They will soon be buying and servicing more cars and will make up a big part of your future workforce. Are you ready?
For some, the next generation of auto retail consumers appears unproductive, impatient and self-entitled. But what if they are really just misunderstood? Would this change the approach that dealers are taking with millennials?
There’s been a lot of talk in the media and at auto industry conferences about millennials, their car buying habits, and the impact of their tech-savvy ways on all retailers. Time magazine called them: “The Me Me Me Generation,” and the author portrayed them as a group of lazy, entitled narcissists, many of whom still live with their parents.
But the idea that millennials are any of these things likely stems from a misunderstanding. They see the world of work and technology much differently than previous generations.
“They’re savvier, they’re smarter, they’re educated,” said Derek Sloan, Vice President of Sales and Training at Sym-Tech Dealer Services, a Canadian provider of training programs, protection products, F&I software and other support.
As consumers millennials don’t just make purchases — they do lots of research, he explained. They check reviews, go on social media websites and they send out inquiries to businesses to get additional information. They are keenly aware of what is out there, said Sloan.
And when it comes to the automotive industry, they’re more well-informed than many car buyers were in the past, said P.J. Diegel, a 24 year-old student of the Automotive Business School of Canada in Barrie, Ont.
“The whole idea of sitting down and expecting every little tiny detail to be explained by a sales rep can seem a bit monotonous if that research is done before millennials even walk into a store,” said Diegel.
Millennials want simplicity, authentic conversation, and they want to do their own research and not have something shoved down their throat, he said.
Mathieu Bellerose, a 22-year-old student pilot based in Montreal, Que., owns a 2010 Toyota Yaris hatchback that he purchased in January 2017. He did his own research prior to entering a dealership to ensure that he had enough knowledge about vehicles to buy a reliable car.
He says most people don’t take the time to do their research when it comes to purchasing a vehicle, and as a result, end up buying “crappy cars” that don’t last long.
“I have a feeling that one of the reasons that this is the case is because they [consumers] just want to get the car and not bother with the whole process,” Bellerose said in a written response to interview questions from Canadian auto dealer. “One of the many issues with my generation is that we want everything done quickly — and we want everything now.”
Another millennial buyer, Jérôme Lacasse, also did his research online because it was faster, easier — and because he found a generous rebate. The 29-year-old Royal Canadian Mounted Police officer, located in Canada’s Northwest Territories, purchased a 2016 Ford F-150 pickup truck in October 2016.
He had initially visited the website of the dealer he had bought his previous truck from, but since the prices were not great and there were no attractive deals, he decided not to contact them.
By the time Lacasse picked up his new vehicle — which he bought in Edmonton, Alta. to save $6,000 — all the paperwork had already been done online and over the phone. The dealer picked him up at the airport and drove him to the dealership. Twenty minutes later, Lacasse was driving off the lot.
Dealers will need to embrace technology and data to overcome this hurdle. This will help empower millennials to make decisions for themselves at their dealership, both as consumers and employees.
Connecting with millennials as consumers
To really understand what millennials are after, Sloan suggests looking at other industries: analyzing consumer buying habits, the changes that are happening in non-automotive fields, and what millennials are doing and how they’re having an impact on these areas.
Take Amazon, for example. The e-commerce giant has been very successful at solving the “I want it now” mentality that millennials seem to have adopted, according to Stephan Lalonde, National Dealer Group Manager of Eastern Canada at CarProof, a Canadian provider of vehicle history and appraisal and valuation reports.
“Everything is based on computers, so if they want something they just order it online and it’s there in two days,” said Lalonde. “We believe that that’s where all industries are going, and as an automotive industry we need to get there too.”
Lalonde says he sees two auto industry companies that have already started this: Carvana in the U.S. and Hyundai’s Genesis model in Canada. Both are focusing on the online purchasing experience by providing consumers with the ability to choose a car, configuration and options — all online and without having to go to the dealership.
As for test drives, they will drive to your house or place of business and allow the consumer to test drive the car from there, said Lalonde. “These companies are allowing you to not have to displace yourself anymore. They will come to you. And I think that’s the future that we’re facing,” he said.
Other experts in the industry, such as Annie Deslauriers, Vice President of Customer Experience and Operations for Sym-Tech Dealer Services, suggest modernizing the F&I process to better match the millennial expectation.
She says the traditional model of F&I that is currently in place needs to become more transparent and the information more readily available for millennials to be more receptive to buying these products. “So what needs to happen to this space if we’re going to respond to this age group — and in fact all age groups at this point in time — is that we need to bring more transparency and bring this information at their fingertips,” said Deslauriers. “And today it’s absolutely not there.”
The idea would be to introduce more transparency right from the start — not just for pricing, but providing access to what the products are in the first place. And the process would need to be accessible through technology mobility.
Connecting with millennials as employees
There’s also the issue of employing millennials, who will increasingly make up a big portion of the workforce in dealerships.
Unlike baby boomers who learned from experience, the new generation of consumers can easily access information, but are often thin on actual experience. Even though they don’t have 20-plus years of experience, they are often expected to do the same job that baby boomers are leaving behind.
“What the millennials expect now is that their employers will provide them with the tools available to help them succeed, and we must set them up for success,” said Lalonde. “They’re the most tumultuous employment group. They demand to be challenged, engaged and demand autonomy in their roles to make those decisions.”
Dealers will need to embrace technology and data to overcome this hurdle. This will help empower millennials to make decisions for themselves at their dealership, both as consumers and employees.
Millennials are used to a certain way of living and acting because of the technologically-oriented world they are being raised in. If dealerships are going to succeed with them as customers and as employees, they will need to adapt and shift their processes to better suit their expectations.
Mathieu Bellerose
