The Center for Data Innovation spoke with Nikos Vavoulas, chief technology officer of Spotawheel, a car dealership platform based in Greece with a presence in Greece, Poland, and Romania, which developed Spotmechanic, a certified on-site technical inspection service for buying and selling second-hand cars online. Vavoulas discussed how predictive analytics can help identify which used cars are most likely to be reliable.
Eline Chivot: What inspired you to create Spotmechanic and then to subsequently expand into Spotawheel?
Nikos Vavoulas: Well, Spotmechanic was an idea that came to Charis Arvanitis, our CEO, after having been through the process of finding and buying a used car for him and his family. He “spotted” the gap between the need of having a reliable, unbiased, and professional mechanic to check the car he wanted to buy and the actual network of car dealerships and mechanics that cover the truth in many cases. And this is how the idea of Spotmechanic was born. In April 2015, it went live as a trustworthy used cars inspections service.
Spotawheel was the natural sequence of Spotmechanic. We realized that there was a much bigger potential with this new product which was fixing the whole customer journey, starting from the search of a used car to owning it. This potential was the perfect match to the founding team’s vision: to create something big!
Currently, Spotawheel offers an unbeatable package for its customers: Thoroughly inspected vehicles that can be brought to your doorstep for a test drive only with a click, a seven day money-back guarantee no questions asked, and a car warranty of up to five years. In addition, we were offering virtual test drives for our customers long before COVID-19, and already more than 25 percent of our customers bought a Spotawheel car purely online.
Chivot: Can you explain how you are using predictive analytics and how your platform works?
Vavoulas: Our platform is a used car marketplace built around customer needs. We provide all the information our customers need to get an educated decision on their next car, from detailed pictures and videos to the complete list of car’s features and extras. We further facilitate the customer’s decision by offering a test drive wherever they choose and all the financial tools they can use for their purchase in order to make the process as easy and smooth as possible. Predictive analytics is what enables us to sell the most reliable cars and offer an up to five-year warranty.
In 2015, we launched Spotmechanic and since then we have inspected hundreds of thousands of European cars. By utilizing inspections’ data, along with market data we collect, we have created proprietary models that predict cars’ reliability—and that has been proven quite accurate. Moreover, this is a decision tool that takes into account the specific car’s quality, the commercial profit opportunity, and market trends, to help us choose the right cars faster, price them accordingly, and sell them as quickly as possible. By developing such a predictive analytics model, we can grow our inventory faster and more efficiently in the markets we operate, allowing us to grow at scale.
Chivot: Do you collect other data other than technical data about the car? For example, do you compare how much a certain car is being sold for elsewhere?
Vavoulas: Data and business intelligence is at the heart of our operations. We collect and use both technical and inspection data to distinguish the best cars in the market, but also provide added value services to our customers when needed. We recently offered through our website a tool called “Spotawheel Inforoom” which is currently in its beta version. It provides an aggregated view of common issues that we found on specific cars during our inspections.
We also collect and analyze other data from various sources. One example is price tracking. At any given point in time, we know how much a car is being sold in the open market and how our prices are ranked in comparison to the competition. We also collect many other market data from various sources.
Our plan to expand throughout Europe, sourcing the best cars out there while scaling to thousands of monthly sales, has to have the right tools in place. To materialize it, we have already developed certain tools that help us identify buying opportunities across European markets with minimal human resources using a mixture of filtering algorithms, market price tracking, and AI. Last but not least, several business decisions are supported by market data analysis.
Chivot: Why do people choose to sell their cars to you rather than try and sell it themselves?
Vavoulas: We have earned our customers’ trust. They have come to know that by choosing us as their marketplace, the entire buy-sell process becomes simpler, stress-free, which is exactly our goal. People want to sell their car for a good price. Up until now, they were at a car dealership’s mercy and their huge profit margins. We, on the other hand, respect the sellers’ needs and have pledged to sell at the best price for them.
Many car dealerships have refused to allow our Spotmechanics to enter their facility, have copied some of our offerings (such as “pre-inspected” or “seven days money back”), or even provided longer but tricky warranties with, actually, no real added value.
What is important here is the fact that Spotawheel’s transparency has forced the whole used cars industry to start shifting. Personally, I believe it is to our advantage if the whole market moves towards real transparency and trustworthiness, and as a company, we support all dealers in that direction by offering special Spotmechanic packages to inspect their cars beforehand and use the inspection report for commercial purposes.
Chivot: How can digital transformation help a company like yours further expand?
Vavoulas: The problems in the used cars market are common across Europe. Spotawheel was created to address these problems. We help our customers find a reliable car following a stress-free journey and eventually make their everyday life easier.
Having said that, our goal is to fill the trust gap in more markets and to expand to seven European countries by 2024. As for the short-term, one of our goals is to further improve our AI-driven decision making tools. Car buyers were seeking safety and digital experiences for a long time. With COVID-19 these trends are becoming stronger and this is in our favor as digital presence and data-driven decisions are part of our DNA.