In recent years, Cadillac has gone on record that they want to attract buyers who are both younger and richer than their typical demographic. In general, older buyers tend to prefer this brand, but that may not always be a bad thing because older buyers tend to have more discretionary money to spend.
The average age of a Cadillac buyer is 59, which is the oldest average age amongst the top 4 luxury automotive brands.
The effort to get younger within their target demographics has been working for Cadillac since 2010. Almost half of brand buyers were younger than the age of 56, allowing Cadillac to see the most growth in young buyers when compared to other luxury brands like Audi and Lexus.
Once People Experience Cadillac, They Don’t Look Back
- An average of 60% of Cadillac customers will turn in their older model vehicle to purchase a brand new one of the same brand, ranking Cadillac second only behind General Motors.
- The average amount paid for a Cadillac is above $46,000 consistently on an annual basis.
- 1 in 3 people who purchase redesigned models that are intended to appeal to younger buyers is above the age of 65.
- 60% who purchase the Cadillac XTS are 65 or older.
For Cadillac, the issue is one more of relevance than anything else. The brand has redesigned several models to make them be more appealing to younger audiences, including the CTS, but the primary buyer continues to be older men. These customers also tend to still have lower income levels than the older men who prefer German luxury brands. This means Cadillac is reaching a critical state: their customers are loyal, but they are aging. Pretty soon they’ll need to find new demographics because their primary customer base will no longer be around.
Could Older Buyers Be a Poor Demographic for Cadillac?
- 46% of US workers who are in the primary purchasing demographic for Cadillac have saved less than $10,000 for retirement. 1 in 4 haven’t even saved $1,000.
- 1 in 6 US citizens in the Cadillac primary purchasing demographic is living below the federal poverty line.
- Medical costs for the primary purchasing demographic are expected to increase at an annual rate of 5%, which will soon be a $1 trillion cost to the economy.
- Only 1 in 10 Americans is actually in the 65+ age demographic today, which means Cadillac is missing out on a large portion of the population.
- US bankruptcy filings in the 65-74 age demographic increased 178% from 1991-2007.
- Only 23% of Baby Boomers expect to retire by the time they reach the age of 65. 3 out of 4 workers expect to be working even after they officially retire.
- 40% of Baby Boomers say they don’t even plan on retiring, opting to stay in the workforce until they are forced to leave it.
The primary buyers of the Cadillac brand might have the most discretionary money available to them, but that doesn’t mean much when there is such a struggle to save. If the 65+ age demographic must keep working just to pay for healthcare or basic needs, then there isn’t much of a chance that they’re going to be able to afford a new Cadillac any time soon. From a younger standpoint, the brand may also be appealing… but again, young workers don’t tend to have high paying jobs, which means a Cadillac is out of their price range.
Who Must Cadillac Target to Begin to Change?
- 72% of US workers with at least a bachelor’s degree are working full-time, compared with 62% of workers with a high school diploma or GED in the 25-34 age demographic.
- In 2013 median earnings for young adults with a bachelor’s degree were $48,500, compared with $23,900 for those without a high school credential.
- The average salary of a 25-34 worker with a master’s degree was $59,600.
- The pattern of higher earnings based on educational levels applies across all gender and racial or ethnic groups.
For Cadillac to change their demographic profile, they must do two things: lower the cost of a vehicle so that it isn’t equal to a full year’s wages and target those who have a graduate degree. If they can do this and continue to emphasize their brand loyalty, then they’ll be able to continue the trends they have been seeing with younger buyers. As Baby Boomers continue to retire and seek to put money away, only the younger buyers are going to be looking at this brand as an investment. If they can accomplish that perspective, then they could potentially dominate the luxury niche within the next decade.
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