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SOFTWARE INDUSTRY NEWS |
Microsoft's view on marketing cars to the Millennial generation |
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Ahead of the expected addition of the millions of the Millennial generation – those born in the 1980s and early 1990s – to the American workforce in the next decade, Microsoft has commissioned a survey that reveals their potential as a tremendous new buying force, specially for the American auto industry. Last year, Microsoft had engaged KRC Research to conduct the “Millennials in Automotive Survey 2009.” That survey found Millennials to have heightened expectations as to how automakers should interact with them via high-tech channels, and also expect them to use newer, more innovative technologies in their eventual places of employment. Technology, Microsoft had said, could be key to engaging the estimated 80 million strong “millennial generation” — those born between 1981 and 2000 — as automotive consumers. Now, in a more recent follow up survey conducted by Wakefield Research for Microsoft, the software giant has explored the car-buying habits of this powerful generation. It has found that auto makers and car dealers need to use technology wisely to truly capitalize in a very real opportunity to entice this generation into their dealerships. For now, they have some work to do before they can meet the needs of these Millennial buyers. Cars have evolved a little, but dealership and sales processes have not  The study shows that two-thirds (67 percent) of Millennials believe buying a car is one of the most intimidating purchases a person can make. Approximately 85 percent of respondents disliked at least one part of the car purchase procedure. The problem, it appears, is partly in the process of visiting the dealership. According to David Graff, director of US Automotive and Industrial Equipment Industry Solutions at Microsoft, selling car hasn't evolved at all since Ford's Model T days. “You walk into a dealership and see a line of desks. Then someone jumps up from one of the desks and tries to sell you something,” he says. Microsoft's view is that this process is no longer relevant, since contemporary car buyers have “too much information and are too technologically savvy to believe a car salesperson is their only means for making a purchase.” Specially with the Millennials, a generation that has grown up with the Internet, new media such as Facebook and a whole new way of communication – from email to texting – is core to their very being. “These are people who are as comfortable interacting with devices as they are with people,” says Graff. “This means the old sales model for cars may not work anymore.” How Millennials research car buying  The Wakefield research shows how car-buying habits have changed over time. On average, Millennials conduct 16 hours of research before making a car-buying decision, typically using an automotive company’s website (58 percent), auto sites such as MSN Auto (53 percent) and automotive blogs (28 percent). In the eyes of many Millennials, the dealer is irrelevant, with 70 percent believing that the dealers actually make the process of buying a car harder, not easier. “They aren’t going to a dealer to find out about a car,” says Graff. “In 16 hours they become as educated about a car as 95 percent of the salespeople in dealerships.” IT and software can aid dealerships in marketing to the Millennials  Queer as it may seem to car marketers, you need to be able to reach their devices, in order to reach them. To take advantage of car buyers’ savvy, Graff says, auto makers and dealers should consider IT capabilities that Millennials like and embrace. Millennials are looking for a dealership that can offer technological resources such as Web-enabled computers on the showroom floor (64 percent) and self-service touch screens (60 percent) that could allow them to custom “build” their desired vehicles and lead them through the buying process. Auto makers and dealers could also look at installing devices that interact with customers’ smart phones such as tools that allow customers to quickly download information about a specific car’s features. Present day customers also want more transparency in the buying process, Graff says. According to the survey data, 84 percent of Millennials think Internet access during a transaction would make the process more fair and transparent. So, instead of having salespeople sit behind PC monitors with screens the buyers can’t see, dealers could offer automated financing systems either using in-house PCs or through IT systems that connect to customers’ own laptops. “That way people could conduct the transaction without being bothered,” Graff says. As much as the Millennials dislike the in-store buying experience, they are willing to rethink the relationship, and clear market opportunities are available for dealers that respond to their technology preferences. In fact, more than two in three (67 percent) Millennials agree that it is important to establish a real relationship with their dealers when buying cars. And, according to the study, more than eight in 10 (81 percent) Millennials would make an additional visit to the dealer within the first year in exchange for software updates for their cars. Car buying is still a big money decision  Car dealers and manufacturers need to appreciate that purchasing a new vehicle remains one of the biggest financial decisions people make, says Microsoft's Graff. Currently, wit average new car costing around $28,000, according to the National Automobile Dealers Association, “there’s a lot of anxiety associated with buying a car,” says Graff. The survey revealed 56 percent of the people interviewed likened buying a car to going to a dentist. “If I’m a car dealer, I need to be thinking of ways to make the process much more enjoyable,” says Graff.
Technologies for the “vintage” dealer |
Microsoft's study shows that even the cars need to get more technologically savvy for the Millennials. Over a quarter (27 percent) of respondents to the survey said that the technology they would most associate with cars today is a 1980s desktop computer or a typewriter, - indicating plenty of room for improved in-car technology in automakers’ future lines. Millennials don’t just want it all when it comes to their new wheels — they want it to come standard, the survey says. The top two features seen as a necessity are a GPS (67 percent) and a port for music players (54 percent). Forty four percent asked for a software feature that could track their fuel consumption, far more than those who indicated that popular items like Bluetooth (36 percent), satellite radio (32 percent) or an in-car hard drive (21 percent) were a necessity.LISTS AND RESEARCH
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