Behavioral economics shows people make emotional and non-rational decisions often with information “framed” by stereotypes. Click to Enlarge
So-called Millennials (16-32) are aspirational and image-conscious, open to import brands, do have an interest in vehicles and driving, it was revealed today at the Automotive Press Association in Detroit.
However, when it comes to actually buying or leasing a car, it becomes more of a practical purchase rather than an emotional one.
Welcome to the real world.
Millennials say the brands that fit them best have an image they have for themselves: stylish, sophisticated and innovative. Not surprisingly, luxury brands scored highly in these areas, with BMW, Mercedes, Lexus and Audi said to be the most stylish brands, Mercedes, Lexus and Audi seen as the most sophisticated and BMW, Mercedes, Audi, Honda and Ford seen as the most innovative.
While Millennials love luxury manufacturers, those surveyed say they are still most likely to purchase mainstream brands – in order, Honda, Chevrolet, Toyota and Ford – even when price is not primary. These brands, rated highly for practicality, are an indication of what is really affecting their purchase decision.
Herein lies the problem with much consumer research, including automotive. What people say in a clinic is belied by their actual behavior. This has opened a completely new academic industry – behavioral economics – that shows people make emotional and non-rational decisions often with information “framed” by stereotypes and anecdotes, not anything approaching real data. This behavior – on view all the time on Fox “News” – results in marketplace inefficiencies that makes a mockery of traditional economics or in the case of Fox, the avoidance of rational discussions of public policy with outright lies and treason.
With automotive marketing practices, this has broad implications not yet fully understood at the executive level in AutoInformed’s opinion.
When it comes to car shopping, Millennials depend heavily on research to help drive their purchase decisions. This so-called “research” is surprising. They rely more on word-of-mouth when shopping for a car than other generations (Millennials: 43%; Gen X: 28%; Baby Boomers: 32%), and most of that is face-to-face (face-to-face: 90%; blogs/forums: 41%; e-mail: 36%). They are also most likely first introduced to their car of choice through a family member or friend, as opposed to Baby Boomers who are most likely find their car on the dealership lot.
Millennials actually enjoy browsing the dealership lot more than older generations and are more dependent on the salesperson for information. However, they are also more likely than older generations to go out of their way to avoid interacting with dealership staff. They’re looking for experts to help answer their questions and to touch and test out the physical car before making a purchase but they want time to make the right decision, and will value the salespeople who provide the information they seek in a no-pressure way.
This presents a real problem to dealerships with older salespeople, or a sizeable number of salespeople who hop from brand to brand, never fully understanding the brand, its vehicles and the electronic technology they are selling.
