Experts Discuss how Millennials Consume Content, Shop Differently

AMR 2013 audienceReaching millennial consumers is a key focus for marketers in the auto industry, and was a key topic during presentations and panel discussions at the October J.D. Power Automotive Marketing Roundtable in Las Vegas, NV. A few highlights from a few sessions with panelists and presenters that addressed millennial consumers are presented.

“Let’s talk about millennials. . . They won’t get cable. They don’t have any money. They’re entitled. They want to do their own thing. They’re a completely digital first generation.”—Mike Shields, digital editor of AdWeek

How Different are their Media Consumption Habits?

“My team at Microsoft—80% of them are millennials—it’s an on-demand environment. They want to consume a lot of content at the same time. They can do it better than any other group. Some 83% are using a second screen and multi-tasking. . .You have to make sure you have something there to complement what they are consuming on TV.”—Randy Shaffer, director, Xbox West Sales, Microsoft

“We see ‘fanboys’ consuming media voraciously across all platforms. They go to five movies a month. They’re watching two more hours of television—on demand—than their own peer set. They’re consuming a ton of web video. In the case of gamers, they are willing to pay for content. They’ve been paying for $60 games for a very long time. . . You need to figure out how to present it to them. They will steal it first if they have to. But, if it’s good, they are willing to pay for it—that’s proven in gaming, premium video and web video content as well.”—Jay Sampson, executive vice president, sales and operations, Machinima Continue reading ›

J.D. Power Expert Profiles U.S. Auto Market Sales Trends

 J.D. Power’s Deirdre Borrego, vice president, U.S. Client Services, spoke to industry participants at the October J.D. Power Automotive Marketing Roundtable in Las Vegas, NV. about the U.S. auto market’s recovery and the fundamentals in the market that are driving strong demand.

Highlights from her talk include analysis from the Power Information Network® (PIN) and J.D. Power’s strategic partner LMC Automotive:

• Retail sales to individual consumers in 2013 are expected to reach 12.8 million units which is back to pre-recession levels.

• The real story isn’t just about sales growth. It’s also about transaction price growth. We’ve seen exceptional performance with prices (consumer facing prices net incentives) increasing by about $3,000. Continue reading ›

J.D. Power Roundtable Speaker Defines “Connected Auto Consumers”

Arianne Walker

Arianne Walker

Today’s digital lifestyle has a growing impact on the auto industry. Understanding how consumers who are in the market for a vehicle are “using digital information and how they are connected,” was a key focus in speeches and discussions at the recent J.D. Power Automotive Marketing Roundtable at the Bellagio Hotel in Las Vegas, NV.

Arianne Walker, senior director of media and marketing solutions at J.D. Power, introduced the October conference with highlights of trends in automotive Internet usage based on J.D. Power research. She also spoke about the rise in digital media consumption and identified how different devices—smartphones and tablets—are being used to gather information mostly at home, but also on the go—smartphones are also used for auto shopping on the dealer lot. Walker also discussed trends in content with social media and video and how traditional companies are reformulating automotive content in new ways. Continue reading ›

Over Half of Gen Y Shoppers Who Use the Web are Open to Any Vehicle Brand

Arianne_Walker New

Arianne Walker

One-half of all new-vehicle buyers who use the Internet in their shopping process (AIUs) are open to considering any vehicle brand at the beginning of their research experience. In addition, that percentage is even higher (54%) among Gen Y AIUs, according to our 2013 New Autoshopper Study.*

We see that close to one-half (47%) of Gen Y AIUs use smartphones in their shopping process—the most of any age demographic, which indicates how important it is for brands and websites to put these younger buyers into their marketing equations. The share of new-vehicle buyers in Gen Y is increasing at the greatest rate among all buyers and is projected to comprise 23% of all 2013 retail sales.

