Gen Z and Car Shopping – dealers, are you ready?

The Harris Poll asked customers about their expectations and experience in buying a car and here are the results –

61% of Americans said that they get their primary personal vehicle from a dealership.

12% got theirs from a private seller.

45% of Americans said that they were comfortable buying a car online

47% said that they were not really comfortable buying a car online.

79% of Americans (four out of five) said that they wouldn’t buy a vehicle without having seen it first in person.

That being said, the younger generation is doing things differently.

35% of Gen Z got their vehicles from a dealership

45% of Millennials got their vehicles from a dealership also.

Percentage of those comfortable to buy a car from an online-only dealer -

54% of Gen Z

57% of Millennials

55% of Gen X

And when it comes to the various aspects of the process of buying a car –

59% of Americans hated working with a salesperson

63% didn’t like negotiating with the seller

And 67% hated the paperwork involved.

And a whopping two-thirds of Americans said that they would much rather pay a fixed “best available” price for a car rather than haggle to get a better deal.

This explains why online-only dealers such as Carvana and Vroom are growing in popularity and have a place among the top 20 brands among Gen Z!

While it is true that buying a car still remains a deeply personal and momentous event in a person’s life, there is a generational sea change when it comes to buying cars, both in terms of what and how customers are buying. The COVID pandemic changed how cars are sold – well, it changed the way everything is sold. And the Harris Poll clearly shows that things are changing from the way things were done traditionally.

With the whole world moving to preferring more online than an off-line experience when it comes to most things – including shopping and games and entertainment, it is important that car dealers also take this huge trend into account.

While there is a large number of people who would still go to a car dealer, take a test drive, talk to the car salesperson and then buy it off the lot, there is a group that would do the whole thing online. And there is a large number of people that forms the group that would do a hybrid – do a lot of research online and then buy the car at a physical store.

Car dealers need to keep this at the center of their strategy and create extremely engaging customer experiences for them and also nurture them at every step of the customer journey.

Creating excellent customer experiences is a very strong part of commerce across the world. Design thinking is a business strategy that prioritizes customer experience. It is about time car dealers stopped dragging their feet and jumped on board as well.

While getting your business online is crucial, it is imperative for car dealers and brands to ensure that the process of customers moving through online and in-person stores, before they actually buy, is something that is seamless and friction-free for customers. And these are customers that are used to the likes of superior experiences offered by giants like Apple and Amazon who make any buying process that spans the online and the in-person experience friction-free!

It is time car dealers started to simplify the paperwork and the buying process. The future is definitely a transparent customer-friendly process. And brands need to re-look at the way they operate, take a good hard look at their business models and modernize things before it all becomes obsolete. And they need to engage with customers right through their customer journey so they can move them through the funnel and convert them into a happy customer.

At the end of the day, it is vital that the auto industry rethinks its relationship with and the way it engages with its consumers. The pandemic gave the process a jump-start; now it just needs to get moving.