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Robert Karbaum

Robert Karbaum National Digital Strategy Manager

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What the Auto Industry can learn from IKEA

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IKEA has announced a new limited edition PS (Post Scriptum) 2014 line designed for the new urban hipster. This new line was derived from an IKEA-commissioned market study that identified 1 in 5 of urban dwellers now live in a space smaller than 323 square feet. The collection is also designed around the "on the move" principal, which allows for all each piece of the 51-strong collection to be easily transported.

"We were thinking about the needs of the young urban generations that often forgo space to follow their dreams in the big cities," said Gemma Arranz, interior design manager for Ikea UK and Ireland.[i]

Why this is important for us is that the collection is designed to be transported by foot, bike or public transit and not by vehicle.

This concept speaks to the millennial data we have been listening to for years but never paid much attention to. After all, worrying about the next generation of buyers is a distraction from hitting this month’s sales target, right?

As a millennial myself (very top-end) I can confirm that we are on the move, but in line with IKEA's new collection, we are too broke to move out of our rented basement apartments. In fact, looking around my close circle of friends, I can count on one hand how many of us own our own vehicle. None of them were purchased new, and almost all are over 6 years old. What is more alarming is that less than 60 percent of my fellow urbanites have a driver’s license, let alone their own set of wheels.

Now, to be fair I do live in downtown Toronto, where even our flawed public transit system can handle the majority of day-to-day transportation. However, it doesn't change the fact that is just over the horizon: millennials will be a challenge sooner than later.

IKEA is heading down the millennial road right now, other major brands and industries are soon to follow. What are we doing as an industry to compete? Just look at the commercial they released to promote this new line. Notice anything missing?

 

 

[i] Dezeen Magazine, 2014 - http://www.dezeen.com/2014/03/13/ikea-reveals-space-saving-ps-2014-furniture-collection/

 

Droppin' Baums

 

 

 

 

 

 

 

Robert Karbaum arguably has the best name in the automotive industry. His combined experience over the past decade in E-Commerce and the automotive industry has allowed him to master the art of “AutoSpeak”; the ancient language that bridges the gap between internet geeks, the showroom floor and everything in-between. He manages the E-Commerce, Social and Digital Marketing operations at Weins Canada Inc. (formerly Don Valley North Automotive Group); a prestigious automotive group in Canada which includes the #1 volume Toyota and Lexus dealerships in the country. 

Catch him on Twitter (@karbaum) or DroppinBaums.com.

Jim Bell
I think that the manufactures are trying to market to the millennials with all of the newer technology Will it be enough to win them over? Probably not, but they are trying. Recently while I was traveling, I saw a millennial at the gate. He had his computer by his side. It was a Mac Pro. The funny thing about it was that it was covers with bumper stickers. My colleague made a point that the Mac was probably as much as a cheaper car and that IS his car.
Robert Karbaum
Haha. That's a fantastic analogy Jim. I've seen stickers on a laptop, but not "bumper" stickers.
Scott Nelson
Good stuff Robert. Very thought provoking. The Auto Industry should certainly take note and it makes me wonder what the key strategies should be when marketing to millennials who considering a car purchase?
Robert Karbaum
I believe automotive manufacturers are focused on the wrong selling points when it comes to millennials. They believe that adding gadgetry, style, and grass roots marketing will bring in the gen-y buyers. Truth is, the technology in an automobile will always be at least a step behind the tech world. It would be impossible to integrate something that wasn't already in a phone, tablet, wearable, etc. What they need to focus on is the #1 objection when it comes to millennials: they just cant afford a new vehicle. They would be better off focusing on ride-share's and time-share vehicle purchasing. There is a great article about it here:http://riotwire.com/column/why-should-you-care-about-gen-ys-underemployment-and-lack-of-income/ "Well, let's make a monthly budget for a young Toronto couple on minimum wage and see how likely it is they can put money into the economy (using Toronto's costs of living, the CAA, Stats Canada, and some previously mentioned sources): Income A: $1624 Income B: $1624 Income = $3248.00 Rent (outside city centre): $1000.00 Cell phone (x2 people): $100.00 Internet: $50.00 Car payment: $170 Car insurance: $125.00 Gas: $128 Groceries: $300 Debt repayment (based on 2 people with average student debt to OSAP): $548 Basic expenses = $2421.00 That leaves our hypothetical couple with only $827 per month for entertainment, savings, medical expenses & medication, clothing, emergency funds, and any other "non essential" expenses. No wonder we aren't buying cars..."

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