The Largest Living Generation
Millennials are now the largest living generation in the United States behind Baby Boomers. They are defined as individuals born in 1982 and up to 20 years after by researchers Neil Howe and William Strauss. It is now essential for all industries to recognize their scope, size, interests, and purchasing habits. A 2015 Forbes article provided an informative profile of Millennials as representing over $200 billion in purchasing power, not heavily influenced by advertising, having a desire to be involved in the process of how products they use are created and have loyalty to brands they have come to know. These factors present a unique opportunity for car dealers to create a viable market with a group, which interacts with brands on social media and would prefer to consult a blog before making a purchase.
The Brand Loyalty Myth
A common misconception about Millennials is their lack of brand loyalty. While they expect more from the companies they engage with, once introduced to an authentic experience, they are more than likely to stick with the company for years to come. Another unusual take away about Millennials from the Forbes study is their affinity for cars over other large items. According to the article, 71 percent would rather buy than rent a car, compared to 59 percent who would be open to purchasing a home. A hallmark of the group is their penchant for holding off on large purchases in response to rising student debt and underemployment.
The Impact of Their Delayed Life Choices
A 2016 article by MarketWatch continued to support the belief that Millennials seek lower risk purchase and regularly hold off on conventional life milestones —marriage, starting a family, buying a home— to take care of looming expenses and a sluggish job market. The findings unsurprisingly revealed that Millennials were interested in smaller cars like mid-sized sedans and muscle cars for practicality and affordability. They were heralded as having different tastes than their parents since life may have been starting a little later. However, a new study has shed light on the fact that this group may not be as different from their Baby Boomer Parents.
The Need for Sport-Utility Vehicles
According to 2017 data from the Zillow Group, Americans aged 18 to 34 have become the largest group of homebuyers, and half are now residing in suburban areas. Even though they have delayed the choices to have become married and expand their families, they eventually are deciding to live similar lives to their parents. As a result of this trend, Millennials are purchasing sport-utility vehicles at a larger rate than first thought. The largest groups to buy sport-utility vehicles are those 35 to 44, and in the next 10 to 15 years, almost 25 million people will join the age bracket and likely become purchasers of larger vehicles as their life situations change. Data such as this forces car manufacturers who specialize in larger vehicles to begin preparing marketing campaigns that acknowledge the evolving needs of this group while maintaining the authenticity that creates brand loyalty.
What Can Dealers Do to Engage This Group?
Car dealers are in a spot to further connect with these consumers as they become parents and need the extra space and safety. So, what can they do to begin this connection? Dealer.com listed tips to engage Millennials better. They suggested that dealers optimize their website to run seamlessly on multiple devices since Millennials often use mobile for research and purchasing decisions. They also encouraged dealers to have an interactive website with chat features, videos, and the capability for pricing notifications. Dealermarketing.com advises that dealers provide as much information and transparency as possible without non-essential forms or obstacles. They also suggested systems that allow dealers to virtually co-browse with Millennials to answer any questions they have regarding financing. As this group continues to grow, dealerships will have the opportunity to grow with them and provide the services they need.