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Car Dealerships Feared The Internet Would Shut Them Down

Dealership / 7 Comments

Millennials just won't do what we expect.

Millennials have been the internet's punching bag for a while now. Like every new generation approaching and getting into adulthood, the older generations see the next generation as the worst generation yet. While eating their avocado on toast, the latest generation has been accused of hurting many industries by not taking part, such as real estate, beer (yes, really), breakfast cereal, honeymoon, diamond, and, of course, the car industry.

Mainly, if it's large investment items or something people have traditionally spent disposable income on, millennials have been blamed for its recent struggles. Car dealers definitely can't blame the younger generations it appears though. According to a study by Urban Science and a subsequent interview with Automotive News, younger buyers still want the dealership experience.

The results of the study are surprising given the rise of online shopping over the past 2 decades and younger shoppers tending to be the savviest of internet users. Randy Berlin, global director of dealer services at Urban Science, recalls working for an automakers internet program decades ago and how terrifying it was for dealers and saying: "Everybody thought, the world's over. The Internet's going to take over. … Consumers just didn't trust dealers or the manufacturers at all because the data they were looking for wasn't there."

Skip forward to 2019, and the survey of over 2,000 shoppers and around 200 dealers found that 81 percent of people shopping for cars trust the information they receive from a franchised dealership. It appears the reason here comes in the balance struck after the big surge in online shopping died down. Berlin points to price transparency being the key as 84 percent of the shopper surveyed said the price was a key point in deciding to work with a dealer.

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The transparency comes through people being able to shop around on the internet and compare prices to make sure they aren't paying more than they need to. The next values were placed on the quality of service and low-pressure sales techniques followed by experience and knowledge, and it's the youngest generations that are shopping around brick and mortar dealerships more. Generation Z and younger millennials are averaging 3.8 visits before buying a car versus older millennials and generation X at 2.4 visits. Baby boomers visit the least at 2.1 dealerships.

The kicker here is that, according to Auto News, the information given to the industry says shoppers, in general, are only averaging 1.2 dealer visits to buy a car. The takeaway here is likely that younger buyers, particularly first-time buyers, don't tend to have brand loyalty instilled in them yet and that's why they visit more dealers.

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