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Maximizing Holiday Profits: The Power of Targeted Marketing for Auto Dealers, OEMs and Lenders 

While inventories and incentives continue to rebound, overall demand for new vehicles has cooled slightly in the wake of higher interest rates and elevated prices. Still, U.S. light-vehicle sales were up slightly (1.8%) to 1.2 million units in October, according to GlobalData.
However, with adequate inventory levels and labor unrest in the rearview mirror, lenders, dealers and their original equipment manufacturer (OEM) partners will need to leverage strategic marketing strategies to lure potential car shoppers this holiday season, in an effort to offset predicted softening in consumer demand in the coming months. 
Optimizing marketing spend in a slower holiday season 
Americans will likely exercise caution with spending this upcoming holiday season, due to increased prices and rising debt, as well as savings shrinking. Shoppers will still spend money, but likely focusing more on necessities and making fewer discretionary purchases. 
That said, with dealers offering fewer incentives than years past and more competition for the same shoppers, understanding the full capacity of what shoppers are able to purchase is high on dealers’ wish list this year. 

In response, retailers and OEM partners are combining traditional in-market shopping data like make/model preferences, income data, along with other household economic insights to help retailers better find, target and segment consumers who are not just in-market for a vehicle, but those who have the financial capacity to purchase this holiday season. OEMs and retailers can then run more effective retention, acquisition, and conquest campaigns across digital channels. 

This alternative data is uniquely built using robust data sources, including anonymized, direct-measured asset data, estimated income and affluence, as well as aggregated credit information. This data is uniquely predictive of a prospective buyers’ financial capacity and can help OEMs and retailers gain fuller visibility into a person’s or household’s financial standing. 

This level of data enables OEMs and retailers to differentiate and reach online consumers that are more likely to have the financial capacity to truly purchase their products and services. Anonymized household economic data combined with discretionary spending, credit, demographics, buying behaviors, and insights into make and model preferences, deliver better-matched auto audiences that are more receptive to holiday campaigns and offers. 
Sophisticated data unlocks new opportunities for consumers 
For their part, lenders are also relying on new insights to identify lending opportunities this holiday season. While credit reports remain a strong indicator of credit history and past financial reliability, Fair Credit Reporting Act (FCRA) compliant information that is not included in traditional credit report data has the potential to help responsibly expand consumer access to credit opportunities. 

With greater insight into the payment history of thin or no file consumers, auto lenders have the opportunity to expand their net and offer access to new customers that may have previously been overlooked in traditional models. Leveraging newer forms of alternative data for these consumers can also be done in a real-time, frictionless environment. 
With the tools and data resources available today, there are new ways to identify and score more consumers, and at the same time minimize risk. By widening the scope, via Equifax  differentiated data for example, consumers and auto lenders alike can find more opportunities that may have previously been hidden. These additional data sources today cover credit and payment histories for the following:   
• Telecommunication and utility data  
• Consumer permissioned banking data  
• Specialty finance data  
• Income and employment data  
No doubt, the end-of-year holiday buying season will feel much different this year. As the country sorts through what may feel like the last gasps of consumer spending from the stresses of the economy, the automotive industry now finds itself coping with challenges to keep sales activity alive as we enter the final stretch of 2023.  
However, with the right data and insights, automotive retailers, OEM partners and lenders can ensure they’re getting the most out of their holiday marketing investments by identifying the right customers who have the spending power to maximize each and every dealership or website visit during the holiday. 

Lena Bourgeois
Lena Bourgeois
Lena Bourgeois is the automotive general manager for Equifax, responsible for leading a high performing automotive team across sales, product, technology, operations and marketing. For more information, please email [email protected].
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