How Gen Z is shaping the future of car buying: the rise of the omni-channel experience
GlobalData
8 min read
Born into a fully digital world, Generation Z is emerging as a key demographic in the automotive market. While their car-buying journey starts online with configurators, virtual test drives and influencer content, in-person dealership visits remain a crucial step in the purchasing process. This shift is driving investment in omni-channel strategies says NETSOL's Eva Kellershof.
As the first digital-native generation, Gen Z is rapidly becoming one of the most influential groups in the auto-buying landscape. Born between 1997 and 2012, this cohort has grown up with technology at their fingertips, shaping their expectations and preferences when making major purchases – cars included. While Gen Z is highly tech-savvy and values convenience, they also seek authenticity and personal connections in their purchasing experiences. This dynamic has led to the rise of the auto industry's omni-channel experience, blending in-person and online elements to create a seamless and engaging journey from research to purchase.
Eva Kellershof. Picture Credit: NETSOL
A digital revolution in auto buying
Gen Z’s influence on the automotive industry is rooted in their familiarity with the digital world. Gen Z car buyers tend to start their research online, using a variety of platforms such as websites, social media and online car marketplaces to gather information before making a decision. They are accustomed to interacting with brands through digital channels and this behavior extends to their car-buying process. Online tools like car configurators, video reviews and virtual test drives are essential for satisfying their need for digital engagement.
However, Gen Z's desire to blend digital convenience with a tangible, real-world experience sets it apart from previous generations. While they may begin their car-buying journey online, they value in-person interactions, especially when finalising the purchase. For instance, data from a cross-generational survey of over 4,000 users of the Cars.com online auto shopping platform found that despite being the generation most immersed in online culture, Gen Z still prefer to buy cars in-person at dealerships, much like older generations, after conducting thorough research online. They therefore have a preference towards a click-and-mortar experience – starting the process online and “kicking the tyres” in-person at the dealership before completing the transaction online. This preference underscores the importance of physical touchpoints in their predominantly digital research process.
According to Statista's Consumer Insights survey conducted in the United States from July 2023 to June 2024, 54% of Gen Z respondents stated that owning a car is important to them. Further, research from Auto Trader shows that Gen Z car buyers are investing considerably more in their first cars compared to earlier generations. They prioritise technology and connectivity over looks, with a growing interest in EVs.
Why omni-channel is key for Gen Z
For Gen Z, the ideal auto-buying experience isn’t confined to one channel or the other; it’s about seamlessly integrating both online and offline elements. They want the convenience of researching and comparing vehicles from the comfort of their homes. Still, they also seek trust and certainty from seeing and touching the car in-person. This preference for omni-channel experiences is why auto dealers and manufacturers invest heavily in digital transformation initiatives to create smoother transitions between online and offline touchpoints.
But when it comes to sealing the deal, they still want to walk into a dealership to finalise the paperwork, ask questions and test the car in-person. This behaviour highlights the importance of creating a cohesive experience that seamlessly integrates digital tools with the in-person aspects of car buying.
Social media and virtual showrooms
Social media is critical in shaping Gen Z’s purchasing decisions, particularly regarding brand loyalty and product discovery. Platforms like Instagram, YouTube and TikTok are essential for automotive brands looking to connect with this younger audience. Gen Z doesn’t just want to see traditional ads – they want engaging, authentic content that showcases a brand's lifestyle and values. Many auto manufacturers capitalise on this by collaborating with influencers or creating viral content to engage potential buyers.
In addition to social media, the rise of virtual showrooms and augmented reality (AR) is also reshaping the car-buying experience for Gen Z. Brands like Audi and BMW are already using AR technology to allow customers to explore cars virtually, customise models and visualise features in 3D. By incorporating these technologies into both the online and in-person parts of the experience, car manufacturers are creating a more interactive, immersive and personalised journey for Gen Z buyers.
Bridging the gap: how dealerships are adapting
Adapting to Gen Z's preferences for auto dealerships means embracing a hybrid model that blends physical and digital elements. Dealerships increasingly offer click-and-collect options, where customers can reserve a car online and pick it up in-person, sometimes with the option to complete paperwork digitally.
