WHAT THE DATA SAY: 20% of young people willing to spend $1,000+ on a new car

By: Ray Day

CONTACT:

Ray Day
ray.day@stagwellglobal.com 

We wanted to share our latest consumer and business insights, based on research from Stagwell. Among the highlights of our weekly consumer sentiment tracking (fielded Mar. 31 – Apr. 2):

WORRIES ABOUT ECONOMY UP AGAIN

Today, 85% of Americans are concerned about the economy and inflation – up 2 points from last week and up from December’s 82% rate.

• 82% worry about U.S. crime rates (up 2 points)
• 81% about a potential U.S. recession (no change)
• 77% about political divisiveness (up 4 points)
• 72% about the War on Ukraine (down 2 points)
• 71% about affording my living expenses (up 3 points)
• 58% about a new COVID-19 variant (no change)
• 52% about losing their jobs (down 2 points)

YOUNG PEOPLE SPEND BIG ON CARS

Young people are spending as much as 20% of their budget on car expenses, and 25% of Americans who own a vehicle today worry that the price of fueling or charging will affect their ability to pay for other necessary goods or services. That’s according to our survey with NerdWallet.

• The average cost of car ownership in the U.S. rose 16% from 2019 to 2022, according to the U.S. Bureau of Transportation Statistics.
• Half of Americans (53%) say they plan to buy or lease a personal vehicle in the next 12 months. Of those potential buyers/leasers, 48% plan to buy/lease a used car, and 68% say they will buy/lease a new car – with some planning to buy/lease more than one vehicle.
• Overall, 43% of vehicle owners say $1,000 in monthly vehicle costs is too high.
• Yet 20% of Gen Z and 18% of Millennials are willing to spend more than $1,000 on a vehicle (compared with 6% for Gen X and 3% for Boomers).
• In actual spending, Gen Z and Millennial vehicle owners spend an average of $921 and $821 per month on their vehicles. Gen Xers spend $433 monthly, and Boomers spend $308.
• 35% of Gen Z vehicle owners say their vehicle expenses make up a significant portion of their monthly budgets.
• Parents also pay more for vehicles: Vehicle owners with children in their households spend an average of $792 per month, while those without kids spend an average of $430.

WOULD YOU BUY FROM THAT CHATBOT?

Five years ago, “conversational commerce” was the rage for online retail – with promises of widespread adoption of chatbots to place orders, resolve customer service issues and receive personalized product recommendations. Yet U.S. consumers resisted the idea, while at the same time wildly embracing generative AI. What does this mean for business? Stagwell’s National Research Group’s study on “Generative AI: A Lifeline for Conversational Commerce” takes a look at the future of digital shopping and key lessons for retailers.

• Fewer than half of Americans (47%) say they are willing to use conversational commerce to buy goods or services on social media platforms.
• Americans are most willing to buy products using conversational commerce on a social media platform from large retailers (50%), small retailers (43%) and sports brands (30%).
• The refusal of Americans to embrace conversational commerce is particularly stark when compared to the attitudes of Chinese shoppers. In China, more than 8 in 10 consumers are comfortable with the idea of buying from chatbots.
• At the same time, Americans are expressing a newfound openness to the idea of using AI-powered chat services. Among those who have heard of the concept of AI-powered search, for example, 71% say they’re excited to start using it.

ICYMI

In case you missed it, check out some of the thought-leadership and happenings around Stagwell making news:

• Employees Deeply Value Health and Well-Being
• Do cosmetics brands have personalities?
• Pharma’s reputation bucks downward trend and scales up driven by insulin price drops
• Stagwell’s AR platform signs Kansas City Royals to boost engagement for fans at games