The power of the Internet coupled with how to sell to Millennials – now the largest generation in the US – has sent many in our industry into a tailspin. Since more people prefer to research and shop online, visits to an actual dealership are at an all-time low. Buyers today visit slightly more than one dealership before buying, down from 4 to 6 visits a few years ago. As a result, dealers are not seeing as many walk-ins, and it’s becoming difficult for manufacturers to control the buying process as they compete with information available on third-party websites and social media. At the same time, Millennials are proving to be a hard sell since they don’t trust traditional advertising. Yet this group has such enormous buying power – they bought 4 million cars and trucks last year and their share of the new car market jumped to 28 percent – no dealer can afford to ignore them. What’s an OEM to do? Think way outside the box with a Virtual Reality (VR) Lounge.

Lounge your way to leads and sales

This new sales concept is a lounge-like environment where customers can come in, enjoy a free beverage and snack, peruse literature about a specific vehicle, and then settle onto a couch with a VR headset and enjoy a fully immersive experience of a computer-generated vehicle.

It’s important to note this is not the 360-degree video championed by YouTube and some providers in our space where you get a feeling of being in a vehicle but you can’t interact with it. True VR allows consumers to navigate through their own journey, opening the sunroof, sliding groceries into the trunk, etc. The result is an entirely unique experience and viewpoint that naturally fits every age range and lifestyle.

The exhilarating lounge experience pushes consumers to make an appointment for an actual test drive with the dealer – getting them into the store and converting them to buyers. Most importantly, they talk (whether online or in-person) about the incredible experience with friends, who also show up at the lounge and become low-funnel shoppers.  

Go where the people are

The most exciting aspect of this concept is where you stage your lounge. Not in the dealership. We already know dealership visits are at an all-time low. That’s not where customers go to see new models and features. You put the lounge where the people are, specifically: malls, shopping districts, and restaurants. In these environments people are already relaxed and having a good time, so they are more receptive to trying a fun, new experience. In malls and shopping districts in particular, people are already “shopping” or “browsing” so they have disposable time and are already in that consumer mindset.

Manufacturers can also start small with pop-up stores in these different locations. This trend of opening short-term sales spaces has really taken off for a wide range of retailers. The beauty of VR is that the equipment and space requirements are minimal, but the engagement level is sky-high. You get a lot of bang-for-your-buck and an invaluable opportunity to engage, entertain, and convert, a wide range of shoppers.

Give Millennials what they want

Let’s circle back to those elusive millennial shoppers and explain how the VR lounge is tailor-made for them. We know marketing to this group is a challenge. They’ve seen it all and aren’t interested in being “sold” to. One thing is clear: they are very comfortable with technology and open to experiences with cool, new technology like VR. Just look at the astounding success of the augmented reality game Pokémon Go. While augmented reality essentially inserts virtual objects into a person’s real-world view, it’s not a stretch to assume a true VR experience would generate the same amount of buzz and excitement.

Millennials crave that exciting experience that’s leaps and bounds beyond traditional advertising. As Peter Naylor, senior Vice President of ad sales at Hulu, said recently in an Advertising Age article, any brand that is targeting an 18-to-34-year-old demographic should be thinking about VR; especially those brands that want to be known for innovation.

We’re in the midst of a dynamic and rapidly transforming market. Don’t let it put you in a tailspin. You can get more people into dealerships, snag those elusive Millennials, and increase sales, by thinking of new ways to use technology like VR that is exhilarating, convenient, and most of all, profitable.

Brian Wiklem is the Director of CG and Video Production at izmocars. He can be reached at Brian.Wiklem@izmocars.com.

Virtual Reality (VR) is going to be a game-changer in the automotive space. Those watching closely may have noticed an explosion of VR news coming from auto shows to manufacturer engineering plants to dealerships in 2016.

And while the technology is in its infancy, there are countless ways virtual reality is already being used to design, market and sell vehicles. Here are a few ways it is currently being used:

• The front runner, Ford Motor Company, has been experimenting with VR for the last several years now. They were one of the first to use Oculus Rift technology as a part of their Engineering process to create and evaluate their vehicles in a virtual setting. Ford Engineers put on the virtual head gear and can explore the nuts and bolts of their designs in a life-like setting before their vehicle plans hit the manufacturing plant.
• In January of this year, Audi rolled out their Virtual Reality Experience, or what executives are calling “the most flexible sales format ever invented in the car industry.” Shoppers use wearable technology to enter a VR showroom and virtually “build” their favorite Audi configuration. Once their dream Audi is built, the shopper can look at it inside and out to determine whether the vehicle is the right fit for their needs.
• Not to be outdone, Volvo created a virtual “test drive” with Google Cardboard where drivers were able to experience the new XC90 SUV before it even hit showrooms.

While the above bring the “wow” factor for future cars, others are using VR, or similar technology, to sell vehicles on lots today.

• Ferrari is using augmented reality to help consumers create the perfect vehicle for their needs. Its dealers, armed with virtual-powered tablets, help a buyer select a current Ferrari model and then use the application to swap everything from the vehicle color to wheels to interior options. The result is an endless variety of virtual configurations and colors allowing buyers to see what their custom-ordered car will look like before it’s built.
• And in what is perhaps the perfect VR experience, teen drivers at this year’s New York Auto Show saw just how dangerous it can be when a driver is distracted, thanks to Toyota Motor Company. Using Toyota’s “Distracted Driver Simulator” teens were invited to put on the virtual reality headset and stay focused on the road as low flying birds, loud fellow passengers, and other common distractions tried to take their focus from the road.  

While the above examples are in the early stages, and the majority of uses are housed within the confines of manufacturers, as an industry we should be seeing other uses of VR trickle down to dealerships in 2017.

 Imagine using VR to help your car shoppers build, configure, and even color the vehicle they want and view it prior to ever stepping foot in your showroom. Your transaction times would decrease and your customer satisfaction would soar. Providing CG-enhanced tools will help whittle down the time a buyer would spend at a dealership by arming them with the exact information they need after reviewing all options online.  The result? When that buyer walks into the dealership, it will be to test drive the exact vehicle they are looking for, and finalize the sale. 

While we haven’t begun to explore all of the ways virtual reality will help the automotive industry in the years to come, the technology and tools needed to put it to use are available today. And one thing about VR is becoming abundantly clear – it will have the ability to completely change the way we buy and sell cars.