Cracking the Code on Generation Z: Three Ways to Prepare for Your Future Customers

With the rapid aging of society within developed regions such as North America, East Asia (China, Korea, and Japan), and the European Union, automobile manufacturers and retailers need to prepare to target younger consumers. Generation Z, defined as the next generation of buyers aged eighteen or younger, consists of an immense number of buyers with future purchasing power. In the United States alone there are about 80 million such individuals who constitute roughly 25% of the population.

So what can a dealer do to improve its chances with Generation Z?

1. First, dealers and OEMs need to cater to this generation’s familiarity with the internet and the use of it, both in and out of the dealership. Millennials and Generation Z buyers primarily use the internet to conduct research on brands, models, and options. Even more interestingly, Generation Z buyers are the first generation to use smartphones to conduct the majority of the research during a car purchase. Since Millennials and Generation Z also spend more time researching and shopping for their vehicles (17:29 hours compared to 14:32 for Gen X and 14:58 for Boomers, according to the “Car Buyer Journey Study,” 2017), dealers need to ensure the following bases are properly covered:

• User-friendly OEM and dealer web pages with responsive design
• Integration into third-party sources (i.e., used car comparison websites)
• Connectivity at the dealership
• Possible technologies that integrate with consumers’ phones at the dealership (e.g., technologies for uploading their configurations)

2. Generation Z’s views of what is important within a vehicle have changed as well. Compared to older generations, younger customers are focusing less on the brand, prestige, and exterior features and more on safety, reliability, and interior technology features (Gen Z Automotive Study, 2016). To meet their needs, dealerships can prepare themselves in the following manner:

• Ensure that technical features are properly displayed and reiterated on OEM/dealer web pages and configurators
• 56% of consumers already know which technology features they would like before visiting a dealership, so find salespeople who can discuss those technologies in depth and offer alternatives
• Inventory management of vehicles that fit Generation Z’s needs is important. Generation Z buyers tend to visit multiple dealerships; not having their vehicle of choice in stock could be the difference between a sale and a lost sale
  
  

3. Generation Z consumers, possibly because of their age and experience, are most likely to feel pressured in a dealership environment and, therefore, reported the lowest satisfaction scores during the Customer Sales Journey (66% compared to 67% Gen X and 80% for Boomers [Car Buyer Journey, 2017]). Therefore, it is important to train the sales staff to

• Provide more freedom to consumers regarding decision-making: conducting open discussions about technologies and features and educating the buyer tend to lead to more success in achieving a sale
• Stay in touch with them via cell phone by sending them notifications or paperwork via mobile platforms instead of using traditional pen and paper platforms

While the jury is still out on whether car sharing and similar options will replace traditional car ownership in the near future, we do know that Generation Z consumers still value human interaction during the car buying process (Cox Automotive, 2016). It is up to you to shape a dealership experience for them that will lead to a sale.