Born between 1980 and 2000, (Goldman Sachs), Millennials are defining new commercial routes to market. They are the largest demographic to date, with an estimated 79 million in the US, 3 million more than Baby Boomers (Boston Consulting Group). In the UK, Millennials make up 21% of the population at 13.8 million (The Guardian). In China, the figure stands at a third of the 1bn+ population (Wall Street Journal). Such scale means their preferences and behaviour carry influence, accelerating the emergence of related retail models and communications.
Whilst their weight as a majority is felt, Millennials have come of age in an adverse global economy. Research by the Guardian reports that on both sides of the Atlantic, prosperity for this cohort has fallen significantly. Under 30's in the US are now poorer than those who are retired, with the disposable income of pensioners in the UK growing three times as fast as the income of younger people (The Guardian). In the US, France, Germany, Italy and Canada, the average disposable income of those in their early 20's is more than 20% below the national average (The Guardian). Due to these circumstances, it is widely acknowledged that Millennials are undertaking several key milestones later in life. Marriage has been delayed by an average 7.1 years in the UK when compared to Gen X (The Guardian). Home-ownership is also in decline, with 67% of English 25-34 year olds home owners in 1991 compared to 43% in 2011/12 (The Guardian).
What does this mean for mobility?
A lack of means has led to the emergence of a ‘sharing economy' which has directly influenced the mobility market. Millennials spearhead this approach, being the most willing generation globally to car-share (Goldman Sachs). Whilst such schemes lower economic barriers to goods and services, some predict that it is also reducing the merit of ownership (Goldman Sachs). In contrast, 80% of Millennials overall confirm an intent to purchase a vehicle within the next 5 years (CDK Global). 84% of older Millennials already own a car, with 73% of the younger, non-auto owning Millennials stating they intend to purchase one within a year or more (Auto Trader). 2015 saw Millennials' share of the new US car market grow to 28% (Associated Press). California, the country's biggest car market, saw millennials outpace boomers for the first time (Business Insider). With growth and intent prevalent within this sector, the value of ownership is still present. As this demographic accumulates wealth, it will be able to realise such aspirations, which combined with its size will fuel substantial activity within the marketplace (Bloomberg). As activity escalates, the collective tastes of this demographic will direct marketing methods.
Currently, 54% of all Millennial purchases are made online (USA Today), with the most popular device used to access the internet being smartphones (Entrepreneur). Whilst online, 71 percent engage in social media daily (Entrepreneur). Such high consumption has made these platforms a primary resource for discovering products and deals (Entrepreneur) whilst driving brand affinity. 34% of Millennials state a higher regard for brands that use social media platforms (Goldman Sachs). Portable devices also make the internet highly influential in-store. 43% of millennials use their smartphone to research products, 42% compare prices, 32% read reviews about the retailer and 26% access confirmation emails to pick up items purchased online (PWC).
The collective use of all platforms in decision making means Millennials view smartphones, tablets, social media platforms and stores as part of a cohesive ecosystem over individual channels (USA Today). Such perspective re-enforces the principle that the dominant characteristic of Millennials is that they are digital natives that value experiences (Boston Consulting Group), a trait that is expected to be further engrained in each upcoming generation. Accenture reports a mutual relationship between this characteristic and the desire for rewarding experiences, specifically amongst car buyers (Accenture). This is fuelling the deployment of new retail concepts within the automotive industry, integrating interactive customer experiences both in-store and online. The reach of traditional dealerships has never been greater with the deployment of satellite stores in densely populated areas. Using digital experiences to manage display capacity, these stores require less floor space for display models. Such stores provide convenience to ever busy customers, increasing overall exposure and influence. Brands such as Audi and its Audi City Stores are at the forefront of this movement, increasing sales by over 60% in certain locations (World Economic Forum). Online is also seeing a radical shift as 82% of the Millennial customer journey taking place via the medium (Analogue Folk). New visualisation technology has completely changed the way automotive products have been presented over the web, delivering 3D product models in real-time. Users can fully explore and configure their vehicle, driving a 66% increase in engagement vs traditional 2D whilst driving value across a range of qualitative KPI's (ZeroLight).
Millennials are coming of age within the modern automotive market. By doing so, their digital preferences are fuelling investment in experiences that engage and empower consumers. These experiences are far reaching, creating consistency across every touch point within a connected ecosystem. Millennials value car-ownership, but lack the means to actualise a purchase until later in life. As a result, they utilise a sharing economy to satiate their needs whilst they accumulate wealth. Being such a large cohort, as time progresses, more will gain access to the market, securing the future of a modern, digital-led retail landscape.