The landscape of the automotive industry is shifting. Recently GM invested $500 million in Lyft, Volkswagen invested $300 million in Gett, Toyota invested an undisclosed amount in Uber and in Getaround, Apple invested $1 billion to Didi Chuxing (Uber's biggest rival in China), Tesla has announced plans for a fully autonomous ride-sharing service called Tesla Network, and Hyundai is targeting Millennials with a new subscription program that will "make car ownership as easy as owning a phone."
With so much growth surrounding ride-hailing and ride-sharing services, one might think that the future of car buying is bleak...but think again.
Millennials are just waiting longer to buy cars, just like they are waiting longer to get married, buy a home, and have children.
It's important that dealers, automakers, and marketers understand who the next generation car buyers are since Millennials are positioned to become the dominant car buying group.
A new generation of car buyers.
- Half of Millennial car shoppers are open to any brand. Millennials won't buy cars for status, image, or brand loyalty. They view cars as a practical need instead of an emotional want.
- More than half of Millennials said they would buy an autonomous vehicle, with almost 75 percent saying they would be comfortable having artificial intelligence system drive their vehicle. Millennials are not as interested as other generations in raw engine horsepower or torque, instead they want affordable, environmentally friendly, sleek design, and high-tech features.
- Fifty-four percent of Millennial men agree that women are equal or better than men at car shopping, compared to 48 percent of Baby Boomer men, and 60 percent say that women are strong negotiators, compared to 49 percent of Baby Boomer men.
- Twenty-five percent of all consumers getting vehicle repair or service are Millennials. This will likely rise as Millennials age and increase the number of vehicles in their growing households.
- Seventy percent of Millennials say they are willing to pay more for quality vehicle maintenance/service. Millennials have a higher proportion of vehicles with extended warranties, and owners with extended warranties are typically more likely to use dealerships for service.
Here are a few tips to sell cars (or any product) to Millennials.
1. Mobile is a Must
Millennials leverage mobile in the car buying process for getting pricing, finding classified listings, locating a dealer, looking up specs, and reading reviews. On-demand info gathering and mobility throughout the sales cycle is a Millennial expectation. Millennials grew up in a response-rich, mobile environment and now expect prompt responses and mobile friendly communications at every crossroad.
Any touch point with a Millennial customer must be considered through the lens of mobile.
2. Highlight the High-Tech
Millennials are interested in vehicles that are extensions of their digital lifestyles. But are they willing to pay for the high-tech features? Yes. On average, Millennials are willing to spend $1,206 more on car technology over other generations.
Highlight how the high-tech features can seamlessly integrate with the Millennials' connected life.
3. Put Effort into Effortless
Millennials have extremely low tolerance for friction-filled processes. This is a generation that can summon a ride, groceries, or a movie at the swipe of a finger. A non-mobile friendly website, searching for a sales associate, filling out paper forms, and waiting for a test-drive are all friction points that will cause them to take their business elsewhere.
Millennials are aware and equipped to find a better offer or experience and won't think twice to walk away. It's imperative to make the car buying process--from pricing to service--as seamless and effortless as possible.
Millennial buying expectations are different from previous generations. Adjust yesterday's processes to adapt to tomorrow's buyer.
4. Don't Sell, Build Trust
Millennials are more likely than any other generation to be influenced by online content than the dealer or sales associate. In order to attract new buyers, sellers must deliver valuable content online where Millennial consumers are searching. Topics could include: do's and don'ts when researching for a new car, top sites to use when searching for a new car, and/or pros and cons of buying new or used.
Ensure your content is plentiful and as digitally native as they are so that Millennials can easily beat a digital path to your front door.
Delivering informative and high-value content geared towards Millennial interests and not just their virtual wallet will build trust with Millennials.
5. Promote the Proof
Millennials are massively persuaded by their peers. They lean into their robust social networks and savvy search skills to crowdsource their consumer decisions. Social proof is the concept of looking towards other people like us to help make decisions. Customer testimonies, media mentions, and case studies are examples of social proof that can ease the worried mind of a Millennial who is faced with unlimited options.