How Volkswagen Accidentally Helped The Boomers Revolutionalize The Luxury Car Market

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Socio-cultural imprinting

This summer will be a busy one for nostalgiaholics as the 50 year anniversaries of first Moon Landing and Woodstock dominate the media calendar. Brace yourselves for the anecdotes, fading memories and, inevitably, parables packaged for our own time lurking just around the clickbait corner. 

However, the true societal impact of those events will continue to operate deep beneath the surface – hidden connections, catalysts and culture shifts that, after 50 years of evolution, still drive perceptions and predetermine outcomes today.

It’s imprinting – actually socio-cultural imprinting – in action.

Konrad Lorenz _ GeeseYou remember imprinting from Psych 101, right? Of course you do. Back in the 1950s Dr. Konrad Lorentz found that at critical points in the development of young animals and birds, lifelong perceptions and behaviors can be embedded – imprinted – rapidly and at a sub-conscious level. To demonstrate the theory, he imprinted himself as “mom” on baby geese.

It turns out that humans are just as smart as geese – we are also subject to imprinting events that condition our perceptions and decision-making years, even decades later.

Socio-cultural imprinting drives brand destiny

There is another seminal anniversary in 2019, one that triggered change if not on a Lunar Landing scale, certainly as momentous as the muddy happenings at Woodstock. In 1989 Lexus previewed its shiny new 1990 LS400 model at the Los Angeles Auto Show, debuting Toyota’s entry to the luxury car market.

American status ruled in 1990, the first full year of Lexus availability: Cadillac sold over a quarter million units and Lincoln had its best year ever at 232,000. Together, they took 75% of the luxury category;  Euro-marques shared the rest.

Perhaps understandably, Silent Generation elites (born ≅ 1925-1945), acting on the imprinting of their own era, dismissed the idea of Japanese “luxury” cars. Outré, dahling, simply outré!

Boomers (b. 1946-1964) then in their 20s, 30s and early 40s, had grown up hearing the Cadillac of such and such meant the product is unquestionably the best in its class. But they had also been imprinted by competing memes that overlaid embedded warmth for Cadillac.

As a result, their Millennial children (b. 1982-2000) would come to see Lexus as a high status symbol of success, quiet good taste, technological refinement and intelligence.

Far from the mid-century respect it once enjoyed, Millennials today see Cadillac, not Lexus, as outré, dahling. Okay, maybe not outré – more like who dis?

Its image now centers on nostalgia, retirees cruising supermarket parking lots in search of a handicapped space, yeehah buy American good ‘ol boys and gals in flyover country and macho SUV blingsters.

Not exactly the sort with whom one would wish to mingle over an avocado toast brunch on Rodeo Drive or in Brooklyn Heights.

Credit imprinting, the hidden dynamics that drive brand destinies in unseen ways.

In the automobile universe these imprinting forces were set in motion long, long ago in a galaxy far, far away where Cadillac was king and Volkswagen was cool. Yes, that long ago, that far away.

No, this isn’t a “back in the good old days” amble down memory lane – it’s about leveraging long-buried mechanisms to grab premium brand market share in the 2020s. The curious and the creative should read on; the comfortable and the conventional should probably head back to TMZ.

Imprinted by Volkswagen’s intelligence, Boomers chose Toyota instead

Volkswagen’s lasting gift to the auto industry was to establish intelligence as a buyer rationale. As VW aged, it would forget this inner truth and come to believe that personality would carry it through forever. It would not the only brand to cling to style over substance long after relying on overt imagery was past its sell date.

Despite its early Boomer hippie stereotype, the brand’s success was actually due to the Silent Generation  (born ≅1925-1945). In 1970, typical Volkswagen buyer were suburban mid-30s family people not campus radicals; most Boomers first rode in a VW van driven by a June Cleaver mom not Chastity Moonbeam.

At the time of Woodstock (1969) two-thirds of Boomer Nation was still in high school, elementary school or kindergarten. Barbies, bikes and bubble gum were top-of-mind, not peace signs, protests and pot.

Relatively few Boomers bought new Volkswagens, but millions owned used ones as starter cars or hand-me-downs – reliable, affordable, cheap on gas: an intelligent choice. Being stand-out funky was a plus: we were, like, totally down with don’t follow the herd.

Volkswagen’s problem was that by 1970, its peak sales year, it was part of the herd.

Other reliable, affordablecheap on gas, funky options had moved in, beginning out in La La Land where most happenings were considered too wacky for prime time, Japanese brands had capitalized on the herd’s over-confidence.

They added styling, amenities, performance and, especially, choice/variety to Vee-dub’s familiar intelligence promise.

And they had learned much from DDB’s groundbreaking direct, no-nonsense ad layouts.

VW’s niche was usurped: intelligence was no longer a USP but the price of entry to new car shopping lists. By 1975 Toyota overtook Volkswagen as America’s #1 import brand, and never looked back.

Meanwhile, VW badly misjudged evolving consumer dynamics; clinging to the old pop culture myth that it was all about fun-and-trendy youth, it almost chuckled itself out of the US market. Sales crashed by 90% from the 1970 peak when, in 1993, management realized Americans had stopped laughing.

Boomers moved on. Other brands would reap the benefits of the brand’s imprinted imperative: buy intelligently.

Turning to the global market, VW would now struggle to gauge the hidden dynamics of the American consumer, embarking on a rollercoaster sales ride that continues today.

Intelligence: an imprinted generational imperative

1959 Cadillac Eldorado USPS stamp artThe 1959 Eldorado, the pinnacle of Caddy cool, tells us everything we need to know about why Americans so sure the Cadillac of whatever was simply the best.

When Lexus arrived in 1990, Cadillac and Lincoln ruled, confident and unaware they were on a slippery slope.

