The auto accessories business is trending up, achieving $33 billion in 2014 accessory sales according to the trade organization SEMA. Recent studies by Foresight Research show that nearly half of new car and truck buyers accessorize their vehicle, with average accessory expenditure rising by one-third between 2011 and 2013. Yet the biggest share of this spending continues to occur in the aftermarket, with most dealers failing to capture their share.
"Accessories offer large and lucrative profit potential for new car and truck dealers," says Nancy Walter, VP Business Development at Foresight. "Our research shows that buyers who do accessorize their vehicle will spend an average of almost $2,000, with certain demographics spending as high as $4,800. However, two-thirds of new car and truck buyers report that their dealer did not initiate an accessory conversation during the sales process and only 36% of accessory buyers obtain their necessary accessory information from dealership personnel. Given that total average accessory spend doubles when a sales effort actually takes place, this represents a lot of profit walking out the dealer's door."
And accessories can offer other benefits beyond simply revenue. According to Foresight's most recent report on the accessory market, four-in-ten buyers were influenced to buy their vehicle from a particular dealership due to accessories being available there at the time of vehicle purchase.
"Since we last published this report in 2013, the accessory market has expanded in part due to buyers' increasing demand for accessories in the performance and technology sectors," Walter said. "We responded by increasing the number of individual accessories we are measuring in this year's study from 55 to 72; some of these new accessories barely even existed two years ago."
There are a number of best practices that dealerships can adopt to increase their share of the accessory market, according to Walter. In addition to effective promotion of accessories and in-store displays, any accessory sales procedures should take into account dealers' competitive advantages and weaknesses versus aftermarket providers.
"Buyers perceive that dealers are better than the aftermarket on accessory installation, quality and durability," Walter said. "Alternatively, the aftermarket is perceived to offer better pricing. An effective accessory strategy would feature all of the dealer strengths and find ways to overcome the pricing perception."
Scheduled for June, 2015 publication, Foresight's 2015 Accessory Immersion Report (TM) will include accessory installation rates for 72 key automotive accessories by brand, segment, geographic and demographic groups, as well as accessory spending trends, in-store best practices and more.
