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Is Generation Y changing the face of retail?

Those businesses that most effectively combine the on and offline worlds will be the ones that prosper with aftersales initiatives.

For many years the customer journey was a long and winding one. Baby Boomer consumers (born between 1946 and 1962) and Generation X (born 1963-1977) dedicated themselves to researching, testing and carefully evaluating their purchases, investing time to visit a variety of retailers. However, in recent times this journey has diversified, fragmenting into a number of avenues.

Online retailing is proving to be the path of least resistance for many consumers, with web-based sales already making up 13% of the total UK economy and set to make up more than 14% of total forecasted retail sales in 2015. Following a period of recession, retailers that quickly adapted to service a new breed of tech-savvy shoppers have seen their businesses flourish - with rapid growth expected to continue, while historic brands such as Woolworths and HMV have disappeared from UK highstreets.

The old adage that the consumer is king has never been more relevant - Generation Y, comprising those born during the 1980s and early 1990s, have come of age and is increasingly dictating how companies approach retailing. This generation is more inclined to use a PC, tablet or mobile to research products and make purchases and their growing buying power also makes them the next significant demographic of car buyers. With each generation comes a different expectation of service, which means that dealerships need flexibility in their approach to customer service.

A reduction in face-to-face customer contact makes a fully integrated DMS increasingly vital for automotive retailers looking to build lasting relationships beyond digital communications. Consumers expect a personalised customer journey at all points of contact so data harvested from online interactions is vital in bridging the gap from a corporate website to the dealership, while providing valuable data to OEM lead management about retail trends and potential revenue streams.

With the ongoing growth of online retail, dealers must embrace the digital revolution or lose the benefits of strong customer relationships previously forged in dealerships. A Generation Y car buyer is likely to have researched deals and packages before heading to a dealership, so websites should be an integral tool for supporting upselling and aftersales strategy. In the long term, email and social media communications utilising DMS data can give dealers even greater access to customers and the opportunity to boost retention.

However, a tangible dealership experience still remains an integral part of the automotive retail process. When making large financial investments consumers need the guarantees of service and reassurance that skilled sales people can offer. Those businesses that most effectively combine the on and offline worlds will be the ones that prosper with aftersales initiatives and are best prepared to meet the needs of consumers from any generation.

Author Neil Packham is Vice President and Managing Director, UK Region for CDK Global.



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