Accessory Sales Become Attractive to Profit-Squeezed Car Dealers

Roadster, the online vehicle-purchasing website, just announced an online accessories tool that should send important notice that dealers can no longer wait until customers visit their stores to market and sell add-on products.

The message is, reach consumers earlier in their shopping journey to educate and influence their later in-store decisions handled by F&I departments.

Because of the sheer size of the auto-accessories market, it’s worth using every channel to capture share. Consumers spend about $40 billion a year on accessories. Roadster’s tool is available to dealers using its digital storefront.

This ability to influence consumer decisions earlier in the buying cycle is a key reason for marketing online.

Online pushes the sales funnel wider than ever, presenting an opportunity for dealers to promote, educate and market accessories and other aftermarket options in novel new ways.

Products marketed online foster early awareness. Noting this, accessories-related companies such as Insignia Group and the AddOnAuto unit of Reynolds and Reynolds have not been idle.

“The more parties that get into the game, the more the business will grow for everyone, and it is growing,” says David Copp Stringer, president of Insignia, a sales and training company he started in 2001.  

“There are two exciting things Roadster is doing, making vehicle personalization part of the process and doing it in a digital manner,” he says.

Insignia worked with Volkswagen of America to build an online accessories tool, called The VW Accessory Builder for VW showrooms and auto shows. A version for Jaguar Land Rover launched recently.

Reynolds acquired AddOnAuto in 2014. It is a digital configurator that allows dealership customers to see what a vehicle looks like equipped with various accessories. It also offers prices and payment calculations.

“Consumers for years have been able to buy accessories outside the dealership either online or at after-market stores,” says Reynolds spokesman Tom Schwartz. “That meets a consumer need, but not a dealership need. With accessories, we’ve focused on helping establish another profit center inside the dealership.”

Dealers know that is important, and to drive home the point, Schwartz offers this comparison: the Ford Pinto sold for $3,500 in 1974 and had an $800 profit margin for dealers. The average price of a new car today is nearly 10 times that, but the dealer profit margin is not and continues to be squeezed. 

“Accessory sales in the dealership can help fill that gap,” he says.

Consumers have many accessories shopping options, from dealers to big-box auto stores to catalogs, both online and print. A relatively small percentage of those customers will make the accessories decision at the dealership.

“That’s the business questions for dealers; how to bring the accessories sales process into the dealership and make it part of the car- and truck-buying experience,” Schwartz says. “In the past, dealerships typically have lacked the right technology platform or processes to sell accessories successfully.”

Today, dealerships hold about 8% of the accessories market. “Why wouldn’t dealers want to compete for the other 92%?” Schwartz asks.

Both he and Stinger note the importance of reaching the buyer – whether for accessories and other F&I products or vehicles – at the right time in their shopping experience.

If that experience is online, it must be a seamless transition to what consumers will experience in the showroom, they say.