Today’s American seniors are healthier and have more discretionary income than ever before. Likewise, millennials are the up and coming generation with more purchasing power than any other demographic. The good news for the auto industry is that they are spending and in the market for new cars.
According to US Census data, from 2003 to 2013 the number of licensed drivers over the age of 65 increased by 8.2 million, a whopping 29% increase. There are also approximately 3.5 million drivers over the age of 84, a 43% increase over a ten-year period. Clearly this demographic can no longer be ignored and automotive manufacturers and dealers are taking notice.
They also aren’t in the market for older vehicles simply to get them from point A to Point B. They are looking for minivans to drive the grandchildren around, or perhaps a new Harley may be to their taste. According to Harley-Davidson CMO Mark Hans-Richer, “We sell new bikes to guys in their 80’s all the time.” And yet other segments within this demographic are looking to spend big on luxury. According to CarGurus, the number one car searched by senior citizens on its site is a Corvette.
Americans are living longer, with life expectancy increasing by 3.3 years in the past 20 years. Additionally, new safety features such as active braking, backup mirrors, and blind-spot warnings and sensors have made trading up to a newer model more appealing to older drivers. Despite the huge profit potential of this generation, many auto dealers aren’t catering to this group as much as they could, leaving opportunities – and cars – on the table, or rather in the showroom.
Millennials are a huge demographic with tremendous spending power. By 2025, millennials will account for 46% of total personal income in the U.S, according to Accenture. Despite the misconceptions that millennials are not interested nor have the means to purchase a new car, research shows that just the opposite is true.
According to a report by J.D. Power, millennials accounted for 26% of new vehicle retail sales. Additional research by a Cars.com Nielsen Omnibus study shows that Millennials are more likely to purchase a car over the next 12 months. 35% of Millennials indicated they would be in market for a car as compared to 25% of U.S. adults overall.
These numbers will only continue to grow over the next five years as this generation continues to mature. According to a study by Deloitte, almost two-thirds of Millennials plan to buy or lease a car within the next three years, and more than three-quarters plan to purchase or lease within the next five years.
Both American Seniors and Millennials represent great opportunities for the automotive industry. This includes manufacturers and dealers as well as insurance carriers and aftermarket services. However, you may be missing these audiences entirely if you aren’t targeting them through the channels they prefer. Each generation approaches car shopping differently and you must target them with the messages they will respond to and the channels they most frequently use to reel in new customers.
Today’s seniors are using more digital channels than ever before. They not only have email, but they are searching on Google, browsing Facebook, and reading newsfeeds. However, while this generation may be more technically advanced than their parents, marketing online to this older generation continues to be a struggle for many businesses. According to study by the Newspaper Association of America, only 27% of seniors used the internet to make a purchase. This is a generation of consumers who did not grow up in the digital age and prefer more traditional and offline communications in comparison to online ads and mobile messaging.
So despite the articles that may tout that this generation should not be forgotten when it comes to digital, research continues to show that direct mail is still considered the most effective medium for this generation. However, this doesn’t mean you need to blanket them with mass messaging that has no relevance. Direct mail is a hugely effective channel for audiences across all age groups, as long as you personalize the messages and target with the right offers.
Consider using a specialized automotive data source to target senior adults with relevant messages. For example, you can create a list by demographics such as age, hobbies, lifestyle, and proximity to your dealership. Additional automotive intelligence can also be added to each consumer profile, such as exact make and model of the current vehicle being driven, other vehicles in the household, and Blackbook value of the car they currently drive. If targeted in the right way, seniors can become loyal customers who spread the word to their friends and family.
Millennials are technically savvy and seek information across multiple social and digital channels.
According to Placed Inc.:
Millennials also turn to independent research sites more often than OEM or dealership sites. And when asked how important are online reviews of dealerships written by consumers in helping select a dealer to purchase from, 79% answered “Very Important or Extremely Important”. (Source: Cars.com)
To reach millennials, dealers and OEMS must have a strong online presence across a range of digital channels. Delivering a consistent message across mobile and independent sites will go a long way to gain attention with this younger generation. Additionally, encouraging online reviews and social engagement is an important process for building up positive word of mouth.
As with any age group, seniors and millennials are generations with very unique expectations, lifestyles and channel preferences. By understanding the characteristics of each and creating relevant messaging across the right channels, the automobile industry can make huge strides in gaining these high value customers.
To learn how to target millennial or senior car prospects with accurate marketing data, learn more about Auto ID.