Shift currently operates in Los Angeles, Orange County, San Diego, San Francisco, and San Jose. Arison is looking to expand to 8-10 markets by the end of 2018. At the same time, the company is working on becoming a one-stop shop for car buying and maintenance, and plans to break into oil and brake changes.
Meanwhile, Shift’s efforts are attracting a surprising generation: Millennials, whom recent data suggest have slowly warmed to owning cars, especially as the job market improves.
Nearly 80 percent of that age bracket now owns a car, while 75 percent who don’t are planning on buying one, according to a 2017 study by Accel + Qualtrics study.
“The conventional wisdom on this is wrong – millennials are buying cars, just later,” Arison said. “Owning a car is as American as apple pie. People want to be able to take their kids to the movies, drive to Yosemite, and have the general freedom a car affords.”
According to Shift’s data, Millennials represent half of all Shift buyers – more than double those of AutoNation, the largest car dealership in the country whose clientele is about 22 percent Millennial.
Shift is also capitalizing on the fact that millennials want experiences, rather than simple sales.
“They dislike ‘Big Box retail, they prefer for things to be done online and brought to them. This is why they love Shift,” Arison said.
Shift’s engineering team is comprised of former employees from tech giants like Google, Facebook, Dropbox, and Twitter, and they want to digitize the entire car buying process by utilizing strategies like machine learning.
At the moment, Shift is working on a product called “Zero Touch,” which will allow a customer to get a loan and buy a car online without interacting with a sales associate.
In the coming years Shift faces stiff competition the likes of Carmax, one of the largest players in the used car market, which has moved more than 1/3 of its inventory to Millennials.
“Carmax disrupted the industry over 20 years ago by offering a high integrity, transparent and stress-free way to buy a car that customers want and need,” said CEO and President Bill Nash to CNBC. He added the company was test-driving online sales of its own.
However Arison sees room in the used car market for multiple winners. Although Shift is still growing in a very competitive space, he feels confident about the company’s path forward.
“Shift is the future of car ownership,” Arison said.