By Rusty West, President & CEO, Market Scan Information Systems
For several years, a popular belief was that millennials were not interested in owning their own vehicle. With the rise of ridesharing, ride-hailing, and their growing interest in environmental concerns leading to more mass-transit solutions, a narrative was forming that the “me-first” generation was disinterested in shopping for their own vehicle.
Perhaps resulting from the pandemic, it turns out that millennials are, in fact, interested in purchasing their own vehicle. According to a recent J.D. Power study, millennials actually purchased more new cars than any other demographic during 2020, 32% of new car sales1. It marked the first time they ranked higher than baby boomers.
Additionally, from a recent study Market Scan conducted, we know they want to avoid the long wait times, haggling, paperwork, high-pressure sales pitches, and hours-long processes that have shaped the traditional showroom transaction experience at a dealership.
Spending Power of Millennials
The pandemic’s effect on traditional vehicle sales, combined with the increased purchasing power of millennials, has led franchised and used car dealers to recognize the need to change how they sell cars and trucks, to ensure they get their share of the business.
Today’s millennial consumers expect immediacy, transparency, consistency, selection, pricing, and payment accuracy. Similarly, dealerships are embracing and implementing tools and solutions to help them deliver such an experience.
One example of a digital retailing-focused technology that appeals to the needs of millennials is Shop.Click.Drive from General Motors. It provides a simple way to purchase or lease a Chevrolet, Buick, GMC or Cadillac vehicle online. Shop.Click.Drive enables consumers to model payments, personalize their vehicles, request a test drive, apply for credit, get a value for their trade, and other services online. At the end of the simple online process, buyers can have their vehicle prepped and delivered to their home through participating dealers, where available.
It’s the Technology that Drives the Experience
It’s the technology behind the screen of modern retailing solutions such as GM’s Shop.Click.Drive, Dealer Inspire’s Online Shopper and FRIKINtech’s SALESiQ that ultimately attracts millennials as car-buying platforms. The technology powering these and similar solutions tracks and continuously updates every parameter, policy, factor, and rule that can influence an automotive sale or lease transaction. This includes every lender program, every OEM rebate and incentive, all tax rates and application methods, and all registration fees and calculations.
The technology is available to give any company involved in automotive commerce access to the most comprehensive database and state-of-the-art calculation engine in the industry – within their own infrastructure and branded environment – making their products more powerful and compelling. This enables them to quote the most competitive, fully compliant, and all-inclusive payments for each vehicle and every consumer in every market – every time.
It is this type of shopping experience that helps move dealers closer to a model perfected by Amazon.com, and one that millennials have grown comfortable using. This level of convenience is exactly the difference millennials are looking for when they decide to research, shop for and purchase a vehicle today.
Traditional Dealers Are Well-Positioned
Traditional dealers are well-positioned to capture a larger segment of the millennial shopping pool, simply because they can drive the best of both worlds in the overall experience. Dealers can leverage sophisticated data, and technology-driven platforms, but they can also provide all the other services today’s driver needs, such as pick-up and drop-off service and repair, F&I options, test drives (if desired), and at-home delivery.
But technology is where it’s at for millennials, particularly through mobile devices and apps. Dealers are well-positioned to take advantage of this need. Advanced mobile technology and app offerings are being rolled out across dealerships that dramatically improve the salesperson-consumer dynamic. Dealership sales associates can input some very basic customer information and immediately showcase a list of available vehicles in the dealership’s inventory that meet both the consumer’s preferences and requirements for purchase, as well as considers the dealership’s terms and conditions for transacting.
Putting the power of digital tools into the hands of a dealer’s sales staff that facilitates a dynamic, streamlined, and transparent in-dealership experience is both relevant and timely; it is an extension of the mobile-driven modern retailing, the millennial customer has grown accustomed to.
The automotive universe was already on a crash course with advanced technology even before COVID-19, but if anything, the pandemic fast-tracked its evolution into the world of omnichannel commerce. Driven by today’s spending power-rich millennials, dealers would be wise to commit to fully embracing the power of comprehensive data and retailing solutions powered by state-of-the-art technology. Dealers who resist doing so will miss out on this sub-segment of shoppers, who are only poised to grow more discerning and demanding in the coming years.
About the Author
Rusty West is President & CEO of Market Scan Information Systems and has more than three decades worth of experience developing leading data and technology-based solutions for the automotive industry.