Newly Released Research Reveals An Emergence of New Automotive Markets
It’s Time to Act Fast.
As a company that lives and breathes data, we turn to the numbers in times of uncertainty. When we need answers, we rely on data, not gut, to guide us for the smartest decisions. It allows us to gain full transparency into what’s working, and what's not, and in turn, act fast.
In a world that has completely shifted to an online buying process, acting fast has never been more relevant. This shift in consumer behavior has highlighted for dealers and OEMs the splintered state of their digital infrastructure and placed a spotlight on solutions that serve a new wave of online shoppers.
With digital sales in full motion, your dealership's website has become the most competitive space to win market share and shows that the battle for the sale, which used to take place in the showroom, is now taking place online. And we’re seeing this confirmed in the data.
New Market Segments are Emerging Post-COVID
Interestingly, shopping engagement has remained robust during the 2020 pandemic. Specifically, new buying behaviors from markets that wouldn’t be looking for a car pre COVID-19, are now interested.
Here’s what we’re seeing:
Single car suburban families may become two car suburban families
With safety and hygiene top of mind, families that only owned one car will now be in the market for a second car so they can enjoy family trips in their private vehicle.
Business commuters may return to driving for short-haul work trips
With surveys showing that the majority of vehicle owners will rely first on their private vehicles for transportation, we can speculate that short distance business trips that used to be by plane will now be replaced with private vehicles.
Millennials may buy a car earlier post-crisis
Millennials are speculated to play a big part in automotive recovery from COVID-19. Millennials that hadn’t prioritized buying a car with the convenience of Uber or Lyft, are now looking into purchasing or leasing a car in the next five years.
These millennials, for example, represent 25% of the total US population, encompassing all those from age 21-38, a total of 82 million consumers. Car ownership in this demographic has been surveyed at 75%, with a skew toward non-urban consumers. The average first-time car buyer from this demographic is 29 years old and male. With a decrease in comfort with public transportation and ridesharing, it’s possible to envision an increase in buying interest from this demographic. A 5% increase in ownership would equate to approximately 4 million more shoppers in the market.
Families may turn to road travel for vacations, rather than flights
In a response to the psychological effects of COVID, families may be more inclined to avoid public transportation and take comfort in either taking a second car or using a larger vehicle - prompting them to update their current vehicle.
According to a recent study by Cars, it's clear the industry is continuing in the stages of a rebound phase. Engaged shoppers in the final stages before making a purchase are up more than 5% week over week.
This is not just hoping for a speedy recovery for the automotive industry, but it suggests that dealers need to prepare to engage these emerging markets. What worked pre COVID-19 will probably not be sufficient in a post COVID-19 era.
How Will Your Dealership Recover?
For many dealers, dominating your state by getting found online can become a complex operation, especially with a fluctuating market based on a number of factors including government rules, news coverage, CDC guidelines, and more.
With customers engrossed in an exclusively online research process -- even more than before--, your dealership needs to dominate the digital space. It’s about staying personal, staying present, and keeping up with your shoppers’ ever-changing interests. It will be critical for dealerships to intelligently identify, target, and engage online shoppers.
Out-adapting and out winning your competitors in this new space will require the most sophisticated, superior dealer technology.
Best Practices for a Quick Recovery
With emerging markets growing rapidly, traditional technology just won’t make the cut. Making data driven decisions no longer just means guesstimating where your marketing dollars should go, but really trusting automation and machine learning to bring your dealership to life in ways that a human simply will not have the bandwidth to maintain.
Begin to utilize more with less
While your advertising budgets may be limited, using AI-driven technology will do the dirty work of targeting your new shoppers effectively and efficiently - saving you time and money.
Don’t let social distancing stop you
Use the shift in consumer behavior to your advantage. Start investing in technology that facilitates a complete, seamless digital experience that your shoppers will already be expecting.
With consumers becoming increasingly cautious and discriminating in how they choose to spend their time, make sure you act fast to engage these emerging markets.
Access the full report here.
Ilana Shabtay is the VP of Marketing at Fullpath, Automotive’s first customer data and experience platform (CDXP). She is an experienced marketer, highly skilled in digital marketing and artificial intelligence, and the host of the InsideAuto podcast. Having spent almost a decade in the automotive industry, Ilana continues to develop critical skills to drive marketing and serve the dealership community in a new era of technology.View full profile