Dealership Outlook: Consumer Shopping Trends for 2025
Dealership Outlook: Consumer Shopping Trends for 2025
In a blink, we’re about to abandon 2024 for the blue skies of 2025. The automotive industry is evolving rapidly and, as we approach 2025, it might not be so blue if your dealership isn’t prepared to navigate some of the most disruptive trends in consumer shopping. It’s not just the slow-moving US economy or the oversupply of EVs that’s impacting the shopping experience. Consumers, and how they shop for vehicles and service those vehicles, are undergoing a significant transformation. From digital-first experiences to eco-conscious purchasing decisions, the demands on dealerships are reshaping how they do business. Below, I explore the key trends consumers expect from dealerships in 2025.
- Budget-Conscious Spending: We can’t ignore the obvious economic pressures. With inflation and high interest rates impacting household budgets, American consumers are limited in their buying power while trying prioritize value. Consumers crave pricing transparency. Around 55% of consumers are focused on tools that help them track spending, and many are turning to store brands, coupons, and discounts to save money. Discretionary spending categories, such as apparel and dining out, are seeing reduced demand due to financial caution. While there’s little room to move on new vehicle pricing, it’s used car sales and the fixed ops department that will have to create incentives to bring in consumer traffic.
- Used Cars Continue to Boom: It’s almost like the pandemic pricing has come back for another dose, this time due to pricing versus supply chain issues. Consumers are looking for value and quality, placing dealerships in a better position than independent dealerships. Addition value, trust and confidence comes from the dealership reconditioning vehicles of the same brand. The margins on used cars can also present a better financial flip than a new car and also represent a more-recent connection with the owner to service an older vehicle that may also be out of warranty – a win for the fixed ops team.
- Eroding Brand Loyalty: Data shows that the pandemic dealt a crushing blow to brand loyalty. Three-quarters of consumers tried new shopping behaviors during the pandemic and nearly 40% of consumers left brands they said they trusted for new brands. Many individuals have shifted their thinking and preferences in recent years, especially as dealers have struggled with parts availability and technician shortages. Retail aftermarket vehicle servicing has won over more of the business. Consumers who were accustomed to buying tires and oil changes beyond the dealership have created opportunities for these outlets, who are now adding other services like brake jobs, transmission work, wheel alignments and other light work. Any vehicle repair or service not available from the dealership for a competitive price will invite customers to shop elsewhere. Dealers will also turn to “loyalty programs” to drive repeat servicing and protect their customer base.
- The Local Business Migration: After watching Tesla build a loyal base of consumers, franchise dealerships have grown fearful that shoppers will buy from the OEM directly. Direct-to-consumer sales see continued growth and will continue to climb over the next 5 years. However, consumers expect that, in exchange for a shopping experience that is less personal and less connected locally, there will be significant savings. Will that be the case when you buy from the OEM directly? That scenario will play out with some brands, as sales volume falls and franchises find conditions untenable. For most big brands that have not struggled with volume, local delivery wins out.
- Demand for Personalization and Privacy: While 64% of consumers want personalized shopping experiences, over half (53%) express concerns about data privacy. This creates a delicate balance for brands: they must leverage data responsibly to build trust while offering tailored experiences. Today’s modern dealer is leveraging tools and data that further a more personalized experience, but should also be careful not to overstep into areas where the consumer feels their privacy may be invaded. According to consultant firm McKinsey, 87% of North Americans said they would not do business with a company if they had concerns about its data practices.
- Ethical Shopping: Conscious consumerism is on the rise. Consumers are increasingly evaluating the social good and ethics of brands, favoring transparency in sourcing and production. Millennials, in particular, are driving this shift, with 47% preferring brands that align with social and environmental causes. This matches up well with EV sales, but don’t miss out on older consumers who have their own values. Lean in on vehicles safety, supporting the local community, contributions to local non-profits and any causes that a consumer’s business profits more than just the dealership.
- Selling EVs: For the moment, the average consumer is not interested in EVs. However, much of that discomfort comes from the lack of knowledge or misinformation. Dealerships not only need to walk shoppers through differences between ICE and EV vehicles, but also share hybrid vehicles, at-home charging solutions, EV servicing, energy costs and other apps/technologies created for todays EV owners. A vehicle is a substantial investment for the consumer – remove the doubt and unknowns so that consumers can make better informed decisions about the investment. This isn’t about “selling” a car, but rather about “informing” potential buyers. The gap in knowledge is still too great for the average American. Product knowledge will be key for dealership sales staff.
