SEMA Member News - November/December 2010
Gen Y’s De-Fascination With Automobiles
Why Learning More About Them Can Help You Successfully Market Your Products
By Tyler Tanaka
The general public is becoming more technologically enabled through Internet applications, such as instant messaging, webcams, texting and smart phones; people are no longer dependent on their cars to be socially engaged. This increase in personal digital communication has had an especially dramatic affect on those born between 1982–1995, also known as Generation Y or the Millennials.
With the general public becoming more technologically enabled through Internet applications, such as instant messaging, webcams, texting and smart phones, people are no longer dependent on their cars to be socially engaged. This increase in personal digital communication has had an especially dramatic affect on those born between 1982–1995, also known as Generation Y or the Millennials. By remaining connected socially without the need to physically travel, they can enjoy all of the interaction that would normally only take place en route in their vehicles and at their eventual gathering places. That shared experience now takes place online through an exchange of photos, videos and virtual personal experiences.
The car itself has also become somewhat of a burden to many people, both young and otherwise. With gas prices continually in flux and high insurance rates, it can now be cost-prohibitive to own a car. Gone too are the days when young people lined up inside the local department of motor vehicles on their 16th birthdays to anxiously await their driver’s tests. The average age of new drivers continues to go up, according to studies by the Department of Transportation. Nearly 50% of 16-year-olds and 75% of 17-year-olds had their licenses in 1978, compared to 31% and 49% in 2008, and the decline has accelerated rapidly in the current decade. General social pressures have also created increased impact on cars, with environmental concerns consistently being listed as reasons why Gen Y chooses to drive less or not drive at all. State and federal regulations have done the car no favors over the past decade either, with laws increasing both minimum licensing ages and restrictions on how and when young drivers can use vehicles.
So what specific things have caused the dramatic drop-off in attention to the automobile over the last few years? Although there are many reasons that play into the change, at a macro level, the following are three major contributors:
- Toys: We all want the latest gadgets and gizmos as soon as they arrive on store shelves, yet there is only a certain amount of spendable income to go around. Items such as Xbox 360, PlayStation 3, iPads, iPods and FlipCams are dominating consumer spending in the younger age brackets. Couple this with the fact that people do not have to leave their living rooms or bedrooms to order and purchase these new-fangled items. With just a few mouse clicks, that new widget magically arrives in the mail. Online banking is a trusted feature with online shopping, and Internet purchases are now normal. Trusted and reliable information can be found on the Internet without the hassle of traveling to a store and then depending on staff to assist with product information. Everything consumers need is generally found right on their monitors at home or, even more powerfully, in the palm of their hands. Mobile smart phone/Internet usage will continue to power this shift in consumer detachment from cars. The phone and its e-mail/texting/updating capabilities will allow both young and old to stay connected at all times and all places.
- Communications: The consumption of information by young people today is completely different than in years past—not only with social media and properties, such as Facebook and Twitter, but also with how mainstream media is delivered. Everything seems to be byte-sized (pun intended), including status updates in 140 characters, blog postings a paragraph at a time and the delivery of video content in three- to five-minute segments. If you are a parent, you know full well that punishing your child now comes down to unplugging the Internet cable from his or her room or changing the Wi-Fi code in the house rather than taking away the keys to a car. For today’s kids, staying connected and being social now take place through Twitter and Facebook accounts and those media have replaced the car as the social tools of choice. (Ironically, Baby Boomers are currently becoming the fastest-adopting group of users in social media outlets.)
- Economics: It is tough out there, to say the least. High gas prices, insurance costs and the scarcity of inexpensive used cars in good condition all contribute to fewer young drivers owning cars. Minimum wage has barely increased to match inflation and the current cost of living. Kids in their teenage years have a tougher time affording and maintaining cars today than ever before. The cost to repair a vehicle today is extraordinary, and long gone are the days of waking up on a Saturday and giving your car a tune-up with dad. Plus, the bond and connection people used to have with their cars has gone away. New cars come with 100,000-mile warranties, and engine compartments are covered in solid sheets of plastic. Fixing today’s tech-filled vehicles yourself is just not possible. And commuting is another large impact on time, which equates directly to money. That has become a significant factor in many Gen-Y’s lives, because they place significantly more value on their time and the quality-of-life balance than previous generations did. Around 37% of 18- to 29-year-olds have worked less or have been out of work during the recession, which is the highest rate among that age group in more than 30 years, according to the Pew Research Center. Additionally, the unemployment rate for Gen Y remains much higher than the national rate, according to the Bureau of Labor Statistics.
