Dealer insight, combined with the rapid rise of AI, is fueling a new wave of opportunities and solutions aimed at solving persistent problems in auto retail.
It’s the culmination of needed opportunities in today’s tech-driven world, explained Steve Greenfield, CEO and founder of Automotive Ventures, who has long been at the forefront of transformative ideas in the business.
Driving the news: “We're on the cusp of tremendous innovation where 10 years ago it was expensive and hard,” the venture capital (VC) founder and industry thought-leader told Daily Dealer Live hosts Sam D’Arc and Yossi Levi.
“You had to hire a CTO, etc. Now it's really democratized software development, which is going to mean that we're going to see a wave of new innovators helping dealers solve some of their biggest pain points,” he added.
Empowered by AI: The ability to build software quickly, bypass traditional barriers, and leverage AI tools like ChatGPT is now empowering dealers to create their own solutions (or push vendors to innovate more rapidly).
Dealer-led companies such as DriveCentric, BizzyCar, and Vincue are outperforming some VC-backed startups.
They demonstrate that retail tech born from dealer insight can often be more effective than Silicon Valley-driven concepts.
New AI-driven approaches, including “vibe coding” eliminate many of the challenges tied to traditional software development.
And today, it’s even easier for dealers to create tech solutions through simple chatbot interactions.
“Literally, if you wanted to, by the end of this weekend, you could have a piece of software that no external developer touches and it would work,” explained Greenfield. “It would integrate into your systems if you could point it to the [application programming interfaces] APIs from your software providers, and it would actually work.”
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Why it matters: This shift could disrupt legacy vendors, with some speculating that software as a service could disappear altogether as the industry moves into an AI-fueled era of innovation.
“It’ll be very positive for dealers,” he said. “They're going to see a wave of new entrepreneurs attacking the space, providing new solutions. But I think for some of the incumbents out there, it's a little concerning when they're trying to figure out how much of a threat AI might be in general, and whether the moats that were defensible in the past will continue to be something that they can depend on.”
A two-step solution: For dealers seeking outside partners to tackle pain points, one of the biggest challenges will be sifting through the growing number of solutions to find the right fit, Greenfield explained.
He recommends these best practices to navigate this new era of innovation (with an eye toward data integration capabilities):
Step one: Assess where your current vendors stand with new AI modules and push them to see if they can address additional operational problems.
Step two: Stay open to startups that, in many cases, can move faster than larger vendors when developing solutions to specific pain points.
Bottom line: “You may find a startup that's really onto something with a great founder,” Greenfield concluded. “They've got a good value proposition for you that's solving a big pain point, but if they can't integrate back into your data, then you are just going to continue to be frustrated.”
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