Automakers have a terrific opportunity to influence younger buyers during their shopping process, which averages about four months, particularly since they are quite open to considering different brands as they begin their new-vehicle research. In addition, the digital presence of the brand through mobile advertising and by providing content across mobile-accessible sites may be a great way to reach Gen Y buyers, since we see almost half that use a smartphone during the shopping process. Continue reading ›

How Important is the Internet to Attracting New Vehicle Shoppers in the U.S.?

Tim_Dunne

Tim Dunne

With sales of new light vehicles in the United States continuing to rebound from the great recession years (light-vehicle sales are up 7% in the first trimester of 2013, after having increased 13% in 2012), one question that automotive marketers might be asking themselves is: How important is the Internet to attracting new-vehicle shoppers?

Based on J.D Power’s 2012 Sales Satisfaction Index (SSI) Study, four out of five new-vehicle buyers are Automotive Internet Users (AIUs)—people who use the Internet to shop for their new vehicle. By far, the most frequently accessed automotive content on websites and mobile apps are vehicle pricing information (64% of shoppers say they search for this information), and model information such as vehicle options, features and technical specifications (63% search for this information). Other popular uses in the online shopping experience include vehicle comparisons (48%), build-a-vehicle, and photo galleries (each 46%). Continue reading ›

Consumer Demographics and Preferences are Changing Radically

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John Humphrey

Significant changes in population and other demographics in the United States will affect the automotive industry in the years to come, according to John Humphrey, senior vice president of global automotive at J.D. Power and Associates, in remarks to participants at the recent J.D. Power 2013 International Automotive Roundtable in Orlando, FL, that was co-sponsored with NADA. Humphrey summarized a few of the major changes:

Between 2012 and 2020, the U.S. population will grow nearly 10%—from 313 million to 341 million. Most of this growth will occur in already large markets, with much movement from rural to urban areas. Currently, the most populous U.S. states are California, Texas, New York and Florida, and most of these will experience the most growth in the next decade. This growth trend will have a significant impact on what products OEMs offer in specific markets—in terms of utility, fuel economy, weather conditions—and the retailing strategies needed to attract and retain customers in these markets. Continue reading ›

Will Momentum in U.S. Auto Market Continue?

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John Humphrey

On balance, J.D. Power is optimistic about the auto market in the United States, John Humphrey, senior vice president, global automotive, told participants at the recent J.D. Power 2013 International Automotive Roundtable in Orlando, FL, that was co-sponsored with NADA. The industry is benefitting right now from an older fleet and pent-up demand that will continue to bolster the market for the next 3-4 years.

The rebound in the U.S. market is also being aided by a recovery in the housing sector, although this is still in its nascent state. Some risks to the U.S. recovery include the spread of fear due to the Euro debt crisis—whether real or psychological—and whether the United States has truly resolved its own fiscal crisis, or merely delayed it. In addition, geo-political risks in the Middle East, East Asia and North Africa need to be monitored. Continue reading ›

Western Auto Conference Panel Talks about Mobility—Now and in the Future

Auto industry panelists discuss mobility with Joe White, senior editor, The Wall Street Journal (right) at the NADA/J.D. Power Western Automotive conference.

Auto industry panelists discuss mobility with Joe White, senior editor, The Wall Street Journal (right) at the NADA/J.D. Power Western Automotive conference.

Mobility is a term that has been gaining attention in the auto industry. The current focus is on the viability of alternative vehicles—especially electric vehicles (EVs)—and the future focus explores mobility technology including smarter, semi-self-driving vehicles. Joe White, senior editor at The all Street Journal, led a panel discussion with auto executives and a California dealer principal at the NADA/J.D. Power Western Automotive Conference with an objective to look at mobility and to separate reality from fantasy.

Moderator: Joe White, senior editor, The Wall Street Journal

Panel members:

Al Castignetti, vice president and general manager, Nissan Division, Nissan North America, Inc.

Mark Del Rosso, COO, Audi of America Inc.

