By 2025, “Generation Y” – the so-called “Millennials” born between 1980 and 1998 – will account for 75% of the car-buying market. Yet they are becoming increasingly disillusioned with the idea of car ownership.
Financial concerns – from the cost of the car itself to ongoing costs such as fuel, insurance, and maintenance, as well as worries about job market instability and student debt burdens – play a big part in this. That young professionals tend to migrate to metropolitan areas with strong public transportation networks and thriving vehicle-sharing and taxi services such as ZipCar and Uber is another factor.
Meanwhile, car ownership is not the aspirational status symbol it once was. If you asked Millennials to name 20 prominent brands, car marques would be unlikely to feature prominently. This ambivalence towards car ownership is encapsulated in the declining number of young people with driving licences.
But for all this, a major factor in Generation Y’s reluctance to part with its cold, hard cash in exchange for a new or used car is the simple fact that the engrained process and experience of buying a car is positively archaic in comparison to the way in which they make other purchases.
Millennials have grown up with computers as a familiar and increasingly integral part of everyday life. Internet research and online shopping are second nature, as they flit between sites to do their homework before committing to a purchase. In fact, data from Google suggests that Millennials will visit an average of 25 different sites during the painstaking process of identifying the right car for them.
These are technologically savvy buyers, used to making purchases quickly and without hassle. Automotive retailers and marketers need to acknowledge their desire for a straightforward, transparent experience. Millennials want all the relevant information about a car – including model options, pricing, and financing – to be available online, in a clear, consistent, and easily-compared form, or at least to be delivered quickly and concisely by dealership staff.
The sales techniques traditionally employed by car dealerships, geared towards closing a face-to-face sale on the showroom floor, are inappropriate to Millennials’ approach to shopping. Too many are failing to adapt accordingly by, for instance, developing mobile applications, engaging with customers over social media, or conducting systematic email follow-up with customers when they leave the showroom.
Millenials also typically demonstrate lower levels of brand loyalty than older consumers. Given that most people buy a car only once every five to ten (or more) years, why would a dealer not do all they can to ensure a customer comes back to them next time? The performance and experience of the car itself will be a major factor, but the sales experience and service matter too.
This is not just about Millennials, though. The growth of multi-channel retail has made working out where any sale has come from – and, therefore, how to generate more sales – exponentially more complicated. Understanding customer behaviour across devices and platforms means looking at more than just the “last click” that led them to the point of purchase, and requires audience segmentation to be based on more sophisticated criteria than, for instance, age and gender.
Making the full wealth of customer information gathered both on- and offline – from basic profiles and locations to purchase histories, and device usage – available to sales and marketing staff at all times, will enable them to give better recommendations, close more sales, and engender stronger loyalty. Somebody who bought their last car aged 27 may have a very different set of priorities when they come to make their next purchase aged 34 – pushing them to upgrade their sports car would be a waste of everyone’s time when they want a mid-range wagon to meet the practicalities of life with young children. Or maybe not – the key is not to generalise, but to apply insights on an individual basis to make the sales and purchasing process better for everyone.
Attitudes towards car ownership are changing rapidly, and the disparity between the customer experience of buying a car the wider retail landscape is accelerating this change. Marketing departments need to keep pace. Equipping staff across all aspects of your business to collect and interpret customer insight and tailor marketing campaigns based on what, where, when, and how customers are purchasing is the only way to maximise marketing ROI and reduce wasted spending.
