The millennials have been known to impact several industries, causing consumer behavior to shift significantly and transforming the business landscape. Years ago, many experts believed that millennials would not be interested in owning vehicles. The top reason backing this forecast was the growing environmental consciousness among millennials, which was believed to be the success driver for ride-sharing services and public transportation.

With car sharing being the most popular transportation solution, the prediction was that vehicle ownership will not be as strong as in previous generations. Studies, however, have shown otherwise. Surprisingly, most research points to the idea that millennials are actually interested in owning vehicles. According to Deloitte, this generation is expected to take up 40% of all new vehicle purchases for the next 10 years.

The big question then is: What is the verdict? Will millennials likely be vehicle owners or stick to ride-sharing? If they will take up a large portion of the purchases, what can dealerships do to attract a larger market from this generation? Read on to learn more about the millennial generation and their attitude towards vehicle ownership.

Who are the Millennials?

Millennials refer to people born between 1981 to 1996 based on the Pew Research Center’s classification. However, others consider the generation’s birth years to be from 1980 to 1994. Generally, they represent about 30% of the world’s population and are known for having different lifestyle preferences compared to the previous generations.

For one, millennials are known for being more vocal, with many wanting to share their opinions on certain topics or products and services from businesses. They are comfortable with the online space, having been exposed to many social media platforms, and thus enjoy looking for content online. YouTube, in particular, is a hit for them as videos appeal the most to their age group.

Furthermore, smartphones have become integral to the millennial lifestyle as they grew up at the time when technology and mobile phones advanced rapidly. A study by Nielsen showed that their generation had the highest mobile penetration rate of more than 85% in the US. Thus, the device serves as a primary source of information for virtually everything.

Millennials have long been considered to be disrupting many norms that have been established by the past generations. From food eating habits to house-buying decisions to entertainment options, several differences distinguish this generation from their parents. Thus, the challenge for the auto industry is determining how to retain and expand the market from this generation.

Millennials Want to Own Vehicles

Contrary to the belief that millennials will be less likely to own vehicles, surveys show that many of them still own vehicles. While it is true that they have a different behavior and perception on transportation, experts say that their choices will not affect vehicle ownership as much as what was once initially thought. According to Knittel and Murphy, who used data from the US National Household Transportation Survey, these life choices are only expected to reduce vehicle ownership by less than 1%.

Other experts explain that millennials are not necessarily aversive to purchasing and owning vehicles, but several generational factors may have transportation implications. For example, this generation is more likely to live in cities and urban areas, which can make owning a vehicle less advantageous. Additionally, millennials are more likely to be single and childless in their life, which can also affect their choice of transportation.

Despite the reasons mentioned above, insurance expert Adam Johnson states that the factors do not necessarily point to a decline in vehicle ownership. It may seem like millennials are not too keen on having their own cars or vehicles, but Johnson emphasizes that this does not mean they are turning their backs on the idea completely.

Despite Ride-Sharing Hype, Vehicle Ownership Remains High

The demographic shift is threatening the success of the automotive industry, with many questions being raised on the future of vehicle-buying given the generational changes. While it has been observed that millennials seem to be buying less cars or driving less frequently, numbers say otherwise.

One survey in 2019 showed that the global ownership of cars is high among millennials, with 75% of respondents saying that they currently own or lease a car. Among this group of respondents, 83% say that they plan to own or lease another vehicle in the next five years. These results show huge potential for dealerships as the trend is expected to continue in the following years.

Several Factors Driving Millennials’ Transportation Behavior

Ultimately, the verdict is that despite the hype for ride-sharing services and a car-free lifestyle, it is clear that millennials still rely on personal vehicles to get around. Several studies and research paint a different story from what was expected and predicted by many experts. Comprehensive analyses revealed that several factors must be considered to understand the shift in their purchase behavior.

Going back to Knittel and Murphy’s study on vehicle ownership across generations, their findings show that millennials own about 0.4 less vehicles than Baby Boomers at the same stage of life. By looking at general identity alone, it appears that younger people are less interested in owning a vehicle. However, analyzing the data deeper, the researchers found that the story was much more complex than it initially seemed.

One significant finding shows that millennials generally travel less than their predecessors, but after considering the number of children, education, and marital status, they end up travelling more miles. Knittel and Murphy concluded in their study that any differences on millennials’ view on car ownership is trivial.

