Once on Lot, Millennials Know What They Want
When they start the car-shopping process — much of which is spent online — 70 percent of Millennials are undecided as to what vehicle they want to purchase. However, by the time they get to your dealership, most already know which car they want to buy.
And therein lies the two-fold opportunity for dealers when it comes to this generation: influence the shopper online, but also serve as a consultant on the lot.
The dealership visit for these shoppers, says Isabelle Helms of AutoTrader.com, is now more about “the test-drive experience.” And it’s also more about consultancy.
Auto Remarketing caught up with Helms, who is vice president of research and market intelligence at AutoTrader, to talk about the 2014 Automotive Buyers Influence Study the company released this week.
The report covers a lot of ground; it dives deep into how consumers are shopping both online and in-store as well as the devices they’re using in the process.
For this particular installment of our look at AutoTrader’s study, we hone in specifically on the in-dealership experience for Millennials, something that Helms suggests has changed greatly.
This slice of the population now numbers 74 million, according to U.S. Census Bureau data included in AutoTrader’s study, and 95 percent of them are using the Internet as part of their car-shopping process.
When they start that car-shopping process, 70 percent of them are undecided on what they want, a ratio not unlike that of the general population’s, AutoTrader said.
But once they’re on the lot, Millennials are more decisive: 70 percent purchase the car they had in mind when they stepped on the lot, versus 66 percent of all car buyers, the study indicates.
“We know that over the last few years, consumers are visiting fewer dealerships during the shopping process. Today the average car-buyer visits 2.5 dealers. And as this research tells us, 70 percent of Millennials know what make/model they want and end up purchasing that make/model when they walk in to the dealership,” Helms said.
“So the dealership experience has to evolve with that. The consumer is educated; they know what they want. And when they visit they dealership, it’s all about the test-drive experience. It’s the test drive of the vehicle, but more importantly, it’s also the test drive of the technology,” she added. “So finding folks at the dealership that can showcase this technology and answer some of the more technical questions that they may have is something that dealerships need to be prepared to address with car-buyers. “
There are so many differences in the in-vehicle technology from model to model, the dealer needs to be able to answer the questions the shopper is bound to have for the specific car he or she has chosen, Helms said.
For instance, can the driver connect their devices with the in-car technology? What are the steps toward using the technology?
“What’s interesting is, consumers aren’t walking into dealerships anymore wanting to look and explore the various makes and models,” Helms said. “It’s, ‘No, I want this make/model and I want to learn more about the car. I want you to answer the questions for me that I couldn’t get answers to on my own by searching the Internet.’”
And much of this test-drive experience at the dealership has to do with the salespeople themselves, Helms said.
Millennials, she said, tend to want to work with a salesperson who is the same age and can better identify with and understand their specific vehicle technology needs. Many times, Helms said, younger female shoppers have preferred to speak with a female salesperson, because they found them more relatable.
“I think some of the more progressive dealers are starting to pay attention to this, and they’re diversifying their sales force a little bit at the dealership at little bit,” she said. “And because Millennials are asking for this, I think it’s important we listen and respond.”
One concern AutoTrader has also heard from Millennials is that of the sales pitch itself. Helms said the company found in last year’s survey that Millennials actually do enjoy browsing the lots for vehicles and engaging with a salesperson.
“The problem is, they’re not at all interested in the high sales-pressure environment, and often times they leave the dealership more dissatisfied than the average car buyer, which results in less loyalty for the particular dealership,” Helms said.
“I hate to say this, but they’re expectation is that they’re going to have an experience that is similar to what they encounter at an Apple store,” she added. “Unfortunately, when they walk in, they aren’t necessarily greeted with a consultant who is there to help ensure that they end up in the right car without a high sales pressure tactic.
“Again, I think some of the more progressive dealers in the industry today have caught on to that, and they’re making big changes at dealerships, changing their sales approach; some of them are moving away from commission structures and putting these sales reps on just flat salaries, which reduces significantly the sales pressure that the consumers face," Helms concluded.