Inside Automotive with Jim Fitzpatrick, powered by CBT News

How Tessa Nadik and Rob DeGeorge See AI Empowering Dealers

• Jim Fitzpatrick • Season 1 • Episode 46

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In this episode of Inside Automotive, Cox Automotive leaders Tessa Nadik, AVP of Product Management, and Rob DeGeorge, Director of Product Consulting, discuss how artificial intelligence is reshaping dealership operations without replacing people. They explain why AI should be viewed as a tool to improve efficiency, decision-making, and customer trust, rather than a threat to jobs. The conversation centers on the foundational role of clean, integrated data, the importance of training employees to use AI effectively, and how consumer behavior is evolving as shoppers increasingly rely on AI tools during the buying journey. Nadik and DeGeorge also outline how dealers can evaluate AI solutions based on outcomes instead of hype and prepare their teams for long-term success as technology adoption accelerates toward 2026.

Topics explored in this episode include:

  • Why AI adoption depends on clean, connected dealership data
  • How AI can enhance productivity while elevating human interactions
  • Shifts in consumer research driven by generative AI tools
  • Evaluating AI vendors based on measurable results, not promises
  • Practical use cases for generative, predictive, and conversational AI
  • Steps dealers can take to adopt AI strategically and responsibly

Inside Automotive with Jim Fitzpatrick is powered by CBT News, your go-to source for the latest news, trends, and insights in retail automotive. Subscribe for more interviews with top industry leaders, dealership innovators, and experts shaping the future of automotive.

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SPEAKER_00:

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick:

Hey everyone, Jim Fitzpatrick. Thanks so much for joining us this morning. Joining us now in the studio is Tessa Nadick, who is the AVP product management at Cox Automotive, and Rob DeGeorge, who's coming in through uh Zoom. He's the director of product consulting at Cox Automotive. Thank you folks for joining me here in the studio and also zooming in. So I really appreciate all your time. Um let's jump right in here, Tess, if we can. AI is everywhere. Everybody's talking about it. Every dealer wants to know more about it. I think there's a lot of dealers that are very concerned about AI. Was it going to replace jobs and and such? And uh but at the end of the day, it's really a tool. But you know, there's there is a lot of hype, there's a lot of confusion out there. Uh can you help our audience understand better what AI really is and isn't in the context of automotive retail?

SPEAKER_01:

Yeah, I mean that's the million-dollar question, right? Is like what is AI and what is it set out to do? So I think the biggest thing is like AI is the buzzword, right? But the real magic behind AI, especially in automotive retail, is essentially solving problems that we've had for quite some time, just more effectively and more um intuitively than we've ever been able to do before. So you hear a lot of the fear around job loss and things like that and replacing it. And um, you know, I won't lie, there are jobs that get eliminated, things like that. However, the focus of AI is really enabling people, right? If you think about a dealership and the individuals that are part of it, like if you didn't have to do the administrative tasks, like imagine what you can do. AI cannot build relationships, it cannot converse with the customer at the dealership. So uh we think about AI a lot as like the chat interface, and like that's just part of it. I like to think of AI as kind of three different things, right? One is like what it powers behind the scenes, and that would be things like workflows, uh manual things that require you know human intervention today that shouldn't tomorrow. And then there is the experiences that consumers use, like ChatGPT and all of the orchestration that goes on behind the scenes. Um if we think about the research funnel, it's essentially collapse, right? They can go to ChatGPT, they can do whatever they need to do. Um, and then third is like the discoverability. And I think that's where a lot of the fear lies today is that like, will I show up? Is ChatGPT taking over the world? And the reality is like not today.

Jim Fitzpatrick:

Yeah.

SPEAKER_01:

Not tomorrow, right?

Jim Fitzpatrick:

You got a lot of runway.

SPEAKER_01:

Yes, we have a lot of runway there. Um the search journey is more fragmented than it ever has been. So being present in these different channels, whether it's in a marketplace like Auto Trader and Kelly Blue Book, your dealer website, uh ChatGPT is more important now than it ever has been.

Jim Fitzpatrick:

Sure, sure. And uh across Cox Automotive, how are you seeing AI currently changing the way consumers um are you know doing their research and buying vehicles? And what should dealers be doing right now to prepare for these evolving uh changes and behaviors that we see?

