Growing Auto Sales By Embracing New Demographic, Social & Technology Trends
Dramatic advances in technology, shifting demographics, sprawling urbanization, evolving consumer preferences and major macro-economic forces are all converging to mold the next era of the automotive industry.
While focused on and heavily invested in modernization, improved service and customer experience, the sales and marketing functions of new and pre-owned car dealerships continue to straddle the past and future.
The automobile business has been a leader in adopting IT advances—with online listings, digital advertising and social media becoming central to automotive marketing and sales, from car manufacturers on down to franchise dealerships and independent pre-owned car sales operations.
As early and aggressive adopters of online marketing, dealerships see a constant demand for more traffic to their websites to build the volume and quality of sales leads. However analytics show the techniques for driving traffic to dealership online portals and social media platforms have already been quite effective.
The same stats show that 50 percent of daily traffic immediately bounces away from most car dealership sites because of competing and conflicting messaging, distracting graphics and awkward navigation, engagement and interaction tools.
This harsh reality has been somewhat obscured by the now decade-old narrative that young people are just NOT interested in buying cars.
This is an oversimplified and erroneous conclusion based on the statistic that today only one-quarter of 16-year-olds get driver’s licenses, down from half of all 16-year-olds getting licenses in 1983.
The essential fallacy of the diminishing youth demand forecast, is that it conflates car ownership with personal mobility. This reality is at the heart of the 321 Ignition formula for success, now being shared with pre-owned and new car franchise dealerships across America.
It is true that the Millennial and Generation Z population tends to be less focused on acquisition of cars than on immersion in diverse experiences like tiny home living, adventure travel, and filming their exploits on smartphones and Go-Pros and sharing these life-experience mini-documentaries on social media.
While the enormous and culturally dominant Boomers are in the homestretch of their careers and retiring, with a commensurate wind-down of their hyper-consumerism, Millennials and Gen Z are just starting their most financially successful, family formation and associated acquisitive years.
Significantly, the Gen Z population, born after 1996, is the fastest growing demographic since the Boomers, already eclipsing Millennials—this year becoming 32 percent of the total U.S. population.
The growth rate of this younger demo is the key to future of continued expansion and the profitable evolution of the auto industry.
In fact, recent studies show that the Gen Z population is already far ahead of the preceding Gen X and Millennials in planning and saving for home ownership and family formation, with their sheer numbers heightening the impact of this trend.
And of course starting a family, migration to the suburbs and buying a home is almost always tied to automotive purchases, often of multiple vehicles.
Though Millennials and Gen Z consumers bristle at the absurdity of buying a car that is parked and idle 95 percent of the time, they are also the most mobile generation in history! Their music, the social contacts, their finances and their work are all always as close as their laptop, tablet or smartphone. This allows them the freedom to be on the go at all times.
The integration of these technology tethers into even the most modestly priced new cars—in the form of Bluetooth, on-board Wifi, Apple Car Play and Android Auto interfaces—has already become a more important buying factor for younger car shoppers than traditional values like high performance, expansive passenger and payload capacity, and bold distinctive styling.
While population growth will sustain auto sales at roughly current levels, the intersection of Millennial and Gen Z sensibilities and the proliferation of new technology is the real nexus of redefining personal transportation options. And this will be a key element in the next epic surge in the automotive industry.
We are already seeing the gathering of this storm of change in the ubiquitous growth of ride-sharingand the impending mainstreaming of autonomous or self-driving vehicles, as well as the first experiments in subscription sales for the use of varying vehicles within a brand line-up on demand.
The net result of all these changes is that while personal ownership of vehicles may trend downward, the total engagement of the youth population with all the new mobility choices is likely to dramatically increase the demand for vehicles of various kinds.
Even the coming boom in electric vehicles—after a lackluster 20 year ramp-up—plays directly to the Millennial and Gen Z buying group. In addition to the appeal to the youthful commitment to gentler carbon footprints and less squandering of resources and quality of life of future generations, electric vehicles offer the enormous advantage of having far fewer parts prone to wear-and-tear and acute random failure.
Ease of maintenance and less troublesome service are important for younger generations already decades removed from the analog mechanical age of the late 20th century.