PR & News Study Finds Gen Z Car Shoppers Spend More Time Researching

[Jeff Kershner]

CDK Global Study Finds Gen Z Car Shoppers Spend More Time Researching and Find Purchase Process More Difficult Than Older Generations

download the complete white paper <- links to DealerRefresh Resources

• 81% of Gen Z survey respondents say they want to take time to understand their options, where older buyers would rather finish the process quickly.
• Gen Z shoppers report they experience more problems compared to Baby Boomers, including 45% of Gen Z frustrated with waiting on a salesperson and 52% with additional fees.
• Gen Z shoppers are the least likely to recommend their dealership experience to a friend with a net promoter score of just 32 compared to 49 for Millennials and 53 for Baby Boomers.

HOFFMAN ESTATES, Ill.--(BUSINESS WIRE)--There are a lot of assumptions made about Gen Z—loosely, those born between 1997 and 2012—and the need for instant gratification, from simple online purchase experiences to real-time social media engagement. However, when it comes to buying a car, Gen Z reports to be more thoughtful and spends more time weighing decisions, while finding the experience of buying a new car more frustrating than any other generation, according to a study by leading automotive retail technology company CDK Global, Inc. (Nasdaq: CDK).

In a recent survey, CDK asked more than 1,100 shoppers of all ages who recently purchased a vehicle about the car-buying experience. It found Gen Z respondents, most of whom were buying their first car (56%), were least likely to recommend their dealership experience than older generations with a net promoter score (NPS) of just 32, compared to an NPS of 49 for Millennials and 53 for Baby Boomers.

With Gen Z most interested in understanding all their options (81%) compared to Millennials (73%), Gen X (60%) and Baby Boomers (45%), the need for education—both online and from a knowledgeable representative at the dealership—proves to be critical.

The survey results also show deeper insights into Gen Z car shoppers, such as:

• They found it more difficult to buy a car online (22%) than any other generation.
• Waiting on a salesperson ranked near the top of their list of friction points at the dealership, and 45% ranked it as the most frustrating part of buying a car.
• They were much more likely to buy luxury brands (39%) compared to Millennials (29%), Gen X (27%) and Baby Boomers (12%).

“Buying a car is much more complex than buying a smartphone. Consumers are presented with seemingly endless options like trim levels, stand-alone features, accessories, service packages, financing and insurance,” said Joe Tautges, chief operating officer, CDK Global. “In today’s world of simple and convenient shopping experiences, we not only have to make cars easier to buy, but we also have to meet consumers where they are based on their unique needs. By implementing more seamless processes at the dealership, sales departments can work more efficiently and spend more quality time with their customers explaining products and processes in greater detail.”

For more information, download the complete white paper here.

 

[Alex Snyder]

How to fix this:

Step 1: Dealers need to audit their cars on 3rd party sites to see what the payment calculation process is like

Step 2: Dealers need to list out all the places a payment can be calculated on their own website (don't forget the bland payment calculator that comes from your website provider and has its own page)

Step 3: Run payments through each calculator and note which one matches the payment you'd present to the customer on the floor in the 1st pass

Step 4: Remove anything that doesn't match #3

Step 5: Tell the OEM to fuck themselves over that shitty digital retailing tool that doesn't match #3. The $50-$500/month of co-op you're getting for that tool doesn't come close to the profit you'd get by missing a single car deal right now.

Step 6: Train your salespeople, phone answerers, and lead responding folks to never dismiss the online shopping tools YOU have provided your customers.

Step 7: Ensure your 3rd party payments match your website payments that match the 1st pass on your buyer's orders/worksheets. And audit this monthly. Hold everyone accountable.





P.S. this is how Vroom and Carvana are providing customers a better experience than you. You're already doing all the other parts better than them.

P.P.S. why am I focused on payments for the fix? Younger buyers are payment shoppers.

P.P.P.S. why is this all about online payments? Younger generations have grown-up buying from the internet. They have grown to trust the numbers they see and run away from anything that doesn't add up online. They are not calling you or visiting your showroom when your online numbers are out of whack. You don't even know how many are running away from your website.

 

[craigh]

• Waiting on a salesperson ranked near the top of their list of friction points at the dealership, and 45% ranked it as the most frustrating part of buying a car.

We have been playing with this concept in the F&I process as well. There's a sub-section of customers that are ecstatic when presented with the option of purchasing their F&I products on a tablet, rather than sitting with an F&I manager. They see monthly prices, they add it to their cart and build their own order - F&I gross averages higher than the F&I manager in testing and the process takes ~20 minutes instead of 35+ (maybe we just move slow in Canada though).

As a millennial customer, I want to do this entire experience online - show me the real payments, show me the payment for extended warranty, paint protection, etc. Let me see that for $10 a month I can add 3M wrapper and paint protection and I'm more than likely going to jump on it.
I may be the minority but I would rather skip the dealership process entirely if I can, but still purchase from a dealership that I can go visit if I choose to or if I have an issue.

Dealer groups up here are starting to offer this exact service, but they still do most of the deal over the phone as opposed to a completely digital transaction.