Luxury Carmakers Overhauling Marketing Efforts To Reach Critical Millennials
Millennials are the key to future-proofing for BMW and other luxury car brands, BMW North America CEO Ludwig Willisch told the 2016 Automotive Forum in New York Tuesday. Celebrating BMW’s 100th birthday, Willisch said the company reached that milestone by anticipating customer needs. “Millennials are the future of our industry,” he said on a panel.
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Millennials are very different in shopping and consumption habits from the baby boomer demographic that has been the core BMW customer for years, said Willisch. Companies have been making a marketing mistake by lumping the 83 million American millennials into one group, trying to distill a definition of wants and needs, which Willisch called a “recipe for failure." He called millennials, with a composition that’s 44 percent nonwhite, the “most diverse generation in American history.”
BMW’s target customer averages household income of at least $150,000, equaling the top 1 percent of millennials, or roughly 720,000 consumers in the U.S., Willisch said. A BMW survey of that target customer found 93 percent of millennials average 12 hours of research online before buying a car, and 81 percent use independent sources to validate prices to pay, he said. As a result, they make only one or two dealer visits before choosing a car. The traditional test drive won’t likely sell a car, said Willisch.
Millennials define luxury on their own terms and that's no longer exclusively defined by “comfort, features and sporty handling,” said Willisch. Luxury for millennials also means technology, connectivity and sustainability, he said. But “technology must be humanized to resonate,” he said. A car packed with the latest technology “means very little to them unless that technology supports their lifestyle,” he said. They also want their world to be “customized for them,” said Willisch of millennials. “None of what they own should be generic or predefined." He cited Coca-Cola’s marketing strategy to make soda cans with different names on them. Millennials also want the products they own to be discovered, “not dictated,” he said.
BMW has an alliance with GoPro through an integrated app that allows a driver to use a camera through vehicle controls, Willisch said, an example of meeting millennials on their terms. BMW Connected Drive allows drivers to lock their doors with a smartphone app.
BMW is also targeting urban millennial drivers who can’t afford or don’t want to own a BMW at this stage of their lives with mobility solutions through a global effort, Willisch said. That includes a parking app that “takes the hassle out of finding a parking space.”
Joe Eberhardt, CEO, Jaguar and Land Rover, said connectivity is a requirement in the luxury market, citing the company’s collaboration with Intel to develop next-gen digital vehicle prototypes that connect the car, mobile devices and the cloud. Connectivity isn’t just a hot button for millennials but is “a requirement in the luxury market” today, he said.
Unique marketing experiences are also part of reaching the luxury millennial customer. Jaguar is using personalized video in its Art Performance Tour to introduce the XE and F-Pace models. As part of the tour, participants audition to perform in their own action movie. Participants are plugged into scenes of the stock video, which are sent instantly to the person’s mobile device. Following the video, they’re sent to the main event, where they can test drive one of the cars.