Thirty years ago, the 21 to 34 age group was buying 38 per cent of all new cars. By 2015, according to J.D. Power & Associates, that number had dropped to 27 per cent. Fast-changing consumer behaviour is presenting some challenges for the automotive industry.
An academic paper from the University of North Carolina in 2015 reveals that millennials are driving less than previous generations. It cites changing attitudes and the use of online shopping and social media to explain a 35 to 50 per cent drop in driving amongst this group.
It’s also significant that in a survey of 1,500 16 to 36-year olds – the Millennials, Generation Y, Generation Me, Echo Boomers or whatever you like to call them – by ad agency Moosylvania asking which brands they preferred, not a single automotive brand ranked in the top fifteen.
So is the millennial generation falling out of love with the car?
Mitsubishi Motors doesn’t think so. Neither does Mercedes-Benz – or Porsche. These and other forward-thinking automotive marques, acknowledging the huge marketing challenges posed by the digital revolution, believe that the key opportunity lies in confronting today’s seismic shift in consumer behaviour on its own terms.
It’s the brand that matters
It is not a question of whether millennials need a car in this age of competitive personal transport with offerings from the likes of Uber and Lift – or the trend towards people working from home. It’s about wanting. And desirability, say the automotive marketers, all comes down to brand – brand authenticity, personalized service and a seamless digital experience.
The crucial millennial market may be of particular significance to the automotive industry’s future thinking, but the digital world increasingly envelops every age group. The Baby Boomer generation, for example, already accounts for a third of online and social media users. Pew Research says that 92 per cent of these potential customers will quote online reviews and forum comments when talking to car sales staff. And a survey by Strategy& as far back as 2013 tells us that, even then, more than 90 per cent of dealerships were reporting a growing volume of customers who had already chosen their brand and model before arriving at the showroom.
For most people, buying a car is the second biggest financial commitment of their lives. It can be an emotional process. And given the scope today’s buyer has for research and comparison, of course the buying process has to match up to the digital experience we all now expect.
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A seamless customer experience
For automotive brand marketing, consistency of message and a seamless digital and/or physical experience is what creates differentiation. The online sales environment must provide the freedom to browse products; and in the physical space the customer must be served by informative experts who are respectful and quick to respond. There’s certainly no room for pushy sales people.
Today’s customers tend to know exactly what they want, having done all their research on models, performance and financing without the input of a dealer consultant. For most potential buyers, all they expect from a dealer is reliability and quality customer service.
But far from diminishing the role of the sales team, this changing showroom environment presents the industry with a huge opportunity. The key is to establish a relationship and start building customer expectation from the moment the potential buyer visits your website, watches your ads on Youtube or sees your sponsored posts on Instagram or Facebook. Then to continue that relationship in the showroom both visually and emotionally.
It’s all about connecting the customer’s experience across all platforms, all year round – engaging emotionally with him or her across touch points in marketing and connecting the experience both online and offline.
Blazing the trail
Mitsubishi Motors is among the advance guard in responding to this fast-changing market – recognizing the importance of enforcing brand guidelines and building brand conformity across its dealer network and third party agencies.
The company deploys powerful brand management software to align its dealer network, internal departments and external agencies behind the Mitsubishi brand promise. As a centralized portal, it ensures the correct usage of on-brand materials and brand guidelines, as well as automating the creative production process. The brand promise, content and messaging for every single brand touch point is now managed under a single platform to keep it consistent.
At Mercedes-Benz, sales people are now known as the ‘product concierges’ whose role is to help customers understand the product throughout the sales process, during and after they have left the showroom.
Company philosophy seeks to improve customer experience by eliminating the pressure of the transaction. The brand also recognizes that, because customers are now so digitally aware, it is essential that the look and feel of marketing, store presentation and dealer attitude should align exactly – in other words, by connecting all digital communications with the showroom.
Porsche is another trailblazer in the digital landscape, bringing its heritage brand closer to fans and enthusiasts through online media. The company has established that 60 per cent of its customers know precisely what they want before they walk into a Porsche showroom.
The brand recognizes that social media is an efficient and speedy way to communicate with a younger target group. They make it very clear that marketing isn’t only about advertising, events and brand building but also ensuring that all future products on the road are geared to the expectations of their customers.
Indeed, this thinking shows the way forward for any automotive brand that means to keep winning customers’ hearts, minds and custom. Which is why more and more traditional brands are beginning to transform themselves into digital brands – and to seize the exciting opportunities that the digital future promises.