to be worth it when dealers give it a shot.
Jim Fitzpatrick: That’s fantastic. Well, Zach, I want to thank you so much for joining us on CBT News. We very much appreciate it.
Zach Hallowell: Excellent, thank you very much.
Jim Fitzpatrick: We’ll have to have you back in the studio.
Zach Hallowell: Anytime.
Jim Fitzpatrick: Or via Skype, can talk more about this.
Zach Hallowell: Yeah, sure.
Jim Fitzpatrick: Great.
Zach Hallowell: Anytime. Thanks.
Jim Fitzpatrick: Thanks so much.