Something that a lot of dealerships are focused on is the next generation of car buyers, so let’s look at a few ways that consumer insights can help you find ways to target Millennials, Gen Z and whoever else is coming up in the pipeline.
LOCALiQ has a wealth of proprietary consumer insights, but we want you to be able to play along so let’s use ESRI’s Market Tapestry Segmentation tool. All you have to do is enter a zip code and you’ll see the top three market segments found there. From there, you can click on a PDF link and read a consumer profile – what they earn, where they live, what they’re interested in – for each.
You’ll want more information than this to understand your market, but we’re just looking at a few of the ways that data can help you plan for the future. Let’s see how consumer insights can help your dealership…
Look for Geographic Constants
One of the consumer segments ESRI mentions is Military Proximity, a young, diverse market connected to military bases. This group shows up all over the country; from Honolulu, Hawaii to Minot, North Dakota.
While specific lifestyle tastes may change over coming decades, a military base means that you can count on having young military personnel and their families in the local market year after year after year. For a dealership, this might mean that catering to young families with a lot full of family SUVs and minivans is solid bet. A dealership could also decide that as long as there is, say, a Marine Corps base close by it makes sense to make young males a main target audience.
This isn’t confined to military bases. For example, you could look at the Nashville area and assume that the local market will always attract young people who are interested in being involved with or connected to the country music world. How large of a Nashville segment this is and how much sense it makes to target it would take further research, but you have a constant and constants are great.
Of course, the local base may close or you might be making a pretty big assumption that everyone in Nashville is super into country music. That would change the face of your market, or your understanding of the market considerably.
Anticipate Life Changes
The ESRI segment with the best name is the Young and Restless group. This group is made up of young, single, educated, low- to mid- income professionals. Most of these folks live in urban centers in the South, with a fifth of them residing in Texas.
Here are two interesting features about the Young and Restless. They are a…
“Highly mobile market, beginning careers and changing addresses frequently.”
“These are careful shoppers, aware of prices, and demonstrate little brand loyalty.”
There are a couple of things that might happen down the road for this group. First, they might find their professional footing and have more income to invest in a car. They may also start families and have no choice but to invest in a new car, especially in Texas and other parts of the South where mass transit options are limited. If you have a high concentration of Young and Restless consumers in your dealership area, you may have a looming market on your hands.
You’ll likely want to use data tools to keep up with the evolution of these new customers. As income levels improve, brand loyalty may improve and interest in bargains may wane (they have more cash now). They may also start moving out of the neighborhood, in which case it could make sense to target specific types of customer journeys where you can hit a sweet spot. Maybe you target them with the kind of car that someone buys after their income rises significantly, but not enough to put him or her in a ritzy zip code.
It could come to pass that this group is permanently stalled for one reason or another. Here, you’ll want to keep an eye on how segment preferences change over time, or if it mutates into a different market segment altogether.
Connect the Cultural Dots
Trendsetters are young singles with high amounts of disposable income. Typically found in high-rent areas like Hollywood and New York City, this group tends to be image conscious, brand conscious, and interested in new experiences and hobbies. And this group likes to document their experiences on social media.
The Metro Fusion group is made up of young singles, families, and single-parent households. This segment has a high concentration of recent arrivals to the U.S. While income levels are low, aspirations are often high. Like the Trendsetters this group values personal appearance and chooses branded clothing.
While these groups have different budgets and lifestyle, it is possible that they are taking cues from each other. For the Metro Fusion group, the Trendsetters may represent aspirational goals. Metro Fusion folks may follow Trendsetters on Instagram, look to them for fashion cues, etc. For Trendsetters, the urban and international background of the Metro Fusion group may suggest opportunities for new, interesting, and more authentic experiences. They may pay attention to Metro Fusion’s cuisine or music, dabble with aspects of Metro Fusion’s fashion choices, etc.
Dealerships can try connecting the two groups. If you serve a lot of Metro Fusion customers, you can experiment with messaging that has a Trendsetter vibe without being Trendsetter-targeted. Trendsetters aren’t buying a lot of cars at the moment, but if you’re targeting this market you could play with the Metro Fusion vibe.
The risk here is that you’ll make the wrong comparisons, or get distracted by a specific customer type and miss out on the underlying opportunity. A data-driven approach will be helpful here, plus evaluating these customer segments against actual market sales trends that can tell you who is buying what.
Break Down the Behaviors
This time, let’s look at three segments.
Emerald City consumers are young people who live in low-density urban areas, typically older neighborhoods, and have high levels of employment.
Set to Impress consumers are image-conscious young people with lower incomes who live in affordable multi-unit complexes.
American Dreamers are young married couples, often foreign born, who have children and frequently live in multi-generational homes.
These segments have different tastes and lifestyles but they share something important in common: they love their phones. A dealership who targets these groups can reasonably assume that one of the best ways to engage is through their mobile device. The message may vary based on who you’re after, but this insight gives you a nice starting point.
The Kids Are Alright, Right?
We looked at millennial car buying habits and touched on a few Gen Z consumer insights here, but you can apply the same principles to any car buying demographic out there. For what it’s worth, LOCALiQ AUTOMOTIVE has in-depth consumer insights based on 125 million monthly visitors across the USA TODAY NETWORK, and the end-to-end solutions to connect with the lifestyle group of your choice, plus the ability to layer in auto shopper intender audience targeting. Hit us up!
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