Has modern inventory-management software elbowed out gut instinct in decision-making at car dealerships?

Well, yes and no.

Yes, in that more and more dealerships rely on data-driven systems that, among other things, recommend which used vehicles to stock, ones that will sell fast and at a competitive price.   

But to paraphrase Mark Twain, reports of gut instinct’s death at dealerships is greatly exaggerated.

To many industry experts, the way to go is to use both a used-car manager’s good sense along with inventory-management software to, at the very least, validate human decisions on what to stock and at what price.

CDK Global, this year, introduced a new digital vehicle inventory.
Key features include:

• Customizing pricing using real-time sales and forecasting data.
• Tapping into local market valuations and using built-in cost and margin calculators to move inventory more efficiently.
• Creating inventory listings with AI-powered photo and writing tools for quickly marketing vehicles as they arrive at the dealership.
• Identifying slow-moving stock and adjusting exit strategies accordingly.

It’s digital-age stuff. “It’s a new and fresh way to handle inventory,” Dan Doolin, CDK’s lead product marketer, tells WardsAuto. “It’s having all the tools you need to meet a lot of needs in the inventory space.”

But when asked, Doolin dissents from the proposition that the system and others like it can displace a good used-car manager’s “gut” feeling about a car.

“I’d never argue against the value of gut instinct,” he says.

The French have a term for it: Je ne sais quoi, meaning a hard-to-describe quality. More pointedly, it’s about a smart used-car manager who’s been around the block enough to know what’s what.  

If gut instinct can get a dealership staffer part of the way there when doing inventory acquisitions such as trade-in valuation, the system can play backup and/or take it over the finish line, Doolin says.

“Instincts can kick in,” he notes. And then there are factors such as “eyes on the vehicle” and driving it to really get to know it. The system might not pick up on certain things the way an alert human can.

Yet many dealers leave the inventory decisions to the machines. “We’ve switched over to an automated inventory management system,” a metro Detroit dealer told WardsAuto during an Autoline video panel discussion. “Gut instinct isn’t enough.”     

During a media briefing at the Automotive Hall of Fame in Dearborn, Michigan, Cox Automotive president Steve Rowley weighs in on WardsAuto’s question about whether gut instinct is dead in the auto-retailing industry.

“Wow,” he replies. “This is an industry in which people go to auto auctions and buy what they want to buy. But technology is about offering facts and data to help make those decisions.”

He adds: “If you use gut instinct, and it works, fine. I’m not saying it doesn’t work. But we offer an alternative that can guide and affirm.”     

Lori Wittman, head of Cox Automotive’s retail solutions, touts the company’s digital offerings but adds, “It doesn’t take away gut instinct, it just makes it better.”

After all, despite the marvels of modern technology, auto retailing remains essentially a people business.

That’s why Wittman says dealer principals don’t want staffers’ heads buried in spreadsheets.