The Customer Is In Control Everywhere
Today’s empowered consumers are making the new rules — even in places they’ve never been able to.
There’s no doubt that buyers are fully in charge of today’s click-it-and-get-it economy. Now they’ve even started getting the upper hand in one of the most seller-friendly markets on Earth: New York City real estate.
According to Bloomberg, hopeful owners of some the world’s priciest sky-condos were likely to arrive at the scene last summer — usually a peak time for New York real estate sales — completely willing to walk away if the deal wasn’t anything less than perfect.
It’s a modern consumer attitude that’s been enabled by Amazon and other digital retailers that puts the customer in the driver’s seat and well-insulated from the traditional sales process. That dynamic is now spilling into bricks-and-mortar industries like real estate and cars, and the takeaway for both is the same: Give the customer what they want when they want it, or someone else will.
“There was a time for many years that if buyers had the money and they were asked to pay 10 percent above comparables, they said, ‘You know what? It will be worth that next year or in two years, why not?’” said Hall Willkie, the co-president of a Manhattan-based brokerage firm.
“That mentality is gone,” he says. “Buyers are very resistant to paying anything that isn’t justified.”
This new balance of power forced Manhattan realtors to lower prices across the area in the middle of 2018, marking the end of an era of easy price gains. Seemingly overnight, realtors woke up to a world where markups just don’t work the way they used to — and a big part of that is because customers know exactly what they’re getting into.
So how might car dealerships take cues from the warning shots being heard in other industries? That’s the million-dollar question OEMs and dealer networks are both working to solve as Gen Z comes of age and brings their digital-only sensibilities with them.
Customers Are Driving The Bargain
The old way of selling cars required a lot of persuasion, footwork and paperwork. In that world, the seller generally held the power in the relationship — at least as far as the flow of information is concerned. Buyers had to discern the details relayed to them by sales teams, and make a purchasing decision based off what they heard.
That just isn’t the world we live in anymore.
“[W]ith car sales, you can’t always go to multiple websites and price check,” Niko Karvunidis, General Manager at Santa Monica Audi, told Fair. “They’ll go to Overstock and Amazon and Wayfair and compare prices, and then whoever’s got the best price they’re going to buy from them. They are very confused by the whole automotive purchasing process: ‘It’s not like Amazon? Oh, you mean I have to talk to somebody?’”
Whether Cars or Condos, Change Is The Future
It is also no longer the case that paid third-party lead generators can supply dealers with foot traffic the way they once did. Digital natives and smartphone users have evolved, driving down the value of digital leads and upping the importance of simply giving customers a way to get the car they want the same way they get their clothes, music and other services: on their phone and at their own pace.
“The retail industry continues to evolve based on consumer preferences and shopping patterns,” Ana Serafin Smith, from the National Retail Federation, told online news portal Mic. “Retailers are resizing and modifying their businesses.”
This new reality is compounded by slumping car sales, which can give auto customers the same upper hand that buyers found themselves playing in last summer’s real estate market in New York City.
“It’s about perception — that the market went way up, and it went way up real fast, and it’s not happening anymore, and I am not going to be the fool who gets burned by overpaying,” Steven James, Douglas Elliman’s CEO for NYC, told Bloomberg.
