Why consumers are always ‘passively shopping’ for next vehicle

SAN FRANCISCO - 

Automotive marketing and advertising company Jumpstart Automotive Group released its latest shopper study on Monday, drilling deeper down into the behavior patterns of women and millennials as well as Asian and Hispanic shoppers.

While each of those demographics showed some unique characteristics, Libby Murad-Patel pinpointed what might be most important to dealerships on how to handle any customer who walks into the showroom or skims the store website with their computer or mobile device.

Murad-Patel, vice president of strategic insights and analytics for Jumpstart, explained that what’s generating so much shopper change is what she called the “accessibility of information.” She elaborated with Auto Remarketing after Jumpstart shared the study, which was completed in collaboration with Ipsos Connect and titled “Today’s Auto Shoppers: How They Research and Why Trust is So Essential in Winning Them Over.”

“Whether it’s literally doing a comparison of vehicles on your phone while you’re at the dealership or using social media to get recommendations and reviews, I think these are the big things that are changing the process,” Murad-Patel said. “Word of mouth has always been important. But the format that it’s in now has changed.

“Part of social media and its influence, they’ve made the consideration window an ongoing thing,” she continued. “We talk in this study about how people are always passively shopping. They’re always collecting information. That’s a little bit of a change. People who are in market are already coming in with a pretty good idea about the vehicles that are top of mind or a few brands that are top of mind. That’s because they’re constantly gathering. We’ve always seen other cars on the road.

“Now that we’re also seeing them in social media, we talk to a lot more people, either verbally or through a computer screen or mobile device, and we’re sharing a lot more information. Ultimately that’s building that constant consideration set. That’s helping to make that shopping window to be a little bit shorter because we’re already coming into market with what we’re considering.”

Libby Murad-Patel, Jumpstart

Jumpstart found that consumers are constantly cycling in and out of market depending on their changing life situations and preferences. Shoppers, especially millennials, no longer spend four months in the vehicle-purchasing process, which Murad-Patel pegged as short as 30 days — a timeframe that likely would delight any dealership.

To be exact, the study indicated 74 percent of millennials now take four weeks or less when shopping for a vehicle, and 88 percent research online throughout the entire process.

“That was pretty critical in terms of that segment. That research window was much shorter than we anticipated,” Murad-Patel said.

Jumpstart indicated that women continue to be an important audience for automakers and dealers, particularly since they influence 80 percent of all transactions. The study mentioned that women rely heavily on independent research and reviews and are more likely to consult Consumer Reports than any other group. Women place a greater value on practical needs such as passenger seating, comfort and safety, while remaining budget conscious. Although they are primarily new-model buyers, they show more willingness than men to consider used if it means they’re going to get more for their money.

“If they were able to get more of the bells and whistles on top of their needs at a better price point with perhaps a warranty, then used was still a consideration,” Murad-Patel said.

Jumpstart determined Asian and Hispanic shoppers place a greater emphasis on brands or vehicles that are more popular or recognizable, as well as vehicles with alternative fuel options. The study showed overall purchase price is important to Asian shoppers, but they show more willingness to increase their monthly payment if they feel the value is there. Hispanic shoppers rank purchase price higher than monthly payment, but monthly payment is a higher consideration for them than any other group. 

The firm highlighted that Asian consumers have a higher affinity for luxury vehicles due to a “you get what you pay for” mentality and cultural influences that place a big emphasis on quality. Hispanic shoppers tend to purchase more new vehicles than used, and they often hold onto a vehicle and pass it down to a family member instead of trading it in, making trade-in offers less relevant to this group.

No matter the age, gender or ethnicity, Murad-Patel shared with Auto Remarketing about what Jumpstart expected and what the study showed.

“Anticipations going into (the study) were largely that a little more broadly we would find a lot more bigger differences in how people shop,” she said. “In reality, their methods are all very similar. The differences were really found in either the technology they used or relied heavily upon during the time period in which they shopped.”

Quality & reliability now more important than fuel economy

Throughout the research, Jumpstart indicated quality and reliability were of higher importance than fuel economy. Analysts contend this trend might stem from a recall-heavy environment today combined with low gas prices over the last few years.

When consumers begin their research, Jumpstart found that their top three must-haves in a brand or vehicle are: good value (77 percent), a reputation for being strong and reliable (68 percent) and a reputation for excellent quality (65 percent).

But ultimately when it comes time to buy, quality and reliability (34 percent), gas mileage (29 percent) and price point (28 percent) are the top three key influencers for all shoppers.

“The results of this study illustrate that people are similar in the way that they gather information. But there are both subtle and significant differences between demographics,” Murad-Patel said.

 “Our hope is that brands across the entire automotive spectrum use these insights to help elevate the shopping experience for all consumers.”

About the study

The research was conducted by Ipsos Connect from December through March. Through qualitative research (online diaries, focus groups, and one-on-one interviews in Houston and Sacramento, Calif.), then quantifying — with measurable data — those findings through a series of national online surveys, Jumpstart stressed that this study provides a look at general trends and addresses some of the fundamental differences among these key demographics. 

For the survey, 1,014 U.S. respondents were interviewed online, all of whom met the following three criteria:

—Adults ages 18 to 64

—At least $30,000 in annual household income

—Purchased a vehicle in the past year or intended to purchase a vehicle in the next six months.

Jumpstart explained the precision of online polls is measured using a credibility interval. In this case, the survey has a credibility interval of plus or minus 3.5 percentage points.

According to Stephen Kraus, chief insights officer for Ipsos Connect and director of the study, “This study paints a vivid portrait of today’s auto shopper: informed, empowered, value-oriented and brand-focused. The research also underscores the crucial importance of the Internet, as 80 percent research online throughout the purchase process, not just as the purchase becomes imminent.”

To download the complete study, go to this website.

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