Fri, 19 Feb 2021 17:22:20 GMT
The automotive industry is being transformed by tech, but also by buyer’s that want more of it. Here Ed Howarth, managing partner at Oliver, explores the impact of today’s accelerated shopper mindsets.
Making up the majority of the UK's working population and holding the bulk of the spending power, millennials have developed a unique approach to buying. With affordability, accessibility and personalisation high on the millennial agenda, car dealerships need to adjust their sales model to survive - especially as millennials and Gen Z’ers will account for 75% of all vehicle sales by 2025.
Despite the media portrayal of millennials as yuppie London flat sharers, in reality, most millennials are now in their 20s and 30s. They are the generation who came of age during the recession, managing record unemployment and joining the workplace during a period of unseen economic instability.
The tech-savvy kids who grew up using Facebook and googling everything from celeb fashion to their science homework are now the most informed consumers the auto industry has ever seen. Firmly established in their careers today, they’re reaching economic maturity and have the spending power to prove it. But they’re doing so wisely.
This means that they do lots of research before committing in cash. On average, millennials spend more than 17.6 hours browsing cars online before stepping foot on the lot. Chances are, they’ll know just as much as the dealer by the time they choose to engage with a sales rep.
To succeed, informative and interactive content needs to be shared across a variety of platforms that are optimised for user engagement. Think Youtube, social media and targeted ads in addition to your website. With 45% of millennials now being mobile-first consumers, content across a broad spectrum of mobile devices needs to be the number one strategy for growth.
Older generations relied on word of mouth, recommendations and their local dealer for guidance on the best vehicle makes and models. Nowadays that’s all changed.
Despite the swathes of information at their fingertips, evidence suggests that millennials aren’t enjoying the car buying process as much as automotive dealerships probably think. In fact, they’re more likely to feel bored and confused than excited.
This impatience means that when millennials do make it into the lot, however, they are much more likely to buy. 38% of those aged 25-34 years old intend to buy a car on their first visit to a dealership. For 17 to 24 year-olds, that figure rises to 48%.
For Gen Z, 71% of say that they need to be aware of all the buying options available to them - making them more likely to engage with competitors and more likely to buy based on research than brand reputation. Add to that the fact that, 70% agree that they’re less loyal to brands than previous generations. In today’s world loyalty is earned through social media, positive reviews and memorable consumer experiences. Dealerships need to capitalize on this to replicate traditional brand stickiness.
To win, dealers need to make the buying process accessible, seamless, easy and memorable.
Optimise your digital efforts and your in-house sales process will be quicker and easier than ever before.
In addition to the way they shop, millennials also have different priorities for the vehicle itself. Individuality and personalization are key to the millennial mindset (just check out their social media feeds to see for yourself). A one-size-fits-all approach won’t cut it.
Millennials want their car to reflect their personality. So much so that they are willing to pay more for a vehicle that matches their aesthetic. Dealers can capitalize on this by pushing customisation in their advertising and promotions.
One way to do this is to create interactive brand experiences. Have customers customize their dream car in-store and online. The visual representation of the vehicle will captivate their attention and encourage them to purchase. Extended test drives are another high potential opportunity, giving consumers the chance to integrate the product in their lives before they buy.
For the younger age groups, tech isn’t just important for researching. It’s the key to how they interact with the world around them. Cars play a key role in keeping millennials connected. 72% indicate that connected cars are important to their social life and they want features that let them stay in touch on the go.
Top-rated features include:
1. An integrated GPS or navigation system
2. Satellite radio
4. MP3 player
5. 5G Mobile integration
When pitching to millennials and Gen Z, the automotive industry should focus on technology as a major USP. Millennials require systems that adapt easily to emerging technology so highlight in-built devices and their flexibility to secure their custom.
Technology can also be connected to the emergence of environmentally responsible car ownership. Increased awareness of our impact on the environment has made millennials the most conscious consumer segment in the market. Deloitte research found the majority of millennials expect to drive an alternative-fuel vehicle within five years and are willing to pay more for it.
To conclude, millennials won’t respond to the same marketing strategies as their parents. And car dealerships need to take note. Being born into an era of economic strife, this generation is commercially savvy and using tech to make informed purchasing decisions.OLIVER, Fri, 19 Feb 2021 17:22:20 GMT