Are Millennials changing the car shopping process?

Even if they’re less likely than their parents to buy cars, millennials may be changing the car shopping process—driving it from an experience that starts online and ends on a dealer’s lot to one that looks quite different from the generations that came before them.

More than half of millennials used a smartphone to shop online, according to AutoNews, up from just 34% a year ago. This isn’t surprising since many millennials often treat their devices as extensions of themselves, much like baby boomers think about cars.

In news that may seem strange to previous generations who turned to TV commercials and newspaper ads during the car search, many millennials start the car shopping process with no idea what they want to buy. So how do they decide? Online research drives the decision for 95% of them.

Millennials spend more than 17.6 hours “shopping” for a car online vs. 15.5 hours for other buyers. That includes consulting research, reading reviews, and other online activities. That’s two hours longer than the average person shopping for a car, according to a recent study conducted by AutoTrader.com. And when they finally get to the dealer’s lot, they are far less likely to change their minds, often purchasing the make and model they came in to check out.

“Since the majority of millennials are decided on which vehicle they want to purchase by the time they get to the dealership, the opportunity for dealers and OEMs to influence their purchase decisions is online—where millennials spend the majority of their shopping time,” said Isabelle Helms, vice president of research and market intelligence at AutoTrader.com. “With that, it’s incredibly important for automotive advertisers to understand how millennials are shopping online and across mobile devices so they can effectively reach this generation of car buyers.”

Many major brands are using data to respond to the trend. Take the case of Toyota, which is using a “location based mobile ad tool to supercharge its annual clearance sale,” according to an August 28 article in AutoNews.

The tool uses latitude and longitude to target shoppers who intend to make a purchase, perhaps while they’re across the street from a dealership or running errands nearby. It delivers ads, such as available incentives like cash back promotions or information about financing, driving consumers to act immediately.

The future may be even broader.

“Stretch your imagination. What if the dealer could take a picture of a car sitting right there on the lot, populate the ad unit with it, and serve it to a customer that was shopping for that exact model–and happens to be right across the street? That is where advertisers can and should go with this technology,” Scott Swanson, president of global advertising sales for Opera Mediaworks, which is powering the Toyota campaign, told AutoNews.

The targeted ads, which ran from August 6 through Labor Day, drove a 44% boost in response from active shoppers compared with non-targeted ads.

So, what does it all mean?

“As dealers and OEMs look to capture the attention of millennials in 2014 and beyond, the importance of mobile cannot be emphasized enough,” said AutoTrader.com’s Helms. “Automotive advertisers who don’t start putting mobile first could be at risk of coming in last.”

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