DMEautomotive: Service Retailers Missing Profit Opportunities
A new consumer survey from DMEautomotive reveals that service shops aren't cashing in on key service opportunities. It also shows that young, Internet-savvy shoppers are rewriting the purchase process.
DAYTONA BEACH, Fla. — A new study from DMEautomotive found that consumers are changing the way they purchase brakes, batteries and tires. It also revealed that service department will need to change the way they market and sell to today’s younger car owners.
Only 5 percent of the more than 2,000 consumers surveyed said the service outlet they worked with informed them that they needed tires. Only 9 percent who needed a battery said the service outlet they worked with recommended the batter be replaced, while 21 percent said the service department recommended that their brakes be serviced.
Vehicle owners under the age of 35 also research at a higher rate than other age groups, the study also found. Two in three vehicle owners in that demographic said they research core service work like brakes, batteries and tires. On average, only one in three vehicle owners over the age of 35 said they researched those services.
Thirty-eight percent of younger consumers are now buying batteries online, while 17 percent said the order tires online. That’s four and eight times, respectively, higher than customers over the age of 35.
With battery, brake and tire replacement services representing tens of billions in customer pay dollars annually, the findings serve as an industry wake-up call. On average, only one car owner in 12 first learned that they needed new brakes, tires or a battery from a dealer or mechanic, indicating that an overly passive sales approach is leading to lost revenue opportunities. And while the survey reveals that consumers, on average, do a large amount of research on these services, it's the under-35 crowd that's radically remaking the path-to-purchase.
"This new research helps all service businesses understand today's brakes/battery/tires purchasing funnel, so they can put in place the right, cross-channel strategies to grow market share," said Doug Van Sach, vice president of strategy and analytics at DMEautomotive. "And the new data suggests several basic, best practices that retailers really should embrace:
To combat widespread sales passivity, complimentary, comprehensive multipoint inspections need to happen with every service visit, the study recommends. Retailers also need to create a engaging online shopping platform for batteries and tires, with clear pricing, a range of price-points and detailed product features.
“The “holy grail” is to implement marketing programs that can anticipate when a customer is ready to make a brakes, battery, or tire purchase and deliver timely, relevant campaigns that interrupt their typical research windows – to put that store top of mind when it most matters," the study states.
While both the aftermarket and dealerships alike are missing out on crucial revenue opportunities, Van Sach noted that other, recent DMEautomotive research reveals that aftermarket players are winning the brakes-battery-tires war, with only 64 percent of dealer customers reporting they would consider using dealers for brake services — 46 percent for battery replacements and 36 percent for tires.
Additionally, only 44 percent are likely to choose dealerships for these services (in aggregate) within the first two years of in-warranty ownership. And as vehicles hit 3 to 6 years, dealers lose roughly half of this business. Furthermore, DMEa research shows that for dealers, cracking the under-35 shopper's service selection "code" is mission critical, as roughly half of aftermarket chain loyalists are now under-35, while half of dealer loyalists are an aging 50-plus.
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