Week 6 of 8 – The next Decade in Transportation
December 9, 2019
Are companies prepared to evolve their luxury transportation and mobility solutions to a new and growing wealthy millennial audience? It’s estimated that by 2030 the world’s richest individuals are poised to transfer $15.4 Trillion to the next generation, mostly millennials. Bain & Company predicts that 50% of all luxury sales will come from Millennials and Generation Z by 2025. These facts coupled with forecasted growth in wealth disparity are strong reasons to ask if your business understands a growing and evolving luxury goods marketplace. Millennial luxury tastes are vastly different than traditional luxury consumers. For example, experience, social media validation and wellness are critically important to younger buyers. This new generation of buyers will no doubt demand their own experience in luxury mobility offerings. This blog explores how companies can engage wealthy millennials transportation needs through connection, personalization, and social responsibility.
Does your business understand millennial behaviors beyond their demographics? Do you believe that behaviors of luxury consumers are important to your business model in the next decade? Wealthy millennials have a pattern of choosing companies that disrupt traditional industries. This is also true for the products and services they engage with. Beyond disruption, millennials are attracted to experience and displaying that experience through social media. Real world examples can be seen in the fashion industry. New fashion brands like Yeezy and Supreme are taking space from traditional companies as they understand their target audience and disrupt existing players. Gucci is an example of an existing brand that disrupted itself to succeed with younger buyers. They are expanding their presence with millennials by embracing technology, using social media influencers, ensuring their products are on target by hiring top designers and giving those designers freedom to make change. Start up and existing luxury transportation / mobility companies can learn from what has occurred in the faster pace fashion industry. Existing car brands are exposed to disruption from new mobility entrants with an aim to attract millennials. For example, if the existing marketplace loves Ferrari, younger buyers may look to a Ferrari disruptor. In this scenario, should Ferrari disrupt itself the way Gucci has?
Automotive sales have traditionally been a push model in the U.S. Successful luxury car companies have a foundation built around intelligent logistical distribution models that predict within reasonable accuracy what their customers demand. This works best when the customer shops for the vehicle in person. Let’s contrast the “push” model with a potential “pull” model in the next decade around personalization. Wealthy millennials have a track record of placing personalized orders online. Will the new luxury mobility model follow suit? If so, there is a potential strong advantage to companies who allow customer orders directly from a manufacturer or service provider coupled with exclusive delivery experience. Start-up brands could see this as an advantage while setting up sales and distribution networks. Existing car companies and their dealer networks who embrace change have opportunity to create an exceptional personalization and delivery experience that wealthy millennials crave. Questions remain if car companies and their dealers can work together or if a power struggle will ensue.
New forms of transportation require extensive manufacturing and distribution processes that require massive amounts of metal, fossil fuels and plastics. New brands, like Tesla, don’t hide this, but differentiate themselves from existing brands. Tesla customers feel like their purchase decision puts them on the right side of history. Does this mean that helping wealthy millennials make a statement is an advantage? I believe yes for a specific audience. Social responsibility is a different kind of disruption, almost more of a movement, where choices younger buyers make reflect the tribe they ascribe to. Authentic leaders will help millennials define themselves with their products in a socially responsible way as part of profitable business models. Do you believe that this is a market advantage?
Wealthy baby boomers made a statement purchasing European cars like Mercedes, BMW, Porsche and Jaguar in the 70’s, 80’s and 90’s. These consumers made a lifelong choice that defined them and for the most part they remained loyal to European products. US car companies never re-gained share of luxury baby boomer consumers throughout their buying lifecycle. I believe wealthy millennials will define themselves in the next decade through expression, experience and differentiation. Successful luxury companies always do bold things, embrace change and take risks. If history repeats itself, the next decade is the right time for your business to define itself, gain trust, and enjoy a massive lifelong relationship with wealthy millennials.
I’m truly grateful that you took time to read this blog. I absolutely look forward to hearing your thoughts and questions! Please take time to follow me through twitter and WordPress.
Next week will look at Product Differentiators – What makes a vehicle stand-out in the next decade?
Leader in Automotive, Tech and Digital Data.
I’m incredibly excited about the intersection of Auto, Data/Tech and Artificial Intelligence in the next 10 years. I believe agile organizations with authentic leaders have set the blueprint of how companies will operate in the next decade.
My life balance is God, Family, Career. I love spending time with my wife and kids. Health, exercise and wellness are integral to my life. I love reading anything about new technologies, motivation, growth and philosophy.
I have a life plan to live to 100 years of age. Everything I aim to achieve has purpose to leave a fun, rich and positive legacy for my family and friends. Not sure what will happen after that, but can’t wait to find out!