SPEAKER_01:

Yeah, so I think the things that we do know, right, is that search is more fragmented now than it ever has been. So in a recent study, I think almost half of consumers in an automotive journey, like purchasing a new vehicle, disposing of the current one, uh, used an AI source. Let's say ChatGPT, Perplexity, Gemini, whatever it may be. What's important to know about that in that stat is that that doesn't mean that they didn't use anything else. So when I say that search is fragmented, consumers are heavily relying on things like ChatGPT to give them information at the snap of a finger, right? Right. But they're still going to platforms like Auto Trader, Kelly Blue Book, um, you know, dealer websites, social because they want to validate their choices. Right. Consumers are not afraid of technology, they're afraid of making the wrong decision. A vehicle purchase is very expensive, right? So they are no longer just validating before they make their decision. They validated every step. Yeah. Awareness, consideration, and so on. Right. Of those half of the consumers that used AI to help in their uh shopping journey, uh, the majority of them said, um, like 98% said that it did influence their decision. However, they were still just as likely to go on platform and visit a dealership that they saw mentioned in there. So the reality is that we are building brand trust and brand reputation within this experience before they ever meet like a dealer website or come to a dealership.

Jim Fitzpatrick:

Sure. And we've all when when when we've all used chat, hopefully everybody by now has used chat. Um not everything on there is accurate. Right. So that that that I think still uh says to the consumer, you can use this to your point as a tool, but still go to Auto Trader and still go to these other resources that you've got to your point to validate because not everything's right.

SPEAKER_01:

Yes, yes, skepticism is baseline, especially for younger demographics. Like they don't believe things that they read in one place. So they're gonna validate across the board, right? So they are touching, there are more searches happening now than there ever have been before. They're just no longer linear, right? The the search journey is not linear, like SEO is still prevalent, right? We hear a lot of things in the space like, oh, is SEO dead? Yeah, we've declared SEO dead, I think, 20 times in the last decade. It's always around, it's just expanded into different channels, right? And things like um, you know, your marketing campaigns, your presence in places are more important now than they ever have been before. We used to think of those things sometimes as nice to have, but that's not true, right? Brand authority, reputation, and serving consumer needs is more important now, and it's going to continue to compound as these things continue to evolve.

Jim Fitzpatrick:

Yeah, very good point. Rob, with so many AI tools and platforms available, what advice do you have for dealers on how to evaluate, you know, with solutions that are truly effective, and how should they measure success?

SPEAKER_03:

Yeah, so the best advice I can give is this is don't evaluate AI by what it promises. Um instead evaluate it by the problems that it solves and the outcomes that it produces. Uh look, you know, AI, it's not magic, uh it's a capability. And so really you need to start with your biggest operational friction points uh and then look for AI to address those specific gaps. And so when you're evaluating, you really want to focus on on three things, and that is proof of performance, or you know, what kind of lift is it giving you or you know, in your appointment set rates, in your engagement, in your visibility. Also, it's really important that you ask for dealer specific case studies or um, you know, proof of performance is key. And then second, I would say transparency and control. You know, dealers understand it's important that you understand what the AI is and what it's doing and why. Um and you want to look for tools that are surface recommendations, not black box decisions. And then lastly, uh seamless integration. Look, the best AI is going to learn from data that is seamlessly integrated. It's gonna learn from your DMS, it's gonna learn from your CRM, it's gonna learn from your marketing, it's gonna learn from your inventory. And when those systems are disconnected and fragmented, it really hurts the ability for the AI to be effective.

Jim Fitzpatrick:

Yeah, for sure. I see you shaking your head on that. Did you want to add something to that?

SPEAKER_01:

Yeah, I agree with everything that Rob mentioned. Essentially, like, look for the problems that can be solved. Um, you know, if we're, you know, AI is the buzzword, right? And everybody is flashing it out there. It's like, hey, we're AI enabled. But what does that actually mean? It's less about the AI and more about the problems that are being solved, right, from the day to day. And look for the proof. Like AI, is it a black box? Absolutely it is, right? And it continues to evolve. But that doesn't mean that there's not case studies or initiatives that have been done that we've actually seen in real time at Cox Automotive that can show how to pave the way, right? It evolves, but there is proof, right? And use that proof and leverage it and figure out what how it best applies to your business and your cases and go from there.

