Millennials, the people born between 1980 and 2000, are the biggest generation in American history. They’ll be the largest generational group in the workforce by 2020, at which point they’ll command an estimated $1.2 trillion in spending power.
But as you no doubt know, they’re not buying cars at the same rate as older Americans.
Baby Boomers remain the most enthusiastic car shoppers, accounting for 38% of new-car registrations in 2014. Millennials made up only 26% of the new-car market.
Yet Millennials did outpace Generation X in new-car purchases last year.And the improving economy stands to give younger consumers’ finances a boost. With the employment rate for 25-to-34-year-olds at its highest level since 2008, Millennials’ share of the auto market is likely to grow.
So how can you reach this historically fickle segment of the population?
Millennial shoppers, uniquely, have an affinity for brands whose values match their own. In other words, identifying what Millennials value will help you attract their business.
Here are the top three Millennial values we’ve observed in the auto market.
Four of the six most-searched cars on CarGurus among shoppers age 18-34 are practical and family-oriented:
- Toyota Corolla (compact sedan)
- Honda Civic (compact sedan)
- Toyota Sienna (minivan)
- Honda Odyssey (minivan)
Interestingly, none of these are actually the most-searched among 18-to-34-year-olds: That honor goes to the Lexus RX350. But as luxury SUVs go, the RX is a safe, practical choice – it’s quiet, comfortable and very reliable.
Millennials may be gaining ground in the workforce, but they remain a generation burdened by debt. Many Millennials saw their older relatives suffer through the 2007-2008 stock market downturn, as well. Couple the two and you’ve got a recipe for risk aversion – and a strong awareness of the value of a dollar.
Favorable loan terms are certainly encouraging buyers to get back into the market, but attracting Millennials may take more than just low interest rates. Offering competitive pricing will be key to winning Millennials’ business.
The good news: our data shows that Millennials are in fact dipping their toes into the car marketplace. People aged 25-34 make up the largest share of new CarGurus.com registrants (people who create an account on CarGurus).
They’re Always Connected
Surprise, surprise: Millennial shoppers are attached to their smartphones. According to Bank of America, more than half of younger Millennials (ages 18-24) say they check their phones “constantly”.
Our data bears this out. Millennial CarGurus.com users are 60 percent more likely to be browsing on a mobile device than a computer. For older shoppers (as you might imagine), the proportions are reversed: that is, older people prefer desktop to mobile by a wide margin.
How can you take these three Millennial values into account in your business?
1. Merchandise practical features
Baby Boomers may yearn for muscle cars, but Millennials are all about pragmatism. Safety, fuel economy and reliability are what Millennial auto shoppers are seeking – so emphasize what makes your vehicles a practical choice.
2. Be patient
Millennials are straining under the weight of student loan debt: the average college grad owes more than $20,000 on her student loans. With so much debt on their plates already, Millennials aren’t going to rush into the auto market. So be patient with Millennial shoppers. Consider how you can reach them across different platforms – email, direct mail, display ads – to stay top-of-mind. The groundwork you lay today will have an impact when they are ready to buy.
3. Optimize your mobile presence
If your website isn’t mobile-friendly and your inventory isn’t available on platforms that attract lots of mobile users, you may be missing out on Millennial shoppers. With mobile internet use on the rise among car shoppers of all ages, your digital strategy must accommodate mobile.
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