IA and CEO Justin Holman featured in Aftermarket Business World!

Take a look at the great article and interview by Brian Albright for searchautoparts.com and Aftermarket Business World.

Automotive sector expands investment in inventory analytics

With the number of SKUs expanding and more and more companies moving to an omnichannel model for parts sales, inventory planning and demand forecasting in the aftermarket has become increasingly complex. Companies are turning to advanced analytics tools to help make more accurate and faster inventory decisions. IndustryARC predicts that automotive data analytics market will reach $3.81 billion by 2023, with a compound annual growth rate of 15.4 percent. That growth will be fueled, in part, by the increasing amount of data available from autonomous and connected vehicles or telematics systems.

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The Future of VIO

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.