Too many dealers spend too little time merchandising their parts and accessories.
Seeing the same old mud flaps, floor mats and retail clothing gets awfully monotonous. It surely doesn't do the parts department justice.
Parts managers shouldn't display shiny new alternators, starters and hard parts.
These are hardly point of sale items, and they're certainly not impulse items either. Customers know that these are available anyhow.
There are, however, a plethora of parts and accessories that can be displayed to not only highlight the new- and used-vehicle, but to also display to the service customers who have to wait for their cars. It's a perfect time and place to make them aware of dealership merchandise.
So, why don't parts departments display more items? There are various reasons including:
- Lack of merchandise display room.
- Lack of expertise in merchandising such things.
- Lack of knowing what to display.
- Fear of being "stuck" with merchandise that does not turn-over.
Parts departments' biggest revenue comes from either internal (service and body shop) customers or wholesale customers. Parts sold internally account for about 70% of the parts departments revenue.
If most of the revenue and business comes internally, is there not a synergistic relationship between the two?
Absolutely!
Legendary Florida dealer Jim Moran realized this and subsequently experimented with the new-vehicle purchase process.
Instead of directing new-car customers to the F&I office, he had them first directed to the parts department to make a "wish list" of accessories and parts that they would on their new vehicle.
After the "wish list" was complete, then and only then, were customers escorted to the F&I office to make those wishes come true. The parts and accessory revenues went up substantially because of it.
About 70% of vehicles are accessorized within the first two weeks after delivery. We know it is in the customer's best interest to get those items right at the time of sale.
But do they know? For example do they know that OEM parts and accessories bought at time of sale are covered under the vehicle's three-year, 36,000 mile warranty? Do they know most independent parts and aftermarket stores cover for only one-year and 12,000 miles?
Would your dealership benefit from a good merchandising program? Look at how accessories sales break down according to vehicle type.
Lang Marketing Resources indicate domestic light trucks had 42% of the automotive accessories share, followed by foreign cars with 30%, domestic cars with 20%, and foreign light trucks with 8%.
It's not surprising domestic light trucks are first, considering their sheer numbers and their owners' penchant for accessories.
What's surprising is foreign cars taking second place. It suggests importers may be more aggressive at merchandising their parts inventories and consequently getting more of that market share.
What exactly is a merchandising program? It is a concerted effort to display and rotate merchandise on a regular basis.
Here are just a few examples of how successful operations such as Walmart might merchandise its goods and how some dealership accessories could fit in:
According to type of products: - Performance accessories such as sport rims, ground effects, lift kits
- "Pride" supplies such as shirts, sweaters and key chains
- Utility accessories such as mud flaps, running boards and box liners
- Safety/security items such as car alarms and remote starters
According to product segments: - Pickup trucks
- Minivans
- Compacts
- Luxury
- Sport/utility vehicles
All these vehicles and subsequently the drivers of these vehicles all have different needs. Finding out these needs and filling them with usable products is the difference.
A domestic dealership in Minnesota or Colorado should display merchandise for the hunters and snow mobilers.
A VW dealership in Florida or California may merchandise according to surfers, sailors and skaters.
In other words, merchandise according to regional recreational activities, hobbies and interests when displaying parts and accessories.
Most large retail stores grasp the importance of merchandising, and subsequently spend millions every year on this vital aspect of marketing.
They make their displays visually appealing. These companies realize the importance of merchandising and how it affects multiple sales.
Dealerships should realize this, too.
