Dec. 28, 2009 – Meeting a new consumer dynamic

Longtime aftermarket supplier Nelson Rigg has made a number of strategic changes for the new year, most notably refining its inventory to reflect a more price-conscious consumer.
Nelson Rigg’s Vice President Dimitri Cretikos discussed those changes with Powersports Business, including the fact that the company’s more popular lines of vehicle covers, rainwear and soft luggage will see a double-digit percentage price drop in the coming year.
“I think long gone are the days when people would go into a motorcycle dealership and say, ‘Heh, I would like to get a motorcycle cover. What is the difference between this one and that one, and what does this one have that this one doesn’t have?’” Cretikos said.
“Now they just go in and say, ‘I need a motorcycle cover. Where do they start (in terms of pricing)?’”
In an effort to hit that low-price category, Nelson Rigg, a family owned business, has made a number of changes that will result in up to a 14 percent reduction in prices, while maintaining current distributor and dealer profit margins. Those changes include making aggressive buys from fabric mills — even increasing their order more than a year ago to gain more competitive prices — as well as renegotiating contracts with freight carriers.
Cretikos said the cost-cutting process hit all elements of the business, from “beginning to the end” in the manufacturing process.
Nelson Rigg also has reduced the number of products its offering, in some instances carrying one bag instead of three or four variations of a similar product. “There was quite a bit of overlapping,” Cretikos said of the company’s product lines.
In some of the company’s offerings, innovation also will play a role in reducing the company’s lineup. Starting in 2010, the company will offer a new type of mounting system for sport bike luggage called Triple Threat.
The new mounting system should make sense for all levels of the retail system, notes Cretikos.
“From our standpoint, we don’t have to carry all of these different types of bags,” he said. “From the distributor’s standpoint, they don’t have to inventory all these different types of bags and from a dealer’s standpoint, he doesn’t have to worry about what kind of tank (the consumer) has. He just has to buy the one bag and just keep these inexpensive accessories on hand to convert that bag into whatever the consumer wants.”
That innovation is part of the reason why the company feels secure in making bigger commitments to its suppliers.
“It boils down to having confidence in our products, but also in the distributors and the dealers,” Cretikos said. “We don’t have a crystal ball — no one does — to know what will sell or what we won’t sell. But we’ve made several adjustments to some of the product lines that have actually improved the product line in terms of the materials being used. We’re also using different manufacturing techniques to put our products together, which are helping us with some savings.” psb

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