Gen Y the nation’s youngest car shoppers – who are more likely to shop online and on mobile rather than in your dealership – are now Australia’s largest demographic with 5.22 million people. What’s more according to Deloitte’s 2014 Gen Y Automotive study, 75% of them expect to buy a new vehicle in the next 5 years and here in South Australia that works out to be around 277,965 cars! The Baby Boomer demographic, despite increases in life expectancy, is shrinking and so too is your customer base if you haven’t yet shifted your sales and marketing focus to the digital age.
|Gen Y||21-35 years||5.22 million (22%)|
|Gen X||36-50 years||4.78 million (20%)|
|Baby Boomers||51-69 years||5.17 million (22%)|
Thankfully Gen Y consumers like their cars but they are not as devoted as older generations being twice as likely to dispense with their car if costs increase. Another study (Autotrader.com) shows that Gen Y’ers are image-conscious and aspirational in their brand preferences, so too are older shoppers but to a lesser extent.
At the dealership what are the critical Gen Y’isms that should you understand to ensure you’re capturing this growing and sizable demographic?
Be On Line, On Mobile and On Everyone’s lips.
The opportunity for dealers to influence the purchase decision is on line, where car buyers spend most of their shopping time and are making the critical decision about what make and model to buy and who to buy from.
(76%) over three quarters of new and used car buyers use the internet to shop but Gen Y’ers’ lead the way with 9 out of 10 Millennial car buyers using the internet during the shopping process.
In 2015 car buyers spent 16 hours and 42 minutes shopping for a vehicle with 75% of that time done online. Whilst many car shoppers (69%) initially know little about their pending purchase, by the time they step into a dealership – armed with their online research – there is only a small chance that they’ll purchase a different make/model.
Make it a priority to focus on a broad but integrated marketing strategy which provides seamless shopper experience across the range of devices, including a strong presence in the online inventory market place to effectively reach and influence online shoppers.
Whilst car shoppers use a range of sites to shop (ie manufacturers websites, dealer websites and search engines), third party sites are the most commonly used as their online reviews are found to be more useful.
Millennials more than other generations (50% vs 46%) used multiple devices to car shop, including desktop, laptop, smartphones and tablets, projected to grow to 80% as soon as 2020.
When researching online car buyers are comparing makes and models and pricing, including special offers on new cars and inspecting the used car advertised.
Irrespective of generation, car buyers cited the internet as the overwhelming driver that leads them to a dealership. Car buyers are increasingly ranking social networks as more important than dealership websites in their selection process and are willing to drive over 100kms to do business with a highly rated dealership. That means a 4-star rating or more.
Get this right and you’ve won (well almost) the sale, as 50% of ‘already informed’ car buyers will only visit one dealership. Compare this to visiting 5 dealerships only 10 years ago.
@ the dealership – a quick, efficient barter free buying process
It might be the digital age but good old fashioned customer service from your dealership still counts. Forget the ‘high pressure sell’ tactics, Gen Y’ers’ and this applies to most women as well, demand a barter-free buying process. The result – loyalty, customers who’ll buy from you again and importantly will share their positive experience with their social networks.
Paradoxically whilst GenY’ers spend more time researching online they are also more influenced by family and friends during the purchase process as compared to older generations.
Thus for Gen Y’ers in particular providing a positive dealership experience is critical, less like older generations who are accustom to the manipulative sales tactics often played out such as haggling, being upsold and other mind games. They want some quick, efficient help and to touch, feel and test the physical car before purchase. In other words, they’re seeking a customer advocate not a salesperson.
Immediacy is something Gen Y’ers have grown up with – making an on line booking or getting information is simply a few clicks of a button. The chances are you’ll lose them if you drive them to pick up the phone to make an appointment. Consider enabling mobile apps and web site chats to overcome this. The same applies for internet leads, contact them within seconds not hours which requires systematic follow-up procedures.
One US dealership, the Spitzer group put in place a no-haggle pricing policy on new and used vehicles, offering a competitive price from the get -go, forcing the sales person to explain the amount rather than trying to barter with the customer.
However, the biggest difference between the generations is the influence of social media, Gen Y’ers are 5 times more likely to use social media in the purchase process and this is expected to significantly grow.
When it comes to Facebook,
- 60% of consumers will trust a review from a Facebook friend more so than other sites
- Offer promotions or incentives and nearly half would ‘check-in’ to take advantage of various promotions. ‘Check-in’s’ imply endorsement.
- 43% would use Facebook to search for a local dealership
- Advertising on Facebook is also gaining traction, with 66% of car shoppers saying they have clicked on a Facebook ad, 2 times more than the previous year.
CMS Strategic Automotive Advisors is a bespoke accounting, financial and business advisory service for SA based family automotive retailers.
McCrindle Social Researchers, Australian population map generational profile 2015
Automotive News, August 6, 2012. Marketing to millennials: Make it online, fast, easy
Autotrader, 2016, Buying a car: How Millennials do it differently
Business, Jun 12 2013, Millennials skip showroom, use social media for car-buying
Autotrader.com, Next generation car buyer study, August 2013
Autotrader, 2015 Automotive Buyer influence study
Businesswire, ebay 2015 Motors Study
Digital Air Strike, 2015 Social Media Trends Study for the Automotive Industry