John Mendel, Executive Vice President, American Honda Motor Co., Inc.

Peter Hoffman, Dealer Principal, Sierra Autocars, Inc.*

*Sierra Autocars, Inc. is s a family-owned dealer group based in California’s San Gabriel Valley, and includes seven stores and 10 franchises: Acura, Chevrolet, Chrysler, Dodge, Fiat, Honda, Jeep, Mazda, Ram and Subaru.

Panelists’ comments on the need to have a balanced portfolio that includes fuel-efficient vehicles, including those with alternative powertrains, and their ideas about consumer interest in EVs, alternative powertrains and semi-self-driving cars are excerpted.

Joe: Let’s start with the here and now. By 2025 the auto industry’s fleets have to average 54.5 mpg—you are not waiting until 2024 to start this process. How are customers receiving the technology and the engineering ideas that you are putting into the marketplace to move toward that goal?

Al: No car manufacturer is going to get to 54.5 mpg without alternative fuel vehicles—whether it’s electric, fuel cell, or whether it’s natural gas. Nissan is heavily involved in the electric vehicle (EV) and that is one of the platforms moving forward that is going to have a big presence in the auto industry. I would say that from an electric perspective for us, our customers love it. The one limit right now is the range. As the technology expands, and you get greater range from the same power packs, I think it will open up a tremendous audience that isn’t there today. Continue reading ›

Automakers Ready to Turn Attention to the Future after Strong Finish in 2012

 

Tim Dunne

Tim Dunne

J.D. Power Asia expert Tim Dunne provides a perspective for members of the auto industry, especially automakers in Japan, on the U.S. market and offers a glimpse at issues and concerns and changes that are likely to impact the world’s manufacturers in the future. Excerpts from an article published recently in Japan’s Automotive Daily Nikkan Jidosha Shimbun are featured in this post.

As 2012 draws to a close, light-vehicle sales in the United States are expected to finish the year strongly. Vehicle manufacturers estimate total sales will top 14.4 million units for the year, which translates to a healthy 14% increase vs. 2011’s total of 12.7 million units. The 14.4 million-unit total would be the highest annual sales in the United States since the industry reached 16.1 million units in 2007, and represents nearly a 40% increase over 2008, when industry sales tumbled to an anemic 10.4 million units at the lowest point of the recent “Great Recession” (December 2007–June 2009, according to the National Bureau of Economic Research).

For many Japanese brands operating in the United States, 2012’s final results will be even better than the industry average. Sales of Toyota Group vehicles (Toyota, Lexus and Scion brands) are currently up a combined 29%, and are on track to reach 2.05 million vehicles for the year; Honda Group sales (Honda and Acura brands) are currently up 24%, and are expected to top 1.4 million units for the year; Subaru sales are up 29%, and are expected to top 330,000 units for the year. Continue reading ›

Western Auto Conference: Focus on Change, Trends, Demographics, Social Media

The outlook for the auto industry—and the U.S. economy—appears to be much healthier, though the industry is still recovering from the downturn that began in 2008, according to Paul Sheard, chief global economist at Standard & Poor’s in New York and John Humphrey, executive vice president, who heads the global automotive division at J.D. Power and Associates.

Both of these experts, in addition to Jim Lentz, president and CEO of Toyota Motor Sales U.S.A, and other auto company executives, Internet and social media marketers, and dealers, presented their observations and perspectives about change in the industry, both now and in the future, at last week’s NADA/J.D. Power Western Automotive Conference held in Los Angeles.

Humphrey also offered a West Coast or California perspective. He and other speakers and panels spoke about the differences in consumer demographics and new ways to understand and engage the customer through social media—especially with the objective of how to appeal to 80 million+ millennial consumers. The conference began with welcoming remarks from Bill Underriner, chairman of NADA, and ended with a panel discussion dealing with the idea of “mobility” in the future that was led by Joe White, senior editor from The Wall Street Journal. Continue reading ›