Young people are increasingly buying cars on their smartphones, and have done extensive research before stepping onto dealer lots, a new study says.

In its third-annual automotive buyer influence study released Tuesday, car-shopping website AutoTrader.com said 95 percent of those in their 20s and early 30s do their car shopping online — and 50 percent use their smartphones, up significantly from previous years. While researching, the would-be buyers visit third-party sites — like AutoTrader,TrueCaror Edmunds — 51 percent of the time, and are going to dealerships less and less.

These new trends have prompted traditional dealerships and other car-buying websites to invest in mobile technology and hire new workers to keep up with the changing buying patterns.

“Millennials are driving a lot of that change,” Isabelle Helms, AutoTrader’s vice president of research and market intelligence, said in an interview. “The declines and rises in trends are being led by this generation of car-shoppers.”

The Millennial generation — those born in the early ’80s or later — looks at more options and takes longer deciding, the study found. They visit an average of 10.1 car-buying sites, compared to 8.8 sites visited by all other age groups. While the average buyer spends 15.5 hours shopping, Millennials spend an average of 17.6 hours picking a vehicle.

“There’s a lot to be learned,” Helms said. “They like information, they like to be all-knowing.”

Overall, consumers are spending less time car-shopping, down to an average of 15.5 hours from 17.5 hours in 2011, the study found, because access to information is so much easier to obtain.

When they do get to dealerships, the study found 70 percent have already decided which make and model they want to purchase. They tend to gravitate toward smaller, compact cars, and like electric vehicles and brands such as Dodge, Helms said.

Helms said young people now want the dealers to explain features of the car more in-depth and to showcase the technology inside their preferred vehicle, as opposed to showing them a range of options. To help accomplish that, she said dealers are hiring new workers, especially younger salespeople who can connect with them.

Dealerships are also spending less and less money advertising in traditional media. The study found buyers are looking at places like newspapers (16 percent) and television (14 percent) less and less.

“They’re changing the dynamics of traditional dealerships,” Helms said. “What they expect from salespeople is changing in a very big way. Dealers are shifting ad space to be where the customers are.”

Car-buying websites are spending more to create appealing, user-friendly mobile sites, Helms said.

California-based TrueCar launched a mobile app in April 2013 and introduced a separate app this June that lets users sell cars.

“There’s no question that’s the way cars are going to be purchased in the future,” John Krafcik, president of TrueCar, said in a telephone interview. “For anyone that has a smartphone, it’s an intuitive thing.”

He said 40 percent of all TrueCar traffic is on mobile devices, and millennials are a “huge and growing portion” of that customer base.

“If you want to impact buyers,” AutoTrader’s Helms said, “thinking about a digital strategy is critically important.”

Article by Michael Martinez published in The Detroit News

 

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