Jim Fitzpatrick:

Sure. Rob, you've uh you've outlined a six-step plan for AI success, and I know you'll be sharing this on an upcoming webinar for your dealer partners that are out there. Can you walk us through uh some of the most critical steps dealers should be focused on uh on uh as this rolls out?

SPEAKER_03:

Yeah, absolutely. So first and foremost, understand the different types of AI. You know, um I think most people are are familiar with generative AI, but there's others out there. Um, predictive AI, LLMs, conversational AI, uh, computer vision. It's imperative that you as a dealer understand what those different versions are, how they work, what they do, the different applications that they fit into. Um another big one is to understand your current strategies and audit them as well as your current properties or solutions that you have in place that are using AI. You know, it's also it's so important that you're familiar with, you know, what solutions you have in place that are are already powered by AI and are using AI, good chance, there's a good chance that you're using vendors today that are offering or that do offer AI, but you're just not aware of that of it. And so um, for example, Vin Solutions, right? We're commonly known for our CRM, but there's AI solutions that are follow that now plug into Vin Solutions like predictive insights that can allow you to see what your customers are doing when they're shopping online behind the scenes, or uh there's uh generative AI, which now allows you to create conversational messages, which you can put in text and emails and send them to customers, or uh there's also um a virtual assistant AI that Vin Solutions has, which can communicate with leads that are coming in when the dealers are closed. So it's important that you're aware that for what solutions are out there that you have, and then what solutions that your vendors that you have in place today are offering that maybe you're not aware of. Um and then I would say another big one is to define clear goals for efficiency um as well as visibility and conversion. Um, those are really, really important. And then lastly, and most importantly, is to make sure that your data is clean, aligned, and updated. I would say that that is the absolute most important thing. Um, because as I mentioned it earlier, you know, the AI is only as good as the data that it has to work with. Right. Um and so making sure like for customer data that it is up to date, you've got the most current customer uh contact points, email addresses, phone numbers, addresses, um, and then aligning the the data between your different solutions, as I mentioned earlier, your DMS, your CRM, uh inventory, things like that.

Jim Fitzpatrick:

Yeah, for sure, for sure. Um, Tessa, as as he was mentioning, uh it is so vitally important that we're talking about clean structured data on all of these AI-driven strategies. How can dealers ensure that their digital presence is optimized and visibly uh, or I should say for visibility and authority in local markets?

SPEAKER_01:

Yeah, great question. And as Rob mentioned, like I agree. I think that it is like, if not the most important thing, um, very close to the top of the list. So when we say data, right, the best way that I can describe it in plain terms is like think about AI or like a Chat GPT as an engine. Okay. And the data is essentially the fuel. So if you have like clean fuel, you're putting it in, like the engine runs clean, right? Right, right. Whereas if it's contaminated or something is wrong, you and you know, it you have issues. So that's a a way to think about it. So when we talk about data, like making sure that you have all of the fields in there that make the most sense, right? The VIN. So if you don't have things like um, you know, vehicle conditions, things for your inventory that are important for consumers to know, you're gonna get passed up. Right. So we have the data that is available that you know we have on our platforms, and of course, like our clients as well, their data. So then there's schema. There's a lot of talk about structured data and schema, and like again, buzzwords or you know, terms that are used technically in industries. What that means is that the thing is. You might have lost a few dealers on the schema. Yeah, schema, all schema is is essentially it is the context that we provide to the engine, right? You have your data, and the schema says, hey, this is what this data is, this is what it means. It just provides context so that they know how to use that data, how to serve it to consumers, um, that it's most um applicable to the questions that they're asking, right? What is the best family SUV for me, right? That's natural language. That's how consumers search now. They they don't necessarily just search, you know, Ford F-150s near me. They do, but they want something that fits their lifestyle. So, like to understand in the engine what family vehicle means, you need to have all of those attributes in there. Does it seat seven? Does it have cargo space? All of those things, or help is how the engine will essentially know that, okay, well, this minivan is probably a good fit, or this SUV due to the attributes of that vehicle.

Jim Fitzpatrick:

Gotcha, gotcha. Um, Rob, AI is only as good as the people using it. What recommendations do you have for dealers when it comes to training their teams and choosing the right partners to support their AI journey?

