General Motors Corp. decided six years ago to overhaul its accessories strategy.
At the time, accessory sales in North America totaled $26 billion, but it was growing. In 2006, according to data from the Specialty Equipment Market Assn., accessory sales reached $36 billion.
“The light bulb went on at GM in 2001,” says Nancy Philippart, executive director-GM accessories business channel. The auto maker saw the accessories market as a global opportunity — a market that could exceed $85 billion in overall sales by the end of the decade, according to some forecasts.
Philippart says GM's data shows 75% of typical customers will purchase accessories at the point of sale or within 30 days of purchase. GM, though, as with most auto makers, provided its customers little reason to buy accessories.
There was a lot for GM to overcome in order to make accessories a serious business center, she says. GM offered a limited accessory portfolio; there was little integration between the accessories group and vehicle designers; and the auto maker took too long to fill dealer orders — sometimes as long as two weeks; and finally, there was little dealer participation.
Today, GM's accessory business is significantly healthier, increasing sales 120% from 2001 — and it still has room to grow, Philippart says.
GM developed a 5-pronged strategy beginning with building out the number of accessory options it offers. Since 2001, the auto maker has increased the number of accessories across all its vehicle lines by 300%. Its truck lines have more than 100 accessory options available today.
GM also incorporated accessory design into the vehicle-design process. Additionally, vehicles are designed with specific accessory options in mind.
Doing so enables GM to validate the safety, quality and functionality of all of its accessories. Accessories even are included in the vehicle-crash tests.
A third aspect of the strategy was to integrate accessory sales into the dealership's car-selling process.
This includes training dealers how to sell and market accessories. Although it has made headway, GM still has a ways to go in helping its dealers develop accessories as an added profit center. Currently, only 35% of GM dealers aggressively sell accessories.
“We have some dealers who do it right,” Philippart says. “We are looking to the time when accessories become the rule for the dealers, not the exception.”
GM also developed an Accessories Distributors Installers network, a key part of its sales strategies. ADIs are independent businesses that store, ship, market, sell and install GM-only accessories for GM dealers. They operate in strictly defined markets. Many are owned by dealers. There are 40 ADIs managing 80 different markets for GM.
Having the ADIs also helps GM get accessories to its dealers much faster today — with same-or next-day availability the norm.
Philippart says she often is asked where she thinks vehicle personalization is going. “It no longer is a trend,” she says. “It is now a customer expectation.”