Shifting [Generational] Gears
Nathan Shipley, Executive Director, Industry Analyst ;
The automotive aftermarket will see a complete transformation of its core consumer over the next 10 years. Millennials, who have now surpassed Baby Boomers as the largest living generation in the United States, are entering their peak driving years as their predecessors are actively retiring and changing their driving behavior. Statistics from the Federal Highway Administration show that 20-34 year olds today, on average, drive twice as much compared to drivers over 65-years old.
Millennials have a very different relationship with the aftermarket compared to their older counterparts. NPD’s 2017 Consumer Outlook Survey found that younger Millennials are most likely to be driving the oldest cars on the road, and are 50 percent more likely to have purchased their vehicle used. Younger millennials (ages 18-24) drive cars with an average age of 10 years, and are expecting to spend over $2,000 on repairs in 2017, which is double the average. These Millennials are also more likely to be do-it-yourself (DIY) or switchers (some DIY and do-it-for-me/DIFM) when it comes to vehicle maintenance and repairs, which is certainly positive news for the aftermarket. Older Millennials (ages 25-34), on the other hand, are twice as likely to have leased their vehicle.
We all know that Millennials are also online – a lot. When considering where to go for researching products online, they significantly over-index in terms of retailer websites, online retailers, and search engines. They are also more likely to seek out online auto deals through social media. You can find out more about the aftermarket’s e-commerce penetration by reading NPD’s recent news release here.
With a changing consumer base, automotive aftermarket players must reevaluate who their primary customer is today. Millennials approach researching, repairs, and buying vehicle products differently. Shopping online is second nature, and the fast-paced world they’ve become accustomed to means they seek instant gratification. Millennials are also ripe for aftermarket development; they lack the same level of vehicle experience as their older counterparts and so, there are not only promotional but also educational opportunities that exist with this demographic.