Solving the Millennial mystery: A five-step guide to reaching young drivers

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From Steve McQueen’s Ford Mustang in classic 1968 movie Bullitt, to the Ferrari 250 GT SWB California Spyder in 1986 comedy Ferris Bueller’s Day Off, the motor car has played a prominent role in the coming-of-age of successive generations. That is, until those troublesome Millennials turned up.

Fears have been growing that consumers born in the 1980s and 1990s lack the connection to the motor industry which characterised their parents and grandparents. The theory goes that a deadly cocktail of recessionary economics and improvements to urban public transport had nudged youngsters into embracing a future without car ownership.

And the numbers can look worrying: in the UK, the number of young people taking driving tests fell by almost a fifth between 2007 and 2012. Only 31% of 17- to 20-year-olds hold a full driving license, compared to 43% in 1995.

So how to best approach this Unreasonable Consumer, to borrow a phrase coined by Adam Morgan in his book A Beautiful Restraint? We believe there are five principles brands should focus on.

1 – Communications experience

The first is that Millennials demand communications as an experience, and not just a message. This group has effectively been trained by smartphones, apps and online services to assume everything is easy and well-delivered. They want experiences as much as products and they expect services and transactions to be easy.

2 – Transparency

Secondly, transparency and ease of access to information is vital. As discussed in our feature on changing approaches to automotive retail, brands such as Fiat and Audi are working hard to help consumers select their ideal vehicle using interactive digital experiences, helping to deliver the dealership experience without asking buyers to visit a showroom.

3 – Personalisation

When it comes to our third principle – the importance of personalisation – car companies should learn from the way young people buy their most prized possession: their smartphone.

For these consumers, a smartphone is not just a telephone, but an entire lifestyle placed into a pocket or handbag. Similarly, a car should no longer be viewed as simply a vehicle to transport the driver from A to B. Instead, it should fit into the immersive, entertaining, social experience these consumers demand from other forms of technology.

4 – Connection

This brings us to the fourth principle, namely that car companies must provide a connection to Millennials’ lives through apps and digital technology. As our feature on connected cars outlined, manufacturers must open the vehicle as a platform to a wider network of partners, and help those partners deliver a consistently great user experience.

Analysts at GfK report that, across Germany, the UK and the US, 46% of drivers aged under 34 find the idea of a fully integrated in-car entertainment system ‘very’ or ‘extremely’ appealing. This is more than double the percentage of drivers aged 45 and over. Those in the younger age bracket are also nearly twice as likely to prioritise in-car technology when considering a car purchase.

5 – Services

The final principle is the need to enhance and digitise services levels. A 2015 report by market research company J.D. Power and Associates claims that younger car buyers are put off by the prospect of bartering with dealers – more than half would rather complete the purchase without needing to enter negotiations.

Convenience is vital, reflected in the finding that 44% would be happy to pay dealers to pick up their car for repairs, rather than stepping foot in a garage.

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The good news for motor brands is that young people are not intellectually or culturally opposed to the idea of car ownership. As the global economy has slowly staggered clear of the financial crisis of 2008, and these consumers have seen personal incomes rise, they have shown themselves every bit as willing to buy cars as previous generations.

Millennials now account for 27% of all new car sales in the US, more than their Generation X predecessors and second only to Steve McQueen’s Baby Boomers. And, despite a supposition that younger consumers are wholeheartedly embracing the sharing economy (a topic explored in our feature on the future of car ownership), a 2015 investigation by Millennial Branding reports that 71% of young adults would rather buy a car than lease one.

Millennials represent the most extreme example of all the trends we have examined in this report. Young people do want to buy cars, but they are demanding new ways of doing so, and a failure to comply leads to brands falling from consideration.

The generational split is permanent, and car firms must now invest in mastering this new world, testing and learning the best approach for their brands. The cost of failure in the eyes of a generation with high demands would be terminal.

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