Assumptions about Generation Z abound. Born in 1997-2012, this group has been pegged as needing instant gratification, from seamless online purchase experiences to real-time social media engagement. However, according to a recent study by CDK Global, this assumption isn't necessarily true when it comes to buying a car.
CDK asked more than 1,100 shoppers of all ages who recently purchased a vehicle about the car-buying experience. Turns out Gen Z respondents spent more time weighing decisions than any other generation. Unfortunately, they also found the experience of buying a car more frustrating than any other group and were the least likely to recommend a dealership to others.
Dealerships can't afford to shrug off these insights. Gen Z's spending power is on the rise. According to a recent Bloomberg report, the young students and professionals in this group command $360 billion in disposable income. It's smart to figure out how to court this group because the key to longevity is winning over multiple generations.
This is especially important in today's retail environment when dealers are selling anything they can get their hands on and consumer loyalty is falling by the wayside as vehicle availability reigns supreme. The old notion of "just get them into the store and into a test drive" won't win today when there's limited inventory selection to offer in-stock options.
A salesperson who can build rapport with Gen Z consumers by nurturing one-on-one relationships built on stellar service can keep this cohort loyal once the inventory shortage is resolved.
Here are four tactics to help your dealership create an experience that will appeal to Gen Z buyers.
1. Answer every question. Eighty-one percent of survey respondents said they want time to understand their options, both online and from a knowledgeable dealership representative. If your sales team and business development center agents push for the appointment before answering every question, you're going to miss the boat with these buyers. A hard-sell approach from the beginning also signals you'll likely be difficult to deal with in-store. Instead, coach employees to be well-informed on both your vehicles and your buying process so they can answer detailed questions through the buyer's preferred channel. Next, audit your website. Are your vehicle pages detailed? Do you offer walk-around videos? Are digital retailing tools easy to find and navigate? Do you explain taxes and fees? The more information you can provide the better.
2. Audit your digital to in-store process. According to the survey, Gen Z found it more difficult to buy a car online than any other generation. For 56 percent of respondents, this was their first vehicle purchase, and the complexity of the process likely took them by surprise. Buying a car is not like buying a smartphone. There are seemingly endless options from accessories to service packages to finance and insurance. Your dealership must make it easier to buy, and one of the best ways to do that is with a seamless online to in-store process. Your digital retailing tools must be integrated with your CRM so all the work a customer does online flows into your store and into the hands of your salespeople. A next step is to make sure the people working the deal in-store are using the same desking calculation used on your website. A simple audit of the payment calculation on your digital retailing tool and your in-store desking tool should show the same payment and deal detail. This shows the customer the tools are accurate and trusted, but it also opens opportunities to explain every step as you walk through the process together.
3. Educate about fees and payments. A big source of frustration for 52 percent of Gen Z respondents was additional and unexpected fees. There are a couple of ways to tackle this problem. First, you can create a comprehensive list of fees that you post on your website and also provide to salespeople and BDC agents so they can educate customers on what to expect. Second, compare calculators on marketplace sites so your eyes are wide open to what customers are seeing. Those calculators are generic and obviously don't include dealership-specific fees or even accurate tax information. The payment estimates they provide could be off by hundreds of dollars. Be prepared to explain this reality to potential customers and emphasize that your dealership website will give the most accurate payment. This is also an effective way to move them off a marketplace site and onto your site so it's your experience without the outside noise.