There’s a lot of hype in the market about the impending death of brick-and-mortar dealerships. Tesla is banking on this supposed doomsday already by closing several of its retail locations earlier this year. With e-commerce sales growing at a rapid pace every year, and AI that is designed to make these purchases almost intuitive, it seems that the days of brick-and-mortar are nearing an end.

Or are they?

Gen Z – The Retail Generation

Generation Z is defined as the demographic cohort born from about the mid-1990’s into the early 2000’s. This generation comes after the oft-spoken-of millennial generation, and has grown up in a post-9/11 world. One unifying factor of this generation is that they have never known a world without internet or smart phones.

All of these circumstances might lead you to believe that Gen Zers would want to buy everything online, but this is not the case.Gen Z

A recent study conducted by Oracle NetSuite, Wakefield Research and consulting firm The Retail Doctor determined that Gen Z consumers are more likely to do most of their shopping in brick-and-mortar stores than their older counterparts. In fact, 43% of millennials and Gen Zers are likely to do more in-store shopping this year than online shopping, compared with 29% of Gen Xers and only 13% of baby boomers.

According to the study, 57% of millennials and Gen Zers said they had a positive view of the in-store shopping experience while only 40% of Gen Xers and 13% of boomers felt that way.

Gen Z and the Car Buying Experience

What does this mean for automotive brick-and-mortar? It means that the future of auto sales lies in real-life customer experiences. This doesn’t mean that online is not important, because it is. It is actually an integral part of the future of auto sales.

However, while there does appear to be a paradigm division surrounding the future of online vs. brick-and-mortar, not every manufacturer is shutting down retail points.

Some Automakers are taking note by turning dealerships into customer experience centers. Because the research shows that Gen Zers crave experiences more than tangible items. Because of this, the automobile dealership of the future has to be able to deliver these experiences without overtly trying to “sell” anything. 

Dealerships of the Future

The future of brick-and-mortar is headed into uncharted territory. Gen Zers have grown up with technology at their fingertips. By nature, they will not interact with brick-and-mortar the same way as previous generations. Technology will play a bigger part.

It’s not hard to imagine a hybrid of online and in-store shopping. We already see this in the physical Amazon stores that are popping up in a few cities around the U.S. The dealership of the future will have to provide an immersive physical experience that syncs seamlessly with the buyers virtual online life.

It is entirely possible that Gen Zers will experience a time in their life where they can visit a dealership, take a test drive, and complete a virtual purchase on their phone before driving away. 

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