One of the more interesting data sources we track at Quad Analytix is used car sales from online dealers including Autotrader, Group 1 Automotive, CarMax, or Lithia. Using a standard set of assumptions, we can answer questions such as: What do assortment and turnover look like? How have sales been trending? What about regional differences in trends? Even small occasions, like a holiday weekend, can lead to interesting insights.
For example, we just celebrated Labor Day weekend, which some have dubbed the “Black Friday of car sales.” Summer is a time of great buildup of used car inventory. Dealerships push out older stock to make room for new models, and between the end of May and the beginning of September there are four opportune holiday weekends: Labor Day, the 4th of July, Memorial Day, and Father’s Day, which all lend themselves to being a great springboard for marketing campaigns (that just wouldn’t make as much sense during the the winter holidays, because let’s face it—driving in the snow can be stressful, and Santa doesn’t have a car). As an example, here are three highlights from one of the automotive merchants we track:
1. Labor Day Automotive Sales are Huge!
Used car sales jumped 18 percent above average during the week of Labor Day. Also, the weeks leading up to Labor Day saw a steady increase in sales, as compared to weekly averages.
2. Holiday Weeks Drive Volume
Looking more closely at the sales volume surrounding Labor Day, we find that while Labor Day itself did have a significant increase in sales compared to the daily average. However, it’s the entire holiday week, not just the day itself, that drove sales volume.
3. Key Regions Drive a Large Percentage of Sales
Looking at the data by region, three states (California, Florida, and Texas) account for nearly 40 percent of average sales in the second and third quarters (for this online dealer), which corresponds to those states’ higher population levels compared to others.
Many factors can effect sales other than holidays, such as seasonality, organic growth, new dealerships, recalls, and macro-economic factors like gas prices. By tracking data longitudinally and regionally, we can account for these factors to help you make better decisions.
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