Creating a Pro-Millennial Customer Experience

How, then, can dealerships appeal to millennials? This big question is now at the top of many business owners’ minds, especially since the generation has different preferences than the previous generations. Creating a pro-millennial experience is perhaps the most important step to take to attract more customers from their age group. Here are some vital tips to take note of:

1. Go Digital

One of the first and possibly the most important things to do is to go digital. The millennials are known to be digital natives, having grown up in the age of the internet, so you can expect that they look for most of their information online. When it comes to vehicle-buying, they will likely conduct their research online, looking through various websites and reading customer reviews.

Due to the COVID-19 pandemic and the many restrictions that came with it, customers are also starting to lean towards an online buying process. Traditionally, the process was to do research online, but buy the vehicle physically. Today, however, changes are being made as buyers are now more wary of leaving their homes. Thus, dealers must allow buyers to buy online if they want to keep up with the trend.

2. Promote Transparency

Whether it be buying vehicles or paying for service repairs, millennials want transparency in prices. You must be more direct and honest about prices from the start as they are not afraid to voice out their opinions whenever they can. Aside from prices, the process must also be explained to them thoroughly, so they know what exactly to expect when working with you.

For dealership service centers, it is important to show customers proof of what repairs need to be done. Doing multi-point inspections allows you to create a sense of trust and prove your reputation and credibility. Overall, transparency truly is key, so your goal is to make customers feel that the process, pricing, and whole experience is fair. This way, they will have a good impression on your business and possibly recommend you to other people they know.

3. Use Social Media

Digital advertising presents tons of opportunities to reach more customers. Nowadays, the traditional word-of-mouth is no longer enough. Given that millennials are highly immersed in technology, social media platforms are the perfect way to tap into that market of customers. Surprisingly, many dealerships have yet to harness the power of social media, so doing this can give you an edge over your competitors.

Creating a Facebook page can be a good starting point to expanding your social media presence. Facebook has introduced several advertising tools that can help you target a more specific demographic by filtering factors like age, geographic area, income, and the like. These can help you create more targeted advertisements to ensure that you reach your intended audience.

4. Create Loyalty Programs

Customers are now becoming more selective about the brands they support, so coming up with more marketing practices will be essential. Creating promotions and loyalty programs can set you apart and help you appeal to millennials more as they value personalizations and discounts. However, in doing this, you must think of what is important to your customers.

Millennials are known for being more socially conscious about their decisions, so you can use this to promote your brand further. One way is to look for organizations where you can donate a portion of your sales to, so customers feel like their money is also contributing to a larger cause. Millennials make up a huge market in the overall population, so capturing their interest is essential to widening your customer base.

5. Inject Fun

If you want to make your dealership or service center memorable, you must give customers a reason to keep coming back. You can do this by injecting some fun, making your place look welcoming, greeting customers in a friendly way, and overall creating a warm atmosphere for them. Make your waiting area accommodating by having a TV turned on for entertainment, preparing some snacks and drinks to keep customers busy, and the like.

Transitioning into the Digital Landscape

Transitioning into the digital space is one of the biggest steps that dealerships and service centers must take to attract the millennial audience. You can start with a social media page, but having an accessible website will be useful to provide all the pertinent information that buyers need. You can make your site more interactive and helpful by integrating features like calculators to assist shoppers in estimating costs based on their vehicle needs.

Once you have your website designed and optimized to reach your target audience, you can proceed to use social media for marketing. With social media, you can engage with your customers, update them with important announcements, and keep them on the loop with whatever you have to offer. Social media platforms also have tools that you can use to create targeted ads to reach more users.

Moving into the digital space also means streamlining your operations with technology. Millennials want speed and convenience, so providing them with a seamless online experience is a must. Make sure to update them through texts or social media, allow them to book appointments online and remind them about these, and offer online payment options. There are tons of ways to go digital and enter the online space, so capitalizing on these opportunities is essential.

Understanding how to use various digital tools is now integral for vehicle dealerships. Technology is now a crucial aspect of any business, and now that the pandemic has restricted people from moving around too much, it has become even more important. Currently, many dealerships have yet to adjust to this change since transitioning can come with some roadblocks and challenges. However, doing it as early as possible can give you an edge and set you apart from your competitors.

Contrary to beliefs that millennials are not likely to be vehicle owners, the numbers show that this generation is certainly a promising market for dealerships. Essentially, the verdict is that they want to own vehicles and are still interested in buying them. However, the nuances in their lifestyle and preferences will require businesses to make some adjustments to grow their customer base. Failing to appeal and respond to the unique needs of this demographic will be the main reason why millennials do not shop from your dealership or visit your service center.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *