One recent evening at a cavernous nightclub on Toronto’s waterfront, the sound system was pumping and the dance floor was bathed in purple light. At the centre of the room, surrounded by a throng of turned-out partygoers wasn’t a visiting Scandinavian DJ or a reality TV star, however, it was a pair of Mercedes-Benz A-Class hatchbacks.
As baby boomers enter their golden years and millennials approach their prime car-buying ones, the race is on to lure the avocado-toast generation into the driver’s seat. According to research by the California-based Kennedy Marketing Group, upwards of 29 per cent of new vehicles are purchased by millennials, with that number predicted to grow to 40 per cent by 2020.
Studies agree that these customers are a new breed, particularly when it comes to luxury. As a result automakers are now locked in a race to earn their dollars and the brand loyalty that comes with them.
"With this exciting entry in the compact class, we hope to welcome a new generation of Canadian drivers to the Mercedes-Benz family,” said Brian D. Fulton, president and chief executive, Mercedes-Benz Canada of the new A-Class. With an entry-level price of $36,000, sleek exterior styling and wraparound infotainment screen featuring “MBUX”, Mercedes-Benz’s new voice-activated user interface system, the A-Class is the brand’s first vehicle specifically targeted at the millennial generation.
“The A-Class is designed for a demographic that has become accustomed to constant connectivity and personalized experiences,” says Virginie Aubert, vice-president of marketing, Mercedes-Benz Canada. “MBUX, which debuts in the A-Class, brings those capabilities to personal mobility.” As such, the nightclub launch event, dubbed “Hey Mercedes! Set the Mood,” was designed to show off the car’s potential for personalization by cycling through audio-visual moods with titles such as “Up & At It” and “City Hustle.”
It is but the latest in a series of initiatives by the German luxury brand to attract new entry-level customers. “One territory we’ve explored a lot this year is music,” says Aubert, citing an ongoing partnership with event promoter Live Nation which positions Mercedes-Benz at live music events across the country. They’ve also partnered with up-and-coming Canadian musicians for a program called “Mercedes-Benz Garage Gigs,” in which musicians play exclusive underground concerts in residential garages. It’s hard to imagine your typical Benz buyer jamming out to some sweet underground tunes in someone’s garage, and that’s exactly the point.
Mercedes-Benz is far from the only automaker crafting its marketing strategy around the interests of younger customers. Such diverse brands as Toyota, Land Rover, Jeep and Maserati have all targeted millennials through paid, social-media influencer campaigns featuring the likes of fashion blogger Scott Schumann, pro surfer Courtney Conlogue and, in one case, an Instagram celebrity dog.
Cadillac’s ongoing attempts to endear itself with the young and upwardly mobile have yielded mixed results. In 2016 it relocated its head offices to Cadillac House, a flashy event space/showroom/coffee bar in New York’s SoHo neighbourhood, and earlier this year it unveiled the XT4, a compact crossover SUV with modern styling, ample connectivity and an aggressive $34,500 price tag. While Cadillac House was shuttered in the shakeup following the abrupt departure of chief executive Johan de Nysschen, the XT4 remains the brand’s great hope in shaking off its association with retirees.
Most notably in Cadillac’s push to win millennial hearts and minds is a new series of television and online ads for the XT4. While their colourful CGI birds and urban streetscapes are common fodder for car ads, the campaign’s cast of hip young multiethnic women, and its soundtrack, Bang Bang, by Jessie J featuring Ariana Grande and Nicki Minaj, sets a distinctively contemporary, female-positive tone.
“It’s something that shouldn’t stand out so much, having a non-white male protagonist in your advertising, but in 2018 I guess it’s still unusual,” says Cadillac Canada’s managing director, Hoss Hossani, noting that while males make up the majority of car buyers, it’s an increasingly small majority. “It’s certainly been registering with women since the ad’s been out there. I think we’re going to start seeing more of that.”
Cadillac is also reaching out to women through campaigns such as What Drives Her, a program in which female millennial entrepreneurs from across Canada were provided with a vehicle and access to the Cadillac Canada team to provide mentorship for their businesses.
“Every car company is always pursuing a younger customer regardless of the year or generation,” Hossani says, while acknowledging that this new cohort of buyers sees the act of buying anything, from a car to a vacation, differently than their parents did. “For us, luxury today is not just about the tangibles,” he says. “It’s about the freedom that more time gives you, how you can spend money on your experiences that help shape your life and help shape your persona on social media.”
In this way millennials represent not just a new customer base for luxury car companies, but a new kind of audience altogether, one driven by ephemeral things like experience and mood. As this generation starts settling down, having kids and spending real money, the spoils will go to the carmaker who best translates these into a vehicle.
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