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In December 2019, we were celebrating a year of big digital growth in the wholesale industry. I had spent the year talking about how digital wholesale would soon reach a tipping point where the majority of purchases would be made by digital buyers, and adoption would start to grow at faster pace.

We rang in 2020 — which happened to be Manheim’s 75th anniversary — by reaching that point. We set the stage for an incredible new digital experience for our clients with the all-new Manheim.com and planned to transition at least two more of our operating locations to “all digital.” Ha. Hindsight is 2020, right? (Pun intended).

Little did we know at that time, we’d be going all digital everywhere less than three months later. Not by design, but out of necessity. It was a hard decision to flip that switch, but all of the groundwork we’d been laying over the years was put to good (if unprecedented) use. The planning took us part of the way, but it was the hard work of the team combined with the incredible grit and determination of our clients that truly made it possible for us all to weather the last nine months.

In that time, we’ve all zigged and zagged to keep up with ever-changing local restrictions. We’ve all had to learn new ways of doing business. And we’ve all identified gaps that need to be filled. Through all of the unpredictability, we as an industry came together, supported each other and found our way through. And as I look back now, I’m choosing to focus on the good.

Seeing the good

I’d be remiss if I didn’t say that the greatest news in all of this is that a vaccine is finally starting to be distributed. That scientific achievement is one to celebrate immensely. As more people are inoculated, we can slowly get back to doing all the things we love with the people we love and have more stability in the way we run our businesses.

However, I hope that the goal isn’t to go back to “normal” in the way we run our businesses. It’s not that normal wasn’t good. It’s that we all learned and grew in ways we couldn’t have imagined, and it’d be a miss to lose that progress.

On the wholesale front, the good news from 2020 is that more buyers and sellers took the leap to digital platforms — and many of those are people who wouldn’t have tried digital otherwise. Since taking the leap, they have realized that there are great efficiencies in doing business digitally. We’ve talked to so many clients who were reluctant at first but now say that they may not go back.

On Simulcast, our biggest digital platform, 30% of the dealers currently buying are new since March. When we launched Simulcast way back in 2002, we knew that it would be a game changer for wholesale, but what we didn’t know was that it would be one of the only ways to buy and sell vehicles for an extended period of time.

Even with Manheim now offering in-lane bidding at most locations (where we feel it’s safe and local restrictions allow), as well as running vehicles down some lanes, digital buying has remained strong. We’ve seen double-digit growth across all of our digital channels — for vehicles on and off our lots. It’s clear, both from the numbers and from what clients are telling us, that digital wholesale works.

Looking ahead

Now that we — and our clients — know what’s possible with digital wholesale, it’s on us as an industry to make it preferable to do business that way. We’re not making a push toward digital-only, but instead toward an omni-channel client experience, bringing together the best of our physical and digital capabilities.  We’ve honed our physical experience for the last 75 years, now we’re applying that same client-first perspective to our digital channels.

As we move into that future, we as an industry need to look at all aspects of the digital experience and make it better. It’s no secret that the greatest and most immediate needs are better condition reports and an arbitration experience that’s more applicable to a digital world.

For condition reports, it’s clear that they were originally created for sellers to approve reconditioning work than for digital remarketing. COVID briefly taking away the ability to preview cars in person highlighted exactly how much more information dealers want and need in a digital world. While many of us on the wholesale side have introduced new imaging and video technologies in the last couple of years, there’s still room for improvement across the board.

Equally as important is for us as an industry to look at our policies — especially on arbitration — and figure out how to evolve them to be more applicable to a digital-first world. Bringing consistency across platforms, as well as expanding coverage, will be key to helping clients succeed in the digital marketplace.

Certainly, there are other opportunities for improvement. Throughout 2020, we looked at everything from how titles and payments are managed to which vehicles perform better digitally and which ones truly need to be run down the lanes (safely, of course). But keeping the momentum going in digital will hinge on solving some of the biggest pain points that 2020 amplified.

A 2021 prediction

While 2020 showed us that it’s possible to operate in a mostly digital environment, it also taught us how important trust and transparency is in making it preferable to do so. I firmly believe that better vehicle information, along with more consistent policies, are the keys to giving clients the trustworthy digital experience they crave.

As excited as we were to ring in Manheim’s 75th anniversary this past year, I’m even more energized about what awaits us now in 2021. I truly believe that digital can deliver a vastly improved buying and selling experience. However, it’s on us as an industry to turn this opportunity into a reality. To move from what’s possible to what’s preferable.

And in the same way that I predicted the tipping point to majority digital sales by the end of 2019, I’ll make one more for prediction for 2021: this will be the year that more buyers and sellers choose digital, because it will be easier, more efficient and more trustworthy than ever before. 

 

Zach Hallowell is senior vice president of Manheim Digital Solutions.