SAN FRANCISCO — A new study released by izmocars, a provider of automotive business solutions, revealed that timing and rich presentations make all the difference when it comes to selling accessories to new-vehicle buyers.
In a nine-month study of more than 120 dealerships, car buyers presented with an online configurator (which allowed them to interactively customize their new car from a menu of accessory options) – during the time of purchase – were dramatically more likely to buy accessories. One in two buyers who experienced the sales process purchased accessories, up from one in 10 who did not. The average dealership generated $400-$600 in accessory revenue per vehicle sold, an increase from $80-$120 before or a gain of 500 percent.
Capturing a bigger slice of the vast $32 billion auto accessories pie1 has never been more critical for car dealerships, given economic realities. The industry has just emerged from the worst new-vehicle sales year in 40 years (with sales down 62.5 percent over the last decade)2, while the auto accessories market has seen explosive 37 percent growth in that same ten years.3
Data indicates that 92 percent of consumers are willing to buy auto accessories; over 60 percent would spend more than $1,000, 4 and 70 percent personalize their new vehicle within 30 days of purchase. 5 But while enhancement sales represent among the highest-margin sales at dealerships, historically dealers have been unable to fully seize this literally million-dollar-per-dealership opportunity6 – accounting for a mere 10-17 percent7 of total sales in a market heavily dominated by independent chains and mail-order/online outlets.
"Dealerships actually have powerful, built-in advantages to 'own' far more of the accessories market than they do. Psychologically, consumers are far more likely to spend on enhancements at that exciting time of purchase, and the customer is physically in the showroom at that 'sweet spot moment,'" said Sidney Haider, president of izmocars accessories division. "This new data shows that if the right interactive and engaging tools are presented at the right time and are supported with the right sales and delivery process, a dealership can increase accessory sales astronomically. The average dealer adopting this process is generating $500-$1,000 in extra profit, per vehicle – representing a much-needed new revenue stream of $1 million a year."
The dealerships studied were using izmocars' AddOnAuto in-store accessory solution, which integrates accessories shopping and financing with the car purchase.
(1) SEMA Data, 2009
(2) NADA Data 2010
(3) SEMA release, 2010
(4) Used Car News/NIADA, 4.2010/MyRide Survey 10/2007
(5) SEMA Data, cited Consumer Reports, 11.09
(6) SEMA data, cited Used Car News, 2010
(7) U.S. new-vehicle dealers sell 10% of all performance parts/accessories and 17% of appearance-related accessories. (SEMA data cited AOL Autos, 2.2010)