SPEAKER_03:

Uh yeah, so number one is to encourage your teams to experiment with AI and really be human-centric in their approach. Um I would say also to identify and empower AI champions within your dealership. For example, uh like a specific salesperson that maybe more willing to experiment with or you know, engage with AI and empower that salesperson to really uh use AI to communicate with their customers or and uh and and recognize the results or within the dealership that that salesperson uh let's say has had uh by engaging proactively with AI and utilizing AI in the sales process. Um I think that uh when others leave that that salesperson is uh is getting let's say more response rate or uh or better engagement or higher closing percentages or uh it's really going to allow others to see their success and and also buy in uh to using AI as well. So I think that that's a big thing. Um and then you know, as uh AI majures or consider hiring you know AI for AI specific roles within your dealership. You know, internet managers were a big thing in the what late 90s, early 2000s. Well, I feel confident that here shortly it's gonna make sense to hire somebody that within your dealership organization that is, you know, an AI expert. Yeah. Um and you know, and that's right around the corner. So um, and then last I would say partner with vendors that are transparent and provide ongoing support and education. Um you know, not to scare you, but you know, AI is not here to replace people. Um, it is here to help people be more efficient, and it's important they provide with a vendor who, you know, is really providing that same type of message uh to your dealership.

Jim Fitzpatrick:

And is it so bad that if we find it it does uh replace headcount at a dealer? I mean, it's almost like we're trying to stay away from that. Like it's not gonna reduce headcount, nobody's gonna lose their job. But as a former dealer, that's the number one area that I'm spending, you know, or I was spending uh most of my money on was on uh on the employees, benefits and compensation and everything else. And if this is something down the road that is going to alleviate some positions that you've got to hire for, that's not a bad thing, right? That's a good thing.

SPEAKER_01:

Yeah, it's definitely a possibility. Or the roles evolve, right, and they change. So you might have like a role today that is very like task driven, and that might not be necessary anymore, but you might need more people on the floor to build relationships or do those things. So it is just shifting, again, away from tasks that are like very straightforward or take up a lot of time and allow the people, because again, like as Rob said, like it's all about the people leveraging the tool. Right. An analogy I like to use is like if I show up at a NAS car track and like race a car, like my car isn't gonna win me the race. Yeah, right. Like you need a professional driver. And you don't need to be a professional to use AI, but it's like what you put in is what you get out, like most tools in life, right? It's not gonna show up and solve all the problems for you. So, like having talented individuals on your team that are open to and curious about leveraging these tools are gonna be the dealerships that win.

Jim Fitzpatrick:

Yeah, yeah, no question about it. It is a phenomenal tool, it's definitely the future of our industry. We're gonna be as this thing evolves for sure. Um, I'll start with you, Tessa, as as we close out the segment. Um, what's the one piece of advice for viewers and listeners as they plan 2026 as it as it relates to AI? And and Rob, you just gave us a number of great tips there as well. But if you each had one thing to pick out that you said this is what we really want to share with the dealers today, what would it be?

SPEAKER_01:

Yeah, so mine's a little bit twofold. I know you asked for one. Uh, however, so I would say, like, first and foremost, like he um Rob mentioned, get your data cleaned up. And if you don't know what that means, make sure that you're working with a partner that can help direct you in that way, right? That is gonna be critical to success. Right. And the second part of that is don't be afraid, right? Again, like when new technologies come out and it's uh you know adopted really quickly, consumer behavior is changing, like there are a lot of opportunists out there that are gonna scare you, right? And say, hey, if you don't sign with us, or hey, all this search is happening in Chat GPT. Again, people are using Chat GPT, but traditional search is still kidding. 98% of consumers are touching a go, like Google at one point in time. Sure, sure. Um, you know, and you don't have to be on this journey alone, right? Like, look for partners that are paving the way that have, you know, have wins and failures. No one in a new technology should say, like, yep, we win every single time. And like, don't be afraid to try it out and fail. And like at Cox Automotive, like we have been working on these things for like 18 plus months, you know. And again, we have some really great wins and we have some losses too. So, like, at the end of the day, and the dealers can benefit from that. Yes, you can. Like, learn from other people's mistakes and don't be afraid to make mistakes yourself. So, again, like, you know, don't be scared. Um, look for people that can help guide you through the way and know that like again, like consumer behavior is shifting. So it is important that you pay attention to this and you pay attention to this now. That's right. Because AI is not the future, it's today. Yeah, and as we talked, like Rob mentioned, like you may be interacting with things that are AI or some type of intelligence and not even realize it. That's huge, right? Is like when you don't even know, again, like it should be a seamless experience, whether you're a dealer, a consumer, um, an OEM. Like it should be a seamless experience for you and for your consumers.

