Does personalization affect accessory sales?
- After 11 years of declining sales, Coke increased profits. How?
- 75% of drivers who buy accessories want to buy from a dealership.
One key challenge all dealers face is how to connect with today’s consumer. Consumers are all about personalization. In fact, think about your family’s phones. Do you all have the same phone case? Probably not. Today’s consumers are not going to settle for what you think they want in a vehicle. They want to personalize it themselves, just like everything else. They’ll demand personalization in one of the largest purchases they’ll make in their lives.
This is easier said than done of course. Personalization is hard.
But let’s consider what Coca-Cola did. With changing consumers and the movement towards “healthy” drinks, Coke changed the soft drink industry. After 11 years of declining sales, Coke was able to increase profits 2.5%. How? They didn’t change the product at all…they did it through personalization. Coke ran a campaign titled, “Share a Coke.” The company labeled over six million bottles with 250 of the most popular first names for teens and Millennials. Did you get a bottle with your name on it? People are still actively searching on eBay and Amazon for bottles. I’ve seen them upwards of $12 per bottle!
This campaign was so successful it has become a tenant for their entire brand. They launched a line of Diet Coke bottles with uniquely decorated labels – no two bottles were the same – and Sprite launched a line with music lyrics. What are you doing to offer that level of personalization?
Most drivers personalize their vehicle with accessories within the first three months of the purchase, according to the Specialty Equipment Market Association (SEMA). In fact, around half of new vehicle buyers purchase some sort of accessory for their vehicle. But according to the 2018 Auto Accessories Trend Report, dealers are only capturing 10% of the accessory market. What’s frightening is 75% of those drivers who buy accessories want to buy from a dealership like you, but you’re not giving them the opportunity. 43% of consumers will spend more than $500 on accessories. How would that impact your business? Many dealers have told me they don’t sell accessories because it’s too complex. Would you agree?
Think about this: Half of your customers are driving off your lot and buying accessories elsewhere. What would you do with that additional opportunity? For example, if you sell 100 vehicles a month and sold accessories on half of those vehicles, at $500 average accessory sale per car, you would see $25,000 per month. By not selling accessories, you are letting that $25,000 walk off your lot and fund the success of the auto parts stores down the street.
Why not allow your customers to personalize their vehicles at your dealership? They are going to do it anyway. Capture the profits you’ve been sending to the other shops in your area and increase your bottom line.
Most dealers I work with have had a hard time selling accessories on their own. With the right expertise, you can build the best approach for your store. Solve the complexity of accessories with a complete ecosystem connecting manufacturers, suppliers, dealers, and consumers, and leverage the experience of others to help you succeed.
Industry experts are predicting that used vehicle demand (and prices) likely won’t start coming down until spring 2022 at the earliest.