The times they weren’t just a-changing, they had changed. The culture had changed too. Boomers had embraced new touchstones on their way to premium car world.

Cadillac and Lincoln continued to cozy up to the country club set but European marques stressed engineering, technology and form follows function.  For young prospects steeped in new ideas – from Apple, Nintendo, Air Jordan and Frequent Flyer miles to health foods and co-ed gyms – their intelligent appeals hit home.

The World Turned Upside Down

While the Europeans reshaped Boomer aspirations, external events disrupted the destinies of domestic brands in the 1970s/80s. Pressured to downsize by fuel supply crises, environmentalism and new regulations, Detroit made hasty decisions that compromised quality and respect.

Cadillac and Lincoln were no exception.

Patriotic parents and the Big Three old guard grumbled, but by 1990 Boomer yuppies were defecting in droves to Mercedes, BMW, Porsche and near-luxury siblings Acura, Audi, Volvo and Saab in search of wheels with suave foreign accents.

Lexus gave them another reason to broaden their vocabulary. Intelligently introduced via direct, expository advertising – its TV spot showing a champagne glass pyramid on the hood of an an idling LS400 is still a classic – the brand quickly won a place on premium shopping lists.

Critics who said the work was unimaginative were soon chastened, reminded that it’s not creative unless it sells.

Downsizing product / downsizing cachet

Shortcutting its way to downsizing in the 1980s/90s, Cadillac T-boned its street cred in back-to-back wrecks involving Cimarron (a re-badged Chevy Nova) and Catera (a re-badged Opel) The Caddy That Zigs.

Catera also managed to alienate a share of women with its overly-sexy Cindy Crawford kickoff campaign. In 1996, as today, what resonates in adland is not always a good fit with hidden generational sensibilities

Boomers cringed and bought even more cars from brands that respected our intelligent self-image.

Fast forward: Lexus is now  the #3 in luxury category sales (296,310) in 2018, close behind #2 BMW and far ahead of Cadillac (154,702) and Lincoln (103,587).

Even more painful for the one-time American dream machines, upstart Tesla is now the top-selling domestic premium brand. EVs? Now that’s intelligent!

Mad Men myths: hazardous to brand health

Buyers aged 50+ buy over half of the new vehicles sold in America. In fact, in 2018, they bought about as many as did Germany plus the UK plus France.

That’s right 7.9 million new vehicles were bought last year by Americans 50 and above, about the same number as German, French and British buyers combined (8 million).

It’s hardly surprising: average new vehicle prices run north of $35,000 and the cohort, mostly Boomers/Gen Xers, controls 80% of US household assets.

However, we rarely show up in advertising. The rationales excuses go back to the swingin’ sixties when chain smoking Mad Men forced a fixed focus on the 18-49 demo because, allegedly, consumers over fifty …

  • Create an “old brand” stigma that scares young buyers away
  • Are easy to reach via traditional media and “age-agnostic” messaging
  • No longer adapt: behaviors/loyalties are fixed and cannot be switched

Such fallacies are costly across all categories. In the premium brand segment at least 1.2 million autos were purchased in 2018 by people in AARP territory, with minimal advertiser hustle for their business.

Caged by convention and Boomers hurt us bias, most brands choose to go with the Madison Avenue flow. For Cadillac, the flow seemed in danger of becoming a trickle after misjudging the power of Millennials, currently around 10-15% of the market, to change its fortunes.

Relaunching Cadillac: Daring Greatly

Already pegged as for “old” people, Cadillac was geezer-shy to the max when it decided to relaunch via an edgy new advertising campaign in 2015.

The Big Idea: create a timeless yet progressive elite persona by aligning with the cultural taste-leadership of New York City. To open the ball, the brand relocated its HQ from gritty Detroit to Manhattan.

Its campaign theme, Dare Greatly, was taken from a speech by President Theodore Roosevelt, a New Yorker who combined cowboy, cavalry Rough Rider and trust-busting machismo with Harvard-educated polish, social status and robust progressiveness.

Terrified of appearing to court creepy oldsters, Cadillac hedged its bet on Gilded Age imagery with a VW-style fixation on trendy youth – metro-hip Millennials. Not exactly TR’s inner cowboy cuppa Joe. Oh well.

Favoring atmospherics over product specifics, Dare Greatly showcased the arts, design, dance, tech and intense 30-somethings who, clad in de rigueur grayscale, strode through iconic – but chilly – Manhattan milieus, far too hip to engage the Caddy cruising by. And, perhaps, way too cool to want any car in the era of Uber and Lyft.

Apart from implied resonance with young elites, the campaign gave prospects few reasons to engage Caddy either.

Unaware how VW had long ago accidentally predestined intelligence as the price of entry to the premium category, Cadillac signaled throwback style over substance instead.

Sales fell by 10% from 2015 to 2018. New management packed up the headquarters, called United Van Lines, brought Caddy home to Motor City and is now in a gracious, face-saving reboot mode.

Recap: generational imprinting is the key to brand destiny

Despite their many missteps, both Cadillac and Volkswagen have a head start on regeneration in the 50+ space. Warm feelings, embedded when Herbie The Love Bug was everywhere and Cadillac was still The Cadillac of The Industry, can still provide the basis for reconciliation. Imprinting still drives brand destiny.

All this is not to single out Caddy and Veedub: brands in every category where Boomers and older Gen Xers dominate spending – autos, tech, CPGs, travel, financial services, personal care, whatever – can grab share from status quo competitors by triggering generational imprinting.

But it isn’t easy, especially for outsiders. One cannot Google or Big Data ones way to Boomer / neXt world, and purchasing departments cannot open low-bid doors.

For brands that truly dare greatly, Boomer / neXt seminars and insider consulting are just a click away. We don’t just know that world and speak its dialects, we live there.

 

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