J.D. Power Reports: Low Consumer Interest in New Retail Concepts
24 June 1999
New Research on Market Segmentation Emphasizes Importance Of Personalized Selling
AGOURA HILLS, Calif. -- Consumers report that one-price policies and
comfortable, home-like environments are the most appealing changes they would
like to see at automobile dealerships, according to the inaugural J.D. Power
and Associates Vehicle Shopping Process Study(SM) released today. However,
the retail programs analyzed in the study have relatively low impact on
attracting consumer visits to dealerships, indicating that these programs may
not be very effective.
"There are regional differences in vehicle-shopper composition, which has
implications on retail development programs," said Loretta Seymour, director
of the study at J.D. Power and Associates. "Manufacturers must recognize that
what works in Illinois may not be as effective in California, for example."
According to the study, there are four types of vehicle shoppers that
manufacturers and dealerships should understand when implementing their sales
and marketing strategies. These vehicle-shopper types include "Armed
Unfriendlies" (33 percent), "Relationship Seekers" (25 percent), "Low-Involved
Pragmatists" (24 percent) and "Highly-Involved Deal Seekers" (18 percent).
Armed Unfriendlies are a relatively antagonistic group of shoppers. They
describe themselves as precise and systematic, and they are equipped with
information in order to prepare for negotiating with sales personnel. This
group represents the youngest and most educated of the four groups.
Relationship Seekers consider themselves to be outgoing and loyal to
brands and dealerships. They enjoy shopping and negotiating for a new
vehicle.
Low-Involved Pragmatists consider themselves to be private and reserved.
Approximately 45 percent of this convenience-minded group are female. This
group believes that shopping around for the perfect vehicle is not the best
use of their time and have indifference toward the kind of car they drive.
The smallest group of new-vehicle shoppers are the Highly Involved Deal
Seekers. Consumers in this group are 73 percent male, younger than the
average new-vehicle shopper and like to shop many dealerships. They tend to
gather a significant amount of information before shopping. Highly Involved
Deal Seekers consider themselves to be strong-willed, direct and competitive.
They enjoy shopping for a new vehicle and are generally friendly toward
dealerships and salespeople.
The study also shows that despite the explosion of growth in consumers
using the Internet during the new-vehicle shopping process, the most
influential information source overall for new-vehicle shoppers is still
dealership personnel. Other information sources, in order of importance,
include consumer guides, friends and relatives, the Internet, product
brochures, magazine articles, and newspaper, radio and TV advertisements.
However, each consumer segment places different importance on information
sources. For example, Armed Unfriendlies are most influenced by the Internet,
whereas Low-Involved Pragmatists are least influenced by this online
information resource.
From a regional perspective, the study shows that Armed Unfriendlies
comprise the majority of new-vehicle shoppers in the Western region of the
United States, as well as a significant share in the South and the Northeast.
Nearly 40 percent of the California and Texas markets are comprised of Armed
Unfriendlies, but they represent closer to 25 percent in Ohio and Missouri.
The North Central region is dominated by Relationship Seekers and Low-Involved
Pragmatists, while Highly-Involved Deal Seekers are most prevalent in the
West.
"These new findings should help automotive retailers understand their
customers better," Seymour said. "Our findings should make it easier for them
to improve their selling methods."
The study, based on a national random sample of 8,300 new-vehicle
shoppers, is designed to help vehicle manufacturers and retailers align their
sales and marketing strategies with the demands of their customers. It is the
first J.D. Power and Associates report to present a comprehensive analysis of
how consumers shop for a vehicle.
J.D. Power and Associates
1999 Vehicle Shopping Process Study(SM)
Retail Programs Have Relatively Low Impact on
Attracting Consumers To Dealerships
Service/Amenities that Increase Likelihood of Visiting Dealership
(% Influenced)
None of these features influence dealership visits 37.2%
Comfortable, home-like environment 17.3%
One-price policy 14.8%
Quick-lube service 7.1%
Touch-screen computer for model information 3.6%
Internet access in showroom 3.3%
Source: J.D. Power and Associates 1999 Vehicle Shopping Process Study(SM)