- Used Cars = Sustainable Goods: 85% of global consumers have shifted their purchase behavior toward being more sustainable in the past five years. That’s according to a survey conducted by Simon-Kucher & Partners. This trend isn’t just about EVs, but also applies to pre-owned vehicles. More and more consumers are becoming aware of the environmental impact of vehicle recycling, opting for a chance to revive a fuel-efficient vehicle. Two-thirds of consumers are reportedly willing to pay more for sustainable products. This is especially true for younger generations: 25% of Gen Z and 22% of Millennials will pay up to 20% extra. Dealers will invest more in reconditioning efforts to attract premium buyers who seek a pre-owned car for altruistic reasons, not just price.
- Buying Habits Based on Reviews: A 2020 study by Trustpilot found that 89% of consumers worldwide read reviews before purchasing a product. And over half of consumers read at least 6 reviews before purchasing a product. There’s good new for those dealerships that enjoy great reviews. Power Reviews found that people who interact with online reviews were converting at a 25% higher rate. Podium also found that 38% of users require at least a 4-star rating to even engage with a business. For dealerships that don’t enjoy glowing testimonials, there will be an added incentive to capture testimonials and foster a better customer experience.
- Technology Integration: Technologies like AI and augmented reality (AR) are transforming shopping experiences. According to recent studies, over 80% of buyers research vehicles online before making a purchase decision, and this number is expected to grow. AI is being used for personalized recommendations and predictive analytics, while AR boosts confidence in online purchases, reducing return rates and driving sales growth by approximately 30%. Some AI is amazingly efficient, while other AI solutions leave your dealership looking lazy and disinterested in the needs of the consumer. If your store isn’t there just yet with these next generation technologies, take advantage of what is available. Pictures and videos are just as valuable for consumers who are looking for information about their vehicle purchase or servicing. A recall notice isn’t enough. Are you sharing with the vehicle owner the nature of the recall, the risk it presents, parts availability, the amenities associated at the dealership to offset the inconvenience and other information that encourages vehicle owners to comply with the recall notice?
- Social Commerce and Influencer Impact: Social media continues to influence purchasing decisions, especially among younger generations. Nearly 43% of Gen Z and Millennials have made purchases through in-app shops in the past three months, often guided by influencer recommendations. What do your social media properties (Facebook, TikTok, Instagram, Google Reviews, etc.) reflect of your dealership brand? Are you simply just loading post feeds with vehicle imagery or are you leveraging customer testimonials, staff profiles, your presence in the community and other “shareable” content that broaden your brand’s reach and appeal?
- Flexibility in Payments: Buy Now, Pay Later (BNPL) options are becoming essential for many retailers, providing customers the financial flexibility to make purchases. Additionally, there is increasing demand for faster, more reliable delivery services as ecommerce continues to dominate. Make sure your financial partners are meeting the broadest segment of your shopping base. If you’re lucky enough to attract consumers into your showroom or service drive, you need to present the financing tools for them to execute the transaction. In 2021, BNPL accounted for just 9% of ecommerce transactions, but by 2026, that will rise to 25%. Want to sell more new vehicles? More than 40% of BNPL consumers were Millennials in 2020 and this generation is expected to continue to account for the largest share of users through 2025.
These trends underscore the need for businesses to adapt by fostering trust, embracing sustainability, leveraging technology thoughtfully, and maintaining a customer-centric approach. Despite the shift toward digital, physical dealerships aren’t going away—but they need to evolve. Consumers want dealership visits to be quick, efficient, and engaging. Trust remains a cornerstone of automotive shopping. Buyers want dealerships that are transparent, honest, and focused on building long-term relationships rather than one-time sales. All this comes together in a very pivotal 2025 for most stores.
About the Author
Sean Reyes Chief Marketing Officer |
Sean Reyes oversees all marketing efforts at Recall Masters as Chief Marketing Officer. Sean also serves as the host of the FixedOps UX, a “minicast” that revolves around the fixed operations ecosystem and the tactics that build a better user experience for customers, dealership staff and other stakeholders. Sean’s experience spans more than 35 years of business development and strategic marketing experience, having developed go-to-market products and solutions for the automotive, healthcare, insurance, finance and technology industries to serve Fortune 1000 clients like American Express, Toshiba, Western Digital, Cox Communications, Novartis, Microsoft, IBM, Compaq, HP, National General Insurance, MyCustomer Data, DigniFi and several automotive affiliates and dealerships. Sean lives in Napa, CA with his wife Kathryn and spends his free time hiking, kayaking, playing guitar, going to concerts, rebuilding project cars and helping his kids embark on adulthood. |