March 12, 2007 – Adapting your business to the new generation

INDIANAPOLIS — How much influence powersports companies have over a new, and much different, generation of American consumers could depend on how the industry handles this group’s key values.
Tim Benner, vice president and general manager of GfK Roper Consulting, discussed some of those values as part of the Motorcycle Industry Council’s annual meeting at the Dealer Expo.
In his presentation, Benner identified three themes about this new generation of American consumers that will be prevalent in 2007 and beyond.
An Emerging Identity
With a renewed focus on family and relationships, and a desire to find more joy in life, Americans are searching for — and finding — an emerging sense of identity. Benner says this idea of empowerment has led consumers to lean toward the idea of personalization and customization, something companies are beginning to market toward.
“When we talk to consumers across the demographic spectrum, it’s less about defining myself by what I drive or the clothes I wear,” he said. “Consumers are telling us that they have such a keen sense of themselves and who they are and where they’re going that they don’t need that stuff as much maybe they did in the past. A lot of companies are jumping on this trend by celebrating authenticity in their ad campaigns.
“On the powersports side, and you see this all over the show floor at Dealer Expo, more aftermarket companies are starting to cater to a consumer’s sense of individuality, and now is the time to start sending those types of messages if you haven’t already started.”
Another important aspect of the individuality trend is design, and how important it is to the Generation Y sector.
“Design is more important now than it ever has been,” Benner said. “It’s not just about big-ticket items, either, it’s filtered down to such items as hand soap, for example. People today are more willing to go out of their way and even pay more to find a design that suits them. They feel that good design is a reflection of good quality. What’s interesting is that the Generation Y sector is leading this charge for more aggressive, progressive design. They are more acutely familiar with good design than ever before.”
Another design trend becoming prevalent among consumers is that although simplicity rules, people today are more fun oriented than ever, and they want designs that are less serious but fun to look at. Finally, Benner says consumers feel the “experience” with the design is critical, meaning they want to emotionally connect with it.
Benner insists this concept of individuality is here to stay, mainly because it’s the Generation Y sector that’s leading the charge, and in five years they will be the ones with the financial capability to really influence changes in the market.
“This trend is most pronounced among 12-16-year-olds,” Benner said, “which means these themes of customization and personalization aren’t going to slow down. In fact, they will grow even faster. These days it’s not about giving people 800 choices, instead it’s about pulling them into the process and letting them personalize it on their own terms.”
Evolving Community
Feeling that much of what happens in the outside world is beyond their control, Benner says Americans are embracing what is within their control, leading to an evolving sense of community.
“Like never before consumers are becoming involved in groups,” Benner said. “They want to feel a sense of community, they want to get involved and experience life as a group. Many of them see this ‘engagement’ in community as the best way to fix many of society’s problems. A key point is what drives sales in this category is by word of mouth, which starts at the community level. There are a number of retailers, like Starbucks, that are trying to adopt this community theme in their stores. They provide their customers with a ‘sense of place’ where they can socialize with each other, and it provides them with an extension of their community.”
Benner says a good model of a powersports company benefiting from this new-found sense of community is Harley-Davidson.
“They’re a great example in the powersports industry of a company that is providing communities (platforms) for dialogue,” he said. “Their group rides, for example, give consumers the ability to expand their riding community, to develop closer connections with each other and their passion and to share their riding stories. As a marketer, you need to be a catalyst for this need for the consumer-led community. Get involved at the local levels, be a part of the local fabric and be visible within it. Offer a unique and compelling brand/product experience to your consumer. Give them something to talk about so they have the opportunity to become advocates for your product or service.”
The American Awakening
Another key trend, Benner said, is Americans’ desire to get more involved, specifically in their connection to the retail market. This movement has been fueled by a lack of trust and feelings of disconnect with the government and large corporations, increased concern about the environment, as well as a growing awareness of America’s image abroad.
“Americans are saying, ‘While I’m OK, I don’t like what I see around me,’” Benner said. “Whether it be the government, foreign affairs, crime, etc. The result is that people are pulling back to the community level, and they’re getting more involved now than in the 30 years we’ve been tracking these trends. For example, among Generation Y there’s more concern that the environment really is a problem.”
Consumers also are making an effort to support socially responsible companies in order to gain a level of trust with them, and Benner says companies need to recognize how important that’s becoming.
“Home Depot is a great example of a company that’s successfully placed themselves within the community and gained trust from consumers,” Benner said. “Many people don’t know that they give millions of dollars to organizations like Habitat for Humanity, but they also do it with very little fanfare, which has come across as much more authentic with consumers.”
Benner emphasizes that as the Generation Y sector becomes a larger part of the consumer market, it’s up to companies to adapt to stay on top of these emerging trends of personalization, community and involvement. psb