Data. Digital transformation. Strategy. Technology.
October 03, 2020
Auto Trader has been on a journey. Once a renowned offline publication, the company now owns one of the UK's most visited websites and is recognised as an innovative tech employer and a key part of Manchester's digital community.
Could you tell us a little bit more about Auto Trader as an organisation and your goals as a business?
Today, Auto Trader operates the U.K.'s number one automotive marketplace. We've got quite a long brand heritage though, originally starting as a magazine publishing company over 40 years ago. But, since 2013, we've been digital only. Leading up to that, there was a good 15 year transition where we moved all of our revenues from publishing through to online only. I've been with Auto Trader through all of that time, just over 20 years now, and this has been an exciting transition to see happen.
Interestingly even though we transitioned all of our revenues online over that time, right up until about 2013, 2014, we still didn't really consider ourselves to be a digital company.
So, really, it's only since then that we've had a further transformation around culture and how we think of ourselves as a business. It's definitely been a journey.
I imagine your role has taken on many iterations during those 20 years, but what is your current role in the business?
Yeah, so you're right. So I joined as a... well, it was called a new media developer back then, software engineer essentially, and I've done a whole bunch of things
I'm currently technology director. That's, I would say, a combination of CTO and CIO. I work, what we call, two in a box with Alison Ross. So, between us we cover people, platform and operations. A venn diagram would show that I tend to be more architecture and tech strategy whilst Alison would be more people, culture and environment. Then there's a huge crossover in the middle, which is technical operational teams, product teams, data analytics, that we cover between us.
In terms of the journey from the magazine to a fully digital business, what were the main barriers that you found in making that transition and how did you overcome them?
That's a good question. So back in the magazine days, it was further complicated by the fact we operated via a regional model. Effectively you had thirteen individual, small businesses each publishing a magazine. Our mindset changed, moving to something that's more centralised and a lot simpler, bringing together lots of different brand names, and things like that.
We just went through a couple of years of, really, just simplification. Making things how you think they should be if you were a digital startup, but kind of retrofitting that to an organisation that's thirty-odd years old. It was a big challenge; to reset how we think about our purpose and our values remodelling ourselves as a digital company going forward.
That's interesting. So the company applied a startup mentality to an existing business. Are you ever approached by other companies that are trying to make a similar transition?
Yes, we host, and talk to people, and share stuff with all sorts of organisations. We are always very happy to spend a couple of hours in a room just understanding other organisations from all sorts of different industries. They're always helpful conversations.
People have often got the same challenges but they've had to tackle them in a different order, or something like that. There is no one magic solution, I don't think. There's a rough checklist of things you would probably want to go through. We've talked to organisations that are just beginning that journey, partway through, or have completed it. We're really happy to share stuff on organisational transformation, culture, technology. We can share a lot of the orders that we tackled those challenges. Not to say that it was perfect, that's just how it fell for us. To be honest, we took a long time, right? Fifteen years, actively transitioning, is quite a long time.
Getting into the here and now, Auto Trader's recent market report stated that you believe consumers will buy cars as if they are ordering from Ocado within a decade. How exactly is technology changing how people buy and sell cars?
When we revisited our purpose, what we came out with after many hours in a room of flushing this out was, we want to dramatically make car buying easier. It's a very complicated transaction right now. There's lots of things involved, not least because people often have to take out finance. They may be part exchanging another vehicle. They might want to test drive the vehicle. That's hard to do purely online. So, there's all sorts of challenges that make it a bit more difficult than buying potatoes online. But, the concept, we think there's a demand for that. Consumers do want to do more of the journey up front before they go to a car dealer, for example.
Fundamentally, we're just trying to make as much of that journey digital as possible. Making things easy for the consumer and easier for the retailers, actually. Manufacturers, too. To really just try to simplify what is already quite a complicated transaction and bringing more of that online. Lots of the initiatives that we're working on right now are things like making finance easier to get and to sort out online.
You mentioned retailers, there. What advice would you give to retailers that are looking to embrace technology?
Yeah, absolutely - do it, embrace technology. We've got about 13,000, or so, car dealers, or retailers, as we call them. Within that community, there is a whole spectrum of capability, if you like. From the very forward-thinking digital dealers themselves, through to more traditional, in some cases, very, very small independents. What we try and do is provide software solutions to help all those different segments. What we found is, retailers that really buy into data-driven digital marketing are the ones that are succeeding. Those are the ones that are doing well.
An example is, we provide retail metrics on vehicles. We operate a marketplace and we can say that, based on all those observations of data, we can advise on how quickly a particular car might sell, how many days it will take to turn that stock item over. We can advise on what the right price position might be to get a quick sale. By optimising the retail price, and minimising the days it takes to turn around a say, a retailer can maximise their profits.
