Avid music-streamers, Airbnb-ers, car-poolers and ride-hailers, Millennials have been dubbed the have-nots who spurn the ‘burdens of ownership’ in favour of the freedoms of a sharing economy.
And it figures. This generation witnessed the banking collapse and subsequent recession – they have lived through an age of austerity.
Yet studies conducted by market research company J.D. Power make the opposite case in relation to car ownership.
Millennials, in the US at any rate, are re-discovering and buying cars, and more so than their Gen X predecessors. Specifically the research found that Millennial’s share of new car sales surged from 18% in 2010 to 27% in 2014.
Whether the stats are skewed around the end of recession or the sheer numbers of Millennials with disposable incomes as compared to baby boomers, the message is that Gen Y-ers are now buying cars.
Despite this, car marketing cannot afford to be on autopilot.
Engaging this hyper-informed autonomous consumer, who actively searches to understand and compare model features for themselves rather than listen to a salesperson, poses new challenges.
Millennials are more focused on experience than ownership, seek access to more innovative services and are more likely to move between car ownership, leasing and other sharing options at different points, with fluid needs and priorities.
Connectivity over consumption
To previous generations, connectivity meant ownership of a vehicle to get from A to B.
To Millennials, connectivity is intrinsically linked to smartphones and rooted in social networking.
It comes as little surprise that 70% of the younger digital natives responding to J.D. Power cited technology and infotainment features as “must haves” when purchasing a car.
This demanding customer is so accustomed to having technology in their hands that they take even best in class tech for granted.
As well as seeking cutting-edge on-board digital gadgets, they also have a new set of expectations from brands. They want pragmatic products that have clear meaning, purpose and a set of explicit values.
And innovation is now defined by far more than tech alone; it is deeply connected to the full package of ‘car-value-service’. These customers seek and expect a 360-degree proposition.
Today’s informed consumer also really values brands embracing corporate social responsibility actions. The emissions scandal will be playing heavily on many customers’ minds as they seek an eco-conscious purchase and a brand they can trust.
Adding value throughout the journey
So how can brands be interesting, trustworthy and relevant for this generation who in a few years will be their main customers?
Rather than focus on obstacles, brands should embrace the opportunities of Millennial behaviour.
Just as they control their TV viewing, with digital, immersive binge watching, the same rules apply to purchase decisions. From research to product comparison to actual purchase, Millennials love to control their hyperactive, digital and mobile-driven journey.
This opens doors for car brands to engage by building relevant touchpoints throughout the entire journey, with programmatic technology enabling personalised targeting at the precise ‘’path to purchase moment”.
But this only works where brands are totally transparent and bring value.
Fortunately, massive advances in consumer-facing tech enable more immersive, engaging experiences than before.
I’ve seen outstanding work from the global auto OEMs in this field already: explosions of video content linked to different customer journey moments, with live video becoming an increasingly important medium, as reported by Digiday.
This taps into the current love affair with real-time, horizontal, anywhere communications. We’re already witnessing experiments with social chat-bots, an engagingly real-time approach for customer care and e-commerce guidance.
The other exciting area is augmented reality, which is transforming the visceral side of car marketing. OEMs can offer virtual showroom experiences via Oculus Rift and HTC Vive (Audi is one brand pioneering here), virtual test drive apps and 360° videos delivering a vivid sense of potential purchases.
Authenticity and value
Millennials run a mile from anything that smells like traditional marketing, advertising and push communications. Brand is no longer a key driver. Yet they love to be entertained, and sharing is their natural social currency. By making them think or laugh, we help them to gain social status and position a brand front of mind.
At media agency Maxus, we worked with Fiat Chrysler Automobiles (FCA) to launch the Fiat 500L – the marque’s entry into the family car category. Aware that our target audience rejects one-way push communications, we spoke to them on their terms (using social media) with a no-holds barred portrayal of motherhood.
The campaign delivered £500k in media value with no other marketing, confirming our belief that social ROI can compete with when it offers the right content.
Millennials may have invented the sharing economy, but plenty in this huge band desire their own car. With tech an important driver in new car choice, carmakers will need to invest in alternative fuels, autonomous driving and mark their place as progressive.
How to advertise this? Simply – don’t. OEMs must continually question themselves and how to transfer their brand essence with authenticity, transparency and real value hardwired throughout.
By Federico De Nardis, CEO, Maxus EMEA