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Millennials, Cereal, and The Billion Dollar Implications on the Auto Industry

Nearly 40 percent of millennials don’t eat cereal because it’s too much work to clean up.

That was the claim of the article that caught my eye earlier this week. The article was based on a study done by The New York Times.

Stunned, I asked the token millennial on our team if he eats cereal. Nope. Our lead engineer chimed in and noted he doesn’t either. I guess that makes me the old soul of the team, because I still love waking up with some Cheerios.

While it’s easy to point and laugh at these silly, lazy, millennials, what was more interesting to me was the resulting changes in consumer shopping habits. In the last 15 years, cereal sales have dropped by nearly 30 percent, resulting in billions of dollars of losses for the industry.

It’s not just cereal.

Take a look at coffee sales over the last 15 years. Everyone knows whole bean coffee tastes better and costs less, but convenience trumps both price and quality here:


It seems no matter where you look, more and more consumers are adopting a convenience mindset. Shopping trends in nearly every industry show consumers opting for the more convenient option at increasing rates.

These consumer mindset shifts typically come from well financed upstarts who introduce convenience to the market, which in turn shifts consumer expectations.

Take another look at the chart above for ground coffee sales and you’ll notice ground coffee sales started increasing rapidly in 2004, the exact same year Keurig released K-Cup coffee homebrewers.

It wasn’t a consumer change, it was the new convenient option that caused consumers to expect and demand more convenience from their coffee.

Another example of this is the fast food industry. Over the last two years there’s been a major explosion in food technology (delivery) investment.


These startups make ordering food as easy as pressing a button on your phone. And they’ve raised billions to do it. This multi billion dollar push for convenience has ingrained new expectations in the minds of consumers.

“The delivery bug, after all, hasn’t been exclusive to the fast food world. People have become conditioned to expect Amazon to deliver practically anything to them.” – Washington Post

Due to new consumer expectations, a number of major fast food companies have been forced to add their own delivery service to stay relevant including Starbucks, Chipotle, McDonald’s, Taco Bell and Dunkin’ Donuts.

If you want to learn about the future of an industry, you just need to look at what the largest financial institutions in the world are investing in – this is where every dealership should be paying close attention.

The recent funding for Online Car Marketplaces is strikingly similar to the Food Tech chart above.


Billions of dollars are being poured into the auto industry to bring this same level of convenience to car buying. These new startups aren’t competing for inventory size or prestige, they are competing for convenience.

Take a look at these new companies and you’ll find phrases such as:

“You stay on your couch while we deliver and pickup the car for free.” – Vroom

“10 days to Fall in Love. Take your time and fall in love. If not, we’ll come pick it up, for a full refund.” – Beepi

“TEST DRIVES, DELIVERED. We’ll bring the car to you and be there to answer any questions.” -Shift

“Need financing? Pick a combination of down and monthly payments that work for you using our proprietary tools. Have a trade-in? We will give you a value in 2 minutes. Ready to buy? 20 minutes at your computer is all it take” – Carvana

Are customers asking for these perks?
Is it what they really want?

Debatable. More on that in my previous post.

What’s more important is the undeniable reality that billions of dollars are being  invested to influence the expectations of your future customers. This effect has been seen numerous times across different industries as demonstrated above.  If you follow the money, you’ll see the auto industry is next.

The largest players are already making moves in this direction. Autonation famously invested $100 million in their own online sales platform and Penske just announced they are rolling out online sales to all of their dealers by the end of this month.

But that leaves the question for every other dealership not belonging to a 100+ rooftop group. How do you plan to compete in an environment of increasingly demanding customers? Comment here, in the dealer forums.

Michia Rohrssen is the CEO and Founder of Prodigy, a San Francisco based startup that helps dealers sell more cars by turning their existing websites ...