What you want to be doing is getting cars in and selling them quickly. That's very different to, maybe, how a traditional car dealer of 20, 30 years ago might have felt. They would be tempted much more to think, ‘well I want to make so much out of this car, I'm going to add balance on the price'. Whereas, really, we're encouraging people to say to price it for a quick sale.
Fascinating. So by teaming up with Auto Trader, retailers then get access to the amounts of data that's available to the business
Absolutely, that is one of our unique advantages that, because we've got that large marketplace, it's fair to say we could tell you what the market prices are going to be because we operate the market. So it's very difficult for a competitor to do the same, actually.
What processes are in place that allow Auto Trader to utilise big data and make decisions with it?
We invested a lot in data tech over the last four to five years. We've seen a huge explosion in technology that goes into our data platform. A lot of the effort exerted has been around supporting our data scientists and data analysts, giving them access to, in some cases, vast amounts of information. We're able to observe consumer behaviour. We can look at how vehicles are advertised. We can look at the prices of vehicles and things like that.
Okay. So, looking into the future a little bit, what do all these changes mean for the sector, and specifically for the consumer?
We're always balancing this two-sided marketplace. We want to attract as many consumers to our marketplaces as possible. The way we do that is making sure our retailers are offering the widest possible choice of vehicle. In the last couple of years, we've had quite good success in making inroads into new car. Traditionally, we're recognised as a used car business, but in recent years we're really making a push into new cars as well. That reflects the fact that consumers, some times, are quite open to buying a brand new car or a used car. So, we try and make that choice as broad as possible.
The second thing is transparency. Our research shows what consumers want most of all is to know they're not getting ripped off. They want to know they're getting a good deal. So, we provide, what we call, price indicators. We'll say whether we think a vehicle is priced fairly or, maybe, priced slightly below market, just to provide the consumer with more assurance that what they're potentially about to buy is a fair deal.
A few years ago we made things like valuations of vehicles free to consumers. That was a disruptive move. We've done something more recently with vehicle provenance checks. Again, free to consumers. So, every car that's on Auto Trader has had a check done on it to make sure it's not stolen, written off, or things like that. So, really, just bringing in trust and transparency to that marketplace to help consumers with, what can otherwise be, quite daunting process to go through.
How have retailers found these moves?
It's a good question. Some have thoroughly embraced it, but some have found it a challenge. I think most can see that, with things like price indicators, most retailers eventually will admit it's the right thing to do. But, clearly that's highlighting that most of your stock is priced above market. That quickly has the effect that people start to rethink their pricing strategies, which is ultimately what we want. We don't want to drive consumers into a dealership to haggle on price. We want them to turn up and say "You've already advertised with a fair price. I'm quite happy to pay that." So, actually, once retailers get through that, it just reduces the difficulty on both sides of the transaction.
What steps has the organisation taken to find and retain the best tech talent?
It's tough. I think it's tough anywhere in the country. It's particularly tough in Manchester. Eventually, that's got to be a good thing because it's attracting lots of potential employees to the area. The reality is there is a skills gap and a demand for technologists. We moved to Manchester about five years ago and its taken a few years to really build up that community awareness and really start to engage with the tech community in Manchester. From small beginnings, putting on events in the evenings, and things like that, we're now influencing much more broadly. A lot of our people will talk at conferences all over the country, all over the world. Our influence and outreach is expanding over time, which, I think, has been helpful. And quite often when people, developers, or anyone else applies for a role or approaches us, quite often they've been to an event or they've seen us talk somewhere. So, it's been really helpful in that sense.
Auto Trader do a lot to help plug the skills gap with the work that you do with Digital Futures, Manchester Digital's Talent and Skills initiative. Why is that important to the company?
It just reflects that there is no single silver bullet. We found that the right way to approach is have a broad strategy around early careers. So even though we've had graduate programs for a long time, more recently we've looked at apprenticeships. I think this is our third year with the Manchester Digital Software Developer Apprenticeship. We've had a number of great successes, actually. People have gone through that program and are now with us as software engineers. Which is brilliant. It's really, really good to see.
Finally, just talking about Manchester, how has relocated to Manchester and being a part of the tech community benefited the business?
It's been transformational. I don't think we appreciated it back before we centralised and located around Manchester, the benefit of getting people co-located in a single building. I fundamentally think it makes building software better. Being able to collaborate and be face to face with your peers absolutely beats being at the end of a conference call. It can be done, but it's just much harder. Then just off the back of that, that community feel of having everyone together in a great environment, as well. I think the benefits we got from that massively, massively outpaced what we thought we would potentially get. So, it's made a huge difference.