Jim Fitzpatrick:

That's right. I was talking to one dealer um last week and he said it was an eye-opener for me because I went to ChatGPT and I said, Um, tell me the the the the uh Ford dealer that's nearest to me to do business with. Okay. He's sitting in his Ford store. Yep. He didn't come up on the list.

SPEAKER_01:

Yeah, right?

Jim Fitzpatrick:

There's a problem with that. Yeah, there's a problem, right? That's when he said, uh oh, I you know, I I have to pay real attention to this.

SPEAKER_01:

Yes, and personalization is huge too, right? So like that that brings up a valid point. I know I'm giving way more advice than you asked for.

Jim Fitzpatrick:

That's quite right.

SPEAKER_01:

However, um we get a lot of feedback of like, hey, I searched this and I didn't show up, or auto trader didn't show up. Personalization, that's what consumers want. We're spoiled as consumers. We want things tailored to us and what it knows. So if we are sitting in the same place, Jim, and we're making the same search, we may get different results. Yeah. Um, so there could be something potentially wrong with like a dealer's feed or something like that. Or for whatever that consumer's preferences are, you're not showing up. And there's things that we could do about that, right? Like whether that's like you know, new content to make sure that like the consumers and the engines understand that. So the results and the main one of the main benefits of AI is that it is so personalized. And that's what we as spoiled consumers have been raised to now expect. That's right.

Jim Fitzpatrick:

So thanks, Amazon. Yeah, right? Here we go. Yep. That's right. We're actually counting on retailers now to know us. Exactly. To welcome us back and to say, you purchased this the last time you were in. Did you want to add this to the order? And you're like, wow, you know, actually, I do want to add this to the order. Right.

SPEAKER_01:

And in a dealership, hey, welcome back. We know you purchased this vehicle. Are you ready for your 10,000 mile service? Like, absolutely. We want to be catered to, we want a frictionless experience. So it's it's more important again now than it ever has been.

Jim Fitzpatrick:

That's right, that's right. And Rob, what about you? What's uh what's the one piece of advice that you you'd share with our viewer, our dealer audience today?

SPEAKER_03:

Um, my one piece of advice is like the real winners in 2026 are gonna be the dealers, not with the most tools. Um, it's that it's gonna be the dealers that are really intentional about choosing AI, apply it to real world problems, and then empower their teams uh to do the best work.

Jim Fitzpatrick:

Yeah, fantastic. This is obviously an ongoing conversation. I'm sure that NADA this year will be all abuzz as it was the last couple of years about AI. There's a lot of people out there, there's a lot of companies out there. That's say we have AI, we are, we're driven by AI, and you find out they're actually learning AI, right? But uh but Cox Automotive, you guys are at the forefront of so many of these different products. You've got such resources you can bring together. So I'm sure you're you're kind of plowing the way there, right? Yeah. For dealers. Yeah.

SPEAKER_01:

Absolutely. And uh, you know, one final piece is um you don't have to do everything at once. Yeah, right. Again, and like leveraging vendors, like just get started. If that means that you haven't used a Chat GPT or a Gemini, just see how it works, see how it engages. Like start getting comfortable. You don't have to do all the things at the exact moment in time. Just get started.

Jim Fitzpatrick:

Just get started. Jump in. Yes. The water's fine. Tessa Nadick, who is the uh assistant vice president product management at Cox Automotive, and Rob D. George, Director of Product Consulting at Cox Automotive. Thanks to both of you for joining me on the show today. Very much appreciate it. Don't forget you can sign up for the webinar or watch the replay anytime at b2b.autotrader.com. Just scan the QR code on your screen to register. Thanks so much.

SPEAKER_00:

Thanks for watching Inside Automotive with Jim Fitzpatrick.