KAR Auction Services will invest between $20 million and $25 million over the next three years to redesign and enhance its online sales platform in a project known as New Wave, CEO Jim Hallet announced during the company's fourth quarter earnings call.
“New Wave leverages the latest advances in online and digital technology to deliver a more simplified user experience and enable seamless use across desktop, mobile and tablet devices,” said Hallet during the earnings call. “It will also integrate the advanced analytics, pricing and reporting capabilities generated by KAR's data science solutions team. And we expect to begin deploying the New Wave solution later this year.”
In 2016, online sales accounted for 25.8% of all vehicles sold through ADESA auctions. The segment also realized a 25.5% year-over-year increase, whereas physical auction sales only grew by 4% year-over-year on a same-store basis. Of the 2.9 million total vehicles that ADESA sold in 2016, 743,000 were online-only sales, compared to the 592,000 online-only sales in 2015.
When asked about the timing of this new project, Hallett noted that ADESA’s online platform currently provides approximately $80 million in revenue.
“And I believe that it's our responsibility to enhance that value proposition, provide more flexibility and more services to our customers,” he added. “We talk about integration that we can do with our data and analytics, which has become a real major focus of KAR as well as a major focus of our customers. This is what they're asking for.”
Earnings call transcript courtesy of Seeking Alpha.