Only 17 out of 4,002 consumers prefer the current car-buying process, and as these “smartphone-wielding consumers” continue to embrace today’s digital world, this disconnect will begin to find its way to the bottom line, according to a recent whitepaper from used-car leasing app Fair.
“No matter their stellar customer service or revolutionary sales practices, today’s car dealers have a universal problem: they’re stuck with an analog sales model in a digital world,” Fair wrote in the whitepaper. “And it’s not meeting even the base expectations of the modern consumer.”
Dealers have worked hard to improve the dealership model over the past few years, even embracing finance apps and digital storefronts.
“But no matter these incremental service improvements, the vast majority of car buyers still eventually end up where no other industry would dare put them: in a back office, waiting on paperwork,” according to the white paper. “… This same strategy — clinging to a flawed delivery model because ‘that’s how it’s always been done’ — has spelled disaster for countless global players who were late in fully addressing the demands of the digital age.”
Millennials have the “full attention of corporate heads and cultural tastemakers alike” regarding what they buy and how they buy it, as this age demographic represents around $200 billion in annual buying power in America, Fair wrote. “And that preference increasingly revolves around their most valuable economic portals: mobile devices.”
In fact, many auto lenders plan to increase their investment in direct lending and mobile applications in 2018, according to a poll conducted at the 2017 Auto Finance Summit.
Out of all attendee respondents, 35% said direct lending is where they will increase their digital technology investment/spending the most next year. Closely trailing the direct lending percentage is mobile applications, in which 32% of respondents said they would increase their investments in this digital technology next year, according to the poll.
Two-thirds of millennials prefer digital shopping over shopping in physical stores, according to a 2017 eMarketer study. Additionally, only 26% of respondents in a 2015 Accenture automotive study said they want to chat online with dealers, spotlighting how many car buyers dislike the idea of even being contacted by a member of a dealer’s sales staff.
“When it comes to buying, young people want to take things at their own pace and on their own devices, while curating their own information about the purchase,” Fair wrote. “For companies who honor this new consumer code, the dividends can be huge and ongoing — with 60% of millennials saying they are often or always loyal to the brands they currently purchase.”
