Aug. 9, 2010 – Sharing aftermarket shifts in the retail market

DALLAS — For all the dramatic shifts and troubling side effects a recession can place on a national distributor, it can’t displace at least one constant.

A constant that Tucker Rocky Distributing President Steve Johnson sees even in today’s perplexing retail market: The utter importance of new product.

“You can still grow in this economy,” Johnson said in an interview with Powersports Business at the national distributor’s recent dealer show near Dallas.

“We’re new product driven. You have to continuously search for new product and then find a way to market to the consumer this new product and show the dealer how they can make money selling it.”

How to do both — marketing and selling — were items Johnson touched on as the distributor hosted a show that featured a representation of the more than 800 manufacturers the company currently represents. Johnson characterized the company’s 2010 sales as “steady,” but also noted the shift seen in commodity vs. performance product sales first encountered last year continues today.

“What continues to be strong is the basic commodities, the tires, the brakes, the oil, the chains, the consumerables in this industry,” Johnson said. “That’s as strong as ever. We’re not seeing a decrease in that area. Where we are seeing a decrease is in products that get sold with new bikes.”

But Johnson notes even higher price point or performance product can make in-roads in this challenging economy, calling out Arai as an example. The high-end helmet line has done well with its latest new product offerings, Johnson said.

“So my advice for dealers, for manufacturers is continually look for new product because Arai sales are doing nicely now because they’ve introduced new product,” he said.

To help manufacturers and dealers alike in this new market, Tucker Rocky has added a new marketing component: video. Johnson says the distributor has invested in video equipment and personnel to provide product videos on www.tuckerrocky.tv. The videos can be used by dealers in a variety of ways, from media for their showrooms to e-mail content to consumers.

“It’s a great way to educate our own reps too,” Johnson said.

The Tucker Rocky Web site contains product video for its house brands as well as many of its suppliers.

“We want that. We encourage that,” Johnson said of having Tucker Rocky suppliers add video content to the site. “If they don’t have video capability, a lot of them are using our facilities to create the videos.”

While Tucker Rocky moves to handle a changing marketing dynamic, the company also is wrestling with ensuring appropriate inventory levels. Johnson says this part of the business has certainly become more challenging as manufacturers have cutback on their build in some cases and transportation, particularly overseas shipping, has become erratic at times.

“We’ve actually had some vendors that read the tea leaves of the economy and throttled back, and in some cases it was absolutely the right thing to do,” Johnson said. “If they make product that is sold only with new unit sales, probably not a bad strategy. Do what you have to do to get through this downturn.

“But some companies have throttled back when they shouldn’t have, especially commodity items.”

Johnson uses tires as an example, a category has at times seen supply issues because of production cutbacks.

“The number of tires we sell isn’t a function of new unit sales, it’s a function of how many older units are out there being used,” he said. “I still think the usage is what’s it always been. If they (consumers) have a unit, they’re going to go out and play with it.” psb