One of our first clients in the Automotive Aftermarket was a manufacturer of replacement parts. They had developed their own in-house methodology for generating inventory stocking recommendations for their customers. They didn’t need us to reinvent the wheel. But, they had problems applying their methodology efficiently.
They had built their system in Microsoft Excel and it was a fairly complicated process to generate SKU-level recommendations. It required a lot of copy-paste to get the right data in the right spreadsheet cells. And the manual data input process led to frequent mistakes and frustrations. Because of this, they had 2 full-time analysts who spent almost all their time waist-deep in the spreadsheet trying to keep up with requests for data-driven recommendations.
We suggested that we take their approach and spreadsheet and convert it into a web application. This had several benefits and a rapid ROI:
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The Greensheet Issue #18-18 (Full) _ The GreenSheet (1)
In a recent article the Economist declared that Data has surpassed Oil as the world’s most valuable commodity. Ironically, this value transition is also occurring in the automotive industry where oil still fuels the cars on the road but key data, such as vehicles in operation (VIO), now fuel decisions faced by automotive parts suppliers, distributors and retailers who are increasingly competing on analytics and supply chain efficiency.
For those not familiar, VIO is the name used to describe the census of vehicle ownership registrations which include details such as year, make, model and other attributes. Most large companies in the $300B+ Automotive Aftermarket market license these data in one of two flavors, “Experian” or “Polk”. I don’t know who is winning the market share battle between the two but I do know the Aftermarket is paying a hefty premium due to inadequate competition. Buyers can choose the geographic unit of reporting (national, state, county, ZIP, census tract or perhaps even block group) with prices going up with each increase in geographic resolution. I don’t have details on pricing but, from what I can gather, you’ll pay around $20-30k for County level, maybe $40-50k for ZIP and possibly over $100k for data at census tract or block group level. In exchange for this hefty price tag you get a pile of DVDs or a monster CSV file to download, and not much more.
Originally, R.L. Polk & Company had, essentially, a monopoly on the VIO data licensing business and they used their profit margins intelligently, acquiring Carfax in 1999. Then, around 10 years ago Experian (yes, the same Experian who recently exposed the private data of 123 million American consumers) entered the market. I assume this duopoly improved the competitive landscape a bit for VIO buyers but I think there’s still plenty of room on the field. In 2013, IHS-Markit acquired R.L. Polk & Co for the tidy sum of $1.4 Billion. Having been through a couple of acquisitions myself I suspect some of the Polk brain trust has cashed-in most or all of their Earnout and moved on, either literally or figuratively.