Everything seems to be byte-sized in the modern world, including status updates in 140 characters, blog postings a paragraph at a time and the delivery of video content in three- to five-minute segments. At the recent SEMA Business Technology Conference, more than half the audience consulted smart phones, iPads or laptop computers during each presentation.
I am not intending to paint a bleak picture in any way. I’m only pointing out what many people reading this probably already know. The winds of change are blowing, and it is time for the automotive specialty-equipment market to recognize that a change of sales and marketing course may be in order to effectively reach this Millennial demographic group. But how does an industry steeped in tradition actually figure out how to do that? Using the age-old analogy that marketing is like fishing, the following three items directly relate to the toys, trends and economic issues listed above. If you do your homework on who your customers are today and plan for who they will be tomorrow, you will be able to use both traditional and digital marketing to easily reach those consumer groups and then measure the results accordingly.
- What are you fishing for? Companies need to know exactly who their customers are. If you don’t have precise data, quickly conduct some low-cost surveys to find out. Use inbound phone calls, e-mails and other communications to learn as much as possible about who is buying your product. Tools, such as Zoomerang, SurveyMonkey, SurveyGizmo and Facebook, allow you to gather a large amount of data quickly and easily. You can place links to surveys on your website and an e-mail signature—and with every product that you ship. If your products do not apply to certain age groups, such as Gen Y, stop trying to fit in with marketing programs just because every other brand is jumping on the social media bandwagon. You may eventually need to move into that space, but focus on how to maximize sales today. If you learn that Gen Y and younger is in fact showing interest in your products, quickly form a plan to reach these unique consumers.
- Be where the fish are. This is a given, but do not be naïve and expect to have the same results that other brands are having within certain advertising or social media outlets. Some types of businesses have great success using micro-blogging platforms, such as Twitter and Tumblr, but they may be live- and event-based promoters that can deliver up-to-the-minute results and information. Others get great results by using Facebook to build brand awareness and, ultimately, brand loyalty by engaging with consumers. Then, there are hyper-targeting techniques, such as enthusiast forums (message boards) and blogs, that allow you to deliver specific vehicle make and model messaging. First and foremost, make a plan and then be prepared to change it whenever necessary to maximize your results. Don’t blindly invest money in social media and other digital platforms without first looking very closely at your current customer demographics and whom you are eventually trying to sell to. Also, make sure that you are able to deliver your targeted messaging in the proper way. Is your website built to display on mobile devices, such as smart phones, and tablets, such as the iPad? Mobile Internet usage is going to skyrocket in the next few years, so make sure that consumers have easy access to your product info on a variety of devices.
- Choose the proper bait. Once you have identified the right consumer groups, the costs of digital marketing are generally low enough to try a few different techniques and see immediate proof through results. Experiment with multiple outlets and see what works best. Give Facebook, Google Adwords, Geo-Location, forums, blogs and paid content advertising a try to see what works best based on the consumer data that you have already collected and what information you are gathering with each new campaign. Evaluate and then adjust your campaigns accordingly to focus on successes. Try getting creative and looking at other successful ventures used in other markets. Don’t focus on what the automotive aftermarket has done lately; look at the fast-paced fashion goods and electronics industries to see what consumers are currently gravitating toward, and then take advantage of their history of hits and misses. Experiment with incentives, contests and user-generated content to increase reach and engagement. Try working with select partners to deliver marketing messages in new ways, such as social gaming or viral videos. Whatever methods you end up using, just remember to treat every lead as if it is the most important one ever. Consumers today have little patience for companies that do not go the extra mile in product and service support. The competitive landscape is just too congested for you not to.
There is undoubtedly a tremendous change in the opinions and purchasing decisions involving young people and automobiles. Whether the reasons outlined above continue to hold true over the next few years remains to be seen. Just remember that the automotive aftermarket needs to identify who their true target customers are today and how they will reach them tomorrow. Companies must acknowledge that traditional sales and marketing tactics must be changed to effectively reach the ever-increasing and soon-to-be-very-powerful consumer group that is