In today’s episode of Inside Automotive, Senior Director of Strategic Development for Cox Automotive, Jade Terreberry, discusses trends impacting car buyers’ preferences and how dealers can effectively address consumer needs.
Cox Automotive recently released a new ebook, which is a result of their Evolving Consumer Study. In the study, 2,500 U.S. consumers were directed to visualize themselves in the future and how it would impact their automotive purchase decisions. The insightful research uncovered three main trends.
Artificial intelligence is here to stay
The first trend uncovered is that consumers are getting more comfortable with artificial intelligence (AI) and anticipate it will drive a large part of their buying experience.
- Over 50% of consumers expect banks to utilize AI to look at broader sets of data to offer better financing terms
- 44% of consumers trust vehicle recommendations from AI over that of a salesperson
- 41% prefer an AI over a human underwriter for financial and deal structuring
Unsurprisingly, the biggest takeaway was that over half of consumers would not buy from a brand or dealership that does not display excellent customer service and personalization that will give them the buying experience they want.
Terreberry emphasizes that we’re entering an era in which automation and personalization reign supreme. Dealerships that get ahead of the curve and begin utilizing these AI tools will be able to serve customers best and provide them with the experiences that they desire without human intervention.
This will increase efficiency and allow dealerships to increase their profits. It’s a win-win for the consumer and dealer.
Consumers’ definition of “affordability” is shifting
Affordability is at the top of both consumers’ and dealers’ minds. However, the study uncovered an interesting shift among consumers.
Consumers are starting to define affordability in a new way. Instead of focusing solely on the vehicle sticker price, they’re weighing the value that the vehicle will provide.
- 62% of consumers said they will indulge in a new vehicle that will provide them with a better lifestyle experience or quality of life
- This sentiment was most prevalent amongst the Millenial and Gen Z demographic
Consumers want omnichannel buying experiences
Omnichannel buying refers to experiences that allow customers to pick up where they left off–regardless of where they started or stopped.
Consumers are doing more research online, and omnichannel experiences allow them to transition from virtual browsing to in-store purchasing seamlessly.
It provides the customer flexibility, convenience, and, most importantly, control, giving them more autonomy over their car buying experience. Consumers are now more educated, starting their car buying journey online by researching.
Omnichannel experiences allow them to feel like they’re genuinely buying a car rather than having a vehicle pushed onto them.
- 70% of consumers across varying age demographics desire an omnichannel buying experience
- 60% would purchase directly from a manufacturer’s website–sight unseen without a test drive– provided that there was a no-questions-asked return policy
Most interestingly, despite the demand for omnichannel experiences, most consumers couldn’t thoroughly define what this experience entailed.
Terreberry notes that this uncertainty hints that there’s a lot of room to grow, that dealerships aren’t yet providing this experience, and that there isn’t a one-size-fits-all solution.
Moving toward the future
Terreberry emphasizes that dealerships must adapt their operations and practices to meet changing consumer needs. To stay competitive, dealers must adopt emerging AI trends, address affordability by emphasizing value in the sales process, and meet the growing demand for omnichannel buying experiences.
"Dealers need to be thinking about how they start taking those steps into the future with connected tools that drive more efficiency for their organization and give them the ability to do more with less." – Jade Terreberry
