Editor’s note: This is Part 2 in a series about megatrends Gary Gustafson sees for the industry for 2014. To read Part 1, click here.
Blurred lines — The monolithic view of powersports as being a motorcycle industry has permanently shifted to a broader view although motorcycle manufacturers and dealers remain the major part. In the race to capture more customers, the powersports industry now competes in many adjacent arenas. UTV brands are carried by competent ag dealers, heavy equipment dealers, golf and turf dealers and home improvement stores. John Deere has a sport UTV. E-Z-GO sells Bad Boy Buggies through many hunting retailers. Brammo made an abortive attempt to partner with Best Buy to sell motorcycles. Even Costco has a powersports program. Accessory manufacturers often sell directly to consumers via e-commerce and mobile commerce in addition to, or instead of, going the dealer and distributor route. With these new blurred lines, there are more sales channels than ever for manufacturers to deliver products through. The new giants are those who can digitize customer wants and digitize their product development and delivery to meet those customer demands while still having a competent, human customer service interface. In effect, the leaders shake your hand and chat with you, while discreetly scanning Google Glass to learn more about you and to find a solution to your problem. The fundamentals for success haven’t changed, but the tools to achieve it have. A rapidly-informed, open-minded approach is key. By using today’s technology, an organization can wage asymmetrical business warfare and go from working out of a garage to working out of a garage on their own private island.
24/7/365 — Motorcycles are the focus of a global market that never rests, but historically there were specific calendar dates on which the OEMs clearly launched their new model year. However supply chain improvements and more responsive dealer ordering processes have given Polaris, Honda and other brands the liberty of releasing new bikes or side-by-sides on a monthly basis instead of saving up all the new iron for one comprehensive dealer show. The broad umbrella-category typically called UTVs has the flattest 12 month sales cycle of any powersports product ever. Even the snowmobiling season has morphed. In some years mountain snowmobiling lasts far beyond the flatland riding season. At powersports dealerships heavy competition is leading to expansion of store hours and also leading to diversification of product lines to sustain staffing at steadier levels across all 12 months. The evolution of social media is moving at a dizzying pace and it doesn’t follow a circadian rhythm. As explained by Neil Pascale and others on these pages, dealers who compete at a top level work with social media diligently to promote special deals, concerts and rides at varying hours. The bottom line is that there is less off-season and fewer after-hours available for builders and dealers. Product delivery or “hard work” and social engagement or “soft work” function 24/7 like the sympathetic and parasympathetic nervous systems of today’s business world.
Buy low, sell high — During and after the Great Recession, some North American manufacturers continued to spend money on new product and sales channel development, while some Asian manufacturers were reluctant to. Although the tide might be turning, Asian manufacturers are clearly down in North American market share when compared to 2007. However, those manufacturers who hit home runs with their investments in new products are now being rewarded handsomely. They took risks, bought into the powersports market when it was down, and now their sales are higher than ever. The Great Recession was an economic epoch that shook the industry to the core in ways that many hope we will not see again in our generation. However, opportunities abound for visionaries to invest in other growth opportunities that may be triggered by weather patterns (snow plows, anyone?), draconian government regulations, new technologies, emerging economies, viral trends, the mass retirement of the baby boomer demographic and more.
Powersports industry consultant Gary Gustafson is President of G-Force Consulting Inc. in Clear Lake, Minnesota. G-Force Consulting offers market reports on components from batteries to transmissions and also offers OEM sales consulting for parts suppliers. See more on the web at www.gforceconsulting.com