As younger generations, particularly Millennials (or Gen Y) and members of Gen Z are coming into more spending power, their habits are reshaping the way we do business. Even longtime brands have to get creative to adapt – developing new ways to market and sell their products or risk becoming obsolete.
According to a recent report by Epsilon, Millennials spend more in online retail than any other generation and social media plays a large role in their ecommerce behaviors. They enjoy interacting with brands, using social media platforms for customer service, co-creating content and entering contests. Gen Z consumers respond more to influencer marketing and peer testimonials. They tend not to trust traditional advertising and communications, seeking “authentic”, trustworthy brands that share their values.
Within the automotive consumer market, Baby Boomers (those between the ages of 55-75 years old) have been the dominant players for many years. Now younger generations are three times as likely to be buying cars because of a major life event like a new job or a growing family.
While Millennials tend to be more practical, opting for value brands with lots of features rather than luxury names, they’re not any less interested in classic or collectible cars than their parents or grandparents. According to results from the recent Why Driving Matters 2020 survey from Hagerty, younger drivers are actually more likely to want to own a classic car than previous generations.
Of the 10,000 United States drivers surveyed, Gen Z and Millennials were most likely to report currently owning a collectible or classic car. In addition, members of the Gen Z and Millennial generations who don’t already own a classic car expressed more interest in owning one than older generations. It marks a major shift as younger buyers become more interested in the classic car market, showing the potential for growth.
Tech-savvy younger buyers are much more likely to use internet reviews and consumer ratings to make decisions on purchases. While practical, they do like cars with a little personality; creativity and clever design goes far. Having experienced the economic recession as many were first entering the workforce, Millennials also tend to be more cost-conscious and are increasingly turning to do-it-yourself (DIY) maintenance and repair to keep their vehicles running.
This is great news for the automotive aftermarket – younger drivers are more likely to drive older cars, use fuel additives and purchase DIY (Do it yourself) or DIFM (Do it for me) parts for upgrades. Millennials drive 72% more than any other previous generation and place value on personalizing their car due to their care about the safety of driving as well as protecting themselves, their car, and others from accidents.
What are the best ways to reach these younger buyers?
Ecommerce. Studies have shown that 59% of millennials have shopped online for auto parts since 2018 and are continuing to grow. According to AutoTrader’s research, “They spend over 17 hours researching their vehicle before purchase, and 71% say they need to be aware of all possible vehicle choices – more than Gen Xers or Baby Boomers. While friends and family largely influence their purchase decision, the Internet is even more influential, with third-party sites being the top source for 82% of Millennials shopping online.”
Quality mobile site experience.
48% of mobile-first auto consumers are Millennials. Websites, email communications, online contact forms, and any other piece of content to promote your brand and dealership absolutely must be optimized for mobile users. A poor mobile experience can turn shoppers away quickly. According to a 2015 CDK Global report, “A majority of Millennials said they wouldn’t wait more than five seconds for a page to load on a mobile device. In addition to slow load times, lack of mobile optimization, interactive features, and quality photos were the top complaints about mobile shopping. Essentially, these shoppers expect to get the same quality shopping experience no matter what device they are using.”
Social media & online engagement. With online channels being such an important factor in the research stages, automotive marketers must be extra diligent in ensuring these channels are optimized for personalized engagement. Be sure to share plenty of content – both informative and interactive – across various sites. Focus areas should include your website, social networks, videos on YouTube, real-time updates and transparency into inventory, online forms to capture a prospect’s information, an easy interface for consumers to engage with a sales rep online, and integration with third-party review sites.
Reviews, testimonials, & influencers. Younger buyers value authenticity and transparency. They care about third-party sites reviews and research to avoid marketing scams. Their skepticism is not cured by multiple 5 star reviews, they will only trust reviews that are honest and appear to be written by a real consumer. Younger consumers utilize both their vast social networks and their online search skills to gather knowledge based on the experiences of others. 73% of Millennials say that it is important to read other’s opinions prior to a purchase. They rely on a type of crowd-sourced experience to inform their purchasing decisions. Whether they’re reading reviews, looking at a friend’s photos, or watching a Youtuber’s walk-through, user-created content is a solid source of likely unbiased information, and that’s incredibly valuable to them.
Cross-generational marketing. Millennials are a lucrative market. Even though as a group, they haven’t reached their full buying power yet, they make up 25% of the population and have an estimated annual buying power of more than a trillion dollars. It’s important to make Generation Y a priority, or at least working to understand what drives and delights this instrumental group. Still – it’s important not to forget or alienate your older audiences. Baby Boomers hold 57% of the wealth in the U.S. and are at peak buying power. Gen Xers make up more than 30% of the American population and 31% of the nation’s income, are financially secure, and have vast purchasing power. As the in-betweeners, Gen X exhibits the buying habits of both the older and younger generations. Among the six total generations living in the U.S., each have their own experiences, values, needs, and preferences. By taking a cross-generational approach to your marketing and sales efforts, you can grow your brand and reach new customers.