Every new generation puts its own unique stamp on the automotive industry, and each decade has seen significant changes in design driven by changing fashions, tastes, and financial considerations. The rising cost of fuel in the 1970s led to the popularity of smaller, more efficient cars in that decade, while the relative affluence of the 1990s and early 2000s gave us the SUV. But while Millennials have certainly made their preferences known when it comes to style (which is one of the reasons why curvier, more aerodynamic, more eco-friendly mid-size SUVs are king of the road), they are also driving more fundamental changes in how the automotive industry works.
Millennials are distinguished from earlier generations by having grown up with easy access to the Internet, and for that reason are often described as “digital natives” whose understanding of the world has been shaped by a constant supply of information. This tends to make them more sceptical about advertising claims, but also more impatient with older analog ways of doing things. When it comes to shopping, Millennials are often much more comfortable making large purchases online and tend for this reason to be less brand loyal. Given that the automotive industry continues to operate more-or-less as it has since the 1950s, it is perhaps unsurprising that Millennials are finding ways to disrupt it and remake it in their more dynamic image.
One of the most notable ways in which this is happening is through their customer paths. Not so long ago, shoppers would visit a variety of different dealerships and compare the vehicles and prices on offer, and the emphasis was on relationship building and bargaining. This is no longer the case: research indicates that most shoppers who buy from a dealership only visit one. They do all of their research beforehand, and once they’ve made their choice, they make their purchase.
For example, if a Millennial wants to purchase a used vehicle, they are likely to do two things: go online to search what is available in their area, and craft that search around the factors that are most important to them. Where an older shopper would probably think first in terms of brand or dealership, a Millennial will start with the basic features they want and go from there. If a Millennial finds a 2014 Honda Accord for sale that meets their expectations, they might do a little more research about that year model and whether or not it is a good deal, but their opinion is unlikely to be shaped by things like whether or not the car is being sold at a dealership. This is forcing the automotive industry to become more responsive to customer needs, and more focused on delivering a high-quality product in an accessible way.
While many of these changes are specific to the automotive industry, they are broadly in line with the general direction that Millennials — now the largest generation in the labour force — are pushing the economy. Millennials want convenience and value, and they aren’t afraid to look outside the established retail channels to find it. While this means disruption for the auto industry, it could also mean better quality products and service for everyone else.