Additionally, dealerships are enhancing the in-person experience with more tech-savvy features, such as virtual reality setups for test-driving cars, interactive touchscreens, digital kiosks for browsing available models and a journey that is not different from the online look and feel. This hybrid approach caters to Gen Z's desire for convenience while providing face-to-face interactions that still matter to them.
The future: a seamless blend of digital and physical
Looking ahead, it’s clear that Gen Z will continue to shape the future of auto buying through their demand for an omni-channel approach. As this generation matures into full-fledged car buyers, their preferences for a seamless blend of online research, digital tools and physical experiences will drive the evolution of the automotive sales model. Auto manufacturers and dealerships that embrace this hybrid approach, where customers can smoothly jump ahead and also back in the process for a non-linear journey, will be best positioned to capture the attention and loyalty of Gen Z consumers.
To make the online and in-person experience seamless for Gen Z, dealers can implement several strategies that cater to their digital preferences. Online chatbots with personalised product recommendations create an engaging start to the buying process, while video chat with dealers brings a more personal touch. Real-time online negotiations, including price adjustments and seamless transitions into online financing and e-contracting, ensure a smooth, uninterrupted flow.
When customers come into the store, their online journey should continue without disruption – keeping the same digital environment, eliminating duplicate entries and maintaining the transparency they experienced online. In-store, adopting side-by-side advising creates a more collaborative atmosphere, moving away from traditional, confrontational desk setups, ensuring Gen Z feels comfortable and empowered throughout the entire process. Dealers, in turn, are going to welcome this new ecosystem with open arms, because they themselves are going to experience higher efficiency and less manual work as a result of a reduced number of screens they have to use on their end.
According to research from Salesforce, Gen Z is at the forefront of a transformative shift in how consumers approach car buying and maintenance, increasingly embracing AI-powered assistance. Data reveals that 79% of Gen Zers are eager for AI agents to find and recommend the best vehicle tailored to their needs. Additionally, 68% want these digital assistants to identify optimal financing options – a preference that notably surpasses the 53% of baby boomers who feel the same.
When it comes to timing purchases strategically, 74% of Gen Z respondents want AI to pinpoint the best time to buy a car based on price trends and sales, again outpacing the 53% of boomers interested in such insights. This generational divide highlights a growing reliance on AI among younger consumers seeking smarter, more efficient automotive experiences.
For auto companies to thrive, they must invest in both their online platforms and in-person customer experiences, ensuring that the transition between the two is as smooth and frictionless as possible. By doing so, they can meet the expectations of Gen Z buyers and set themselves up for success in the future of car sales.
FAQs
Why is Gen Z influencing changes in the car-buying process?
Generation Z, born between 1997 and 2012, is the first generation to grow up with constant digital connectivity. Their expectations for convenience, personalisation and seamless online interactions are prompting auto manufacturers and dealerships to adopt omni-channel models. These combine online research tools and digital engagement with physical dealership visits, reflecting Gen Z’s preference for hybrid purchasing experiences.
What technologies are dealerships using to meet Gen Z’s expectations?
Dealerships are incorporating a range of digital tools to appeal to Gen Z buyers, including virtual and augmented reality showrooms, online car configurators, digital kiosks, video consultations, and AI-powered chatbots. Many are also offering online financing, click-and-collect services, and paperless contracting to streamline the customer journey and maintain continuity between digital and physical touchpoints.
How does Gen Z’s approach to car ownership differ from previous generations?
Gen Z places greater emphasis on connectivity, technology and sustainability than previous generations. They are more likely to research cars extensively online, prioritise electric vehicles (EVs), and show interest in AI-assisted recommendations for vehicle selection, financing and purchase timing. While they value digital tools, they still prefer finalising major transactions like car purchases in person, reflecting a blended approach to ownership and decision-making.
"How Gen Z is shaping the future of car buying: the rise of the omni-channel experience" was originally created and published by Motor Finance Online, a GlobalData owned brand.
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