I’ve just returned from Halifax, where I participated in this year’s CADEX event, put on by the Nova Scotia Automobile Dealers Association. The Canadian auto dealer team is pleased to play a large role in the event, and even more pleased that this year’s event may have been the best one yet.
CADEX started with a keynote presentation by Maria Soklis, Vice-President and COO at Kia Canada Inc. Maria’s presentation discussed changing demographics, specifically talking about Millennials and the impact this generation will have on the automotive market.
WHAT EXACTLY IS A MILLENNIAL?
While definitions vary, the Millennial generation is generally defined as those born between 1980 and the early 2000s.
Why does understanding Millennials matter to you as a dealer? According to Soklis, “It is forecasted that by 2025, this demographic will be responsible for 75 per cent of all vehicle purchases. Their sensibilities, their preferences and their priorities will once again help shape the global automobile industry for decades to come.”
Happily, there is plenty of great research and commentary available. As I explored a wide range of sites and sources, I saw a number of consistent themes emerge.
Perhaps one of their most important characteristics is that, generally speaking, cars simply don’t matter as much to them. “Young people today worry more about having a cool phone. So much of their socialization is conducted through that device, “says Soklis. “The car has become somewhat diminished.”
I see this in my own children and many of their friends. They are so conditioned to connecting via their smartphones and social media networks that they find virtual interactions to be perfectly valid substitutes for meeting face-to-face.
I remember a particular discussion I had with my son about how his friends played video games together online. Four or five of them would play as a team, chatting constantly and horsing around even though they were very rarely in the same house. They connected online. One time I asked my son why he didn’t invite his friends over to play, particularly since one lived right across the street. He looked at me quite puzzled, and simply asked “why?”
The reduced priority many Millennials place on the automobile will cause many to put off their automotive purchases, and importantly, to explore relationships with the automobile that are not purchasing or leasing as we have known them. Partial ownership and short-term rentals will grow in importance.
WHAT ARE SOME OTHER KEY MILLENNIAL CHARACTERISTICS?
Great skills with information tools make Millennials very good at comparing information sources, so make sure your marketing and other information is accurate, consistent and transparent.
Much has been spoken about customers arriving at dealerships better informed than the product advisors that greet them. Your stores need to work with these super-informed customers by helping them explore a range of information sources that can inform their choice. Don’t pretend your staff are the only experts. They aren’t, and Millennials know it.
Social media skills and strong online skills result in a high value being placed on referrals: from friends; from their social media spaces; and from referral sites. Be aware of your online reputation. Monitor what is being said so you can be part of the conversation beyond the walls of your store.
Value messages have an important role to play. Just like every other generation, there are plenty of Millennials that want to build a career, buy a home, and start a family. But many are having a difficult time finding meaningful and well-paying roles in the career path of their choice. Compound this with large student debt loads, and the focus on value that characterizes many Millennials becomes easy to understand.
These are just a few points to consider. Do some exploring online and you’ll find plenty of great sources of information about Millennials and how they will behave as automotive consumers. We’ll revisit the topic as well in future issues.
While the Millennial generation presents a challenge to automobile manufacturers and dealers, it’s a challenge the industry is up to. Dealers will succeed in selling to Millennials, just as long as effort is put into understanding the ground rules.
