Are You Positioned to Attract Millennials?
Everybody’s talking about the millennial generation—sociologists, the media, and of course, marketers. The better the recreation industry understands how to sell to millennials, the better we can understand our economic future and position ourselves for success.
Being a member of the preceding generation, Generation X, I wanted to get a better understanding of what defines a millennial. In addition, I took a look at their impact on the RV market, examining a study done by our data services team looking at vehicle purchase trends over the last five years.
Who are Millennials?
The general consensus is that those born between 1980 and 1996 are considered millennials. According to a U.S. Census Bureau press release, millennials were one-quarter (83.1 million) of the total population and surpassed the population of baby boomers (75.4 million) in 2015.
Here are some characteristics of the millennial generation that stand out:
- They’re confident and tolerant but have a sense of entitlement and narcissism
- They value a meaningful work environment, finding a creative outlet, and they prefer immediate feedback
- They think that simple participation in an activity should yield a reward
- Their heavy social media use augments collaborative skills and creates a preference for a team-oriented environment
- They prefer to work for companies engaged in the betterment of society
- They’re willing to take a pay cut to pursue careers aligned with their passions
- They have higher college attendance rates than Generation X, but experience higher unemployment or underemployment levels, due to entering the workforce during the Great Recession
- They’re more likely to live with their parents due to focusing on school and career—and focus less on spouses and starting a family
- They define the term “adult” based on certain abilities and characteristics, rather than more traditional “rite of passage” events
Now that we understand a little more about what makes millennials tick, let’s take a look at what their impact on our industry.
We studied 370 dealers’ activities, including 56,346 new unit sales from 8/1/2012 to 7/31/2017. The sample data included all RV classes including Class A, B and C motorhomes, fifth wheels, travel trailers, and pop -up trailers.
Here are a few key study results:
Average Age of RV Buyers:
The average age of customers purchasing a unit over the last five-year period studied is 52 years old. The demographic breakdown is based on five-year age segments. Those ages 40-69, purchased 72.18% of all units in the study.
Sales by Generation:
When we broke the percentage of sales down by generation over the last five years, we see that the baby boomers top the charts, as might be expected, with a five-year average of 47.68 percent. Generation X has maintained a fairly flat second place, with a five-year average of 27.42 percent. Finally, the millennials have demonstrated a strong five-year increase, from 10.2 percent to 23.15 percent— or a 12.95 percent increase in market share. In fact, the millennials are on target to surpass the Generation X purchase trend within the next 12 months if the current trends continue.
So what does this mean for you?
It means that we need to put ourselves in the shoes of a millennial consumer. We need to adjust how we market our products and services and present our message. And we need to tailor our services so they reflect the things that are important to millennials.
There’s a lot of untapped opportunity in this large group. If we can adjust to attract members of this demographic, we’ll be able to sustain our businesses and be successful for many years to come.
Here are four areas to focus on:
- Product Offering: Do you have the right product on the lot? Consider that millennials gravitate toward companies (and I’ll even say products) that are engaged in the betterment of society. Whether you emphasize the sustainability of your products, or simply emphasize the positive corporate philosophies behind the products you carry, your choice of products is important.
- Web and social media content: Millennials have grown up with social media. It’s second nature for them to do their research there. So it’s important to present a consistent philosophy and brand message online. Have an employee assigned specifically to your social media channels, and keep the content fresh.
- Lifestyle: Emphasize the idea of RVs as a lifestyle. RVs can provide a simple way of living, traveling and having fun. The current trends of tiny homes and decluttering of one’s daily life are closely related to the RV lifestyle.
- Retail Finance options: Be prepared to offer a variety of finance options. Because of younger buyers’ limited credit histories, you may have to work a little harder in finalizing the sale. Millennials’ discretionary income isn’t quite at the same level as an older Gen X or baby boomer customer. Be ready to offer a solution appropriate to their phase of life.