Jamie LaReau
Jamie LaReau
Retail / F&I Reporter

With Gen Y, where is online selling headed?

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Imagine buying a car while picking up milk and eggs.

Bryan Murphy’s friend did that.

Murphy, the GM of eBay Motors, said his Gen Y friend wanted a used car and had a specific vehicle in mind. While grocery shopping, she glanced at her phone and saw that vehicle for sale on eBay Motors. She messaged the dealer with an offer. The dealer replied with a counteroffer, which she accepted. And, just like that, she had bought a car before she’d even bought and bagged her groceries.

Murphy’s story makes eBay Motors look great, naturally, but it also sends a broader message about Gen Y buyers: They are extremely comfortable buying anything online, even cars.

Which means only the most savvy and adaptable dealers will succeed selling to them in the future.

No test-drive?

Gen Y individuals, also called millennials, are those born between 1975 and 1995. I’m of the slightly older Generation X. I have researched cars online; I even negotiated and bought a car over the phone, from an out-of-state dealer, after seeing it online. But I still had a friend in that market test-drive it for me first.

To me, Murphy’s story was mind blowing. Someone would agree to buy a car over a mobile device without a test-drive first? It also seems unimaginable to not want to talk with a sales person.

But the Gen Y crowd does not need to touch or test what they buy first. They have no need to talk to a human being selling these items. In fact, buying online is often preferred to setting foot in a brick-and-mortar store and fending off a sales pitch, Gen Y experts have told me.

Change ahead

These Gen Y folks’ shopping habits spell a world of change for dealers.

For example, look at the millions of dollars many dealers are spending to build beautiful new facilities. Those facilities are meaningless to a Gen Y buyer who might not set foot in the store unless they have to take delivery of the car.

Likewise, dealers depend on the finance and insurance department to deliver hefty profits. Most F&I managers say they are most successful in selling products such as extended service contracts or tire-and-wheel protection when they can build a personal relationship with the customer and earn trust before that customer enters the F&I office. Can that trusting rapport be built via a smartphone?

Most dealers believe they’re in the people business as much as the car business. They view a sale as being as much about a relationship as it is about offering a reliable product for a fair price.

But the reality is many Gen Y customers are okay if that personal touch stays at arm’s length.

You can reach Jamie LaReau at jlareau@crain.com. -- Follow Jamie on Twitter

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