San Antonio — The Progressive Retailers Organization was at the Westin La Cantera Hill Coun
Approximately two years since automotive accessories became so popular that MERA, The Mobile Enhancement Retailers Association, began encouraging its members to embrace the segment and changed its name to accommodate it, sales of sport compact accessories are not performing as many had hoped.
Although many areas in automotive accessories continue to see high growth, two of the segments most likely to be offered at a 12-volt retailer — compact sport “styling” accessories and bolt-on accessory kits — are seeing a decline, according to industry members.
Brian Horowitz, president of APC, Corona, Calif., and chairman of the Sport Compact Committee at the Specialty Equipment Market Association (SEMA), said sales for the category fell 26 percent in the first half of the year, compared to the same period last year.
“It's slowed down quite a bit,” said Ryan Herman, national sales manager for Wings West, Newport Beach, Calif., a manufacturer of bolt-on kits and other items, which is now up for sale.
“We see a really big shift in the market,” confirmed Risa Gilbert, marketing manager for Toucan Industries, Pompano Beach, Fla., noting a trend away from pedals, shift knobs and racing seats. “Bolt-on is also suffering,” she said, claiming a slow decline started over a year ago but “became a lot more noticeable this year.”
SEMA figures show that the sport compact accessories market, also called the “restyling market,” grew steadily through 2002 at about 3 percent annually, reaching sales of $1.12 billion. In addition, the entire accessories and performance market, which includes truck accessories and performance parts for both trucks and sport compact cars, grew by 7 percent at a total market value of close to $30 billion.
But retailers, like suppliers, see the recent decline in sport compact accessories. “The performance industry is going through as much turmoil as mobile electronics. It's not going away. It's changing … the accessories side of the business is dying,” said Mark Miller, owner of Westminster Speed & Sound, Westminster, Md. “People are getting more into performance and less into flash. My accessory business is off by 75 percent, but accessories for pick-up trucks is not.”
Sport compact accessories include brake pedals, shift knobs and neon kits, as well as “bolt-on accessories” such as rear wings (spoilers) and body kits.
Some blame the decline on a flood of low-cost off-shore items, which diluted the business. Others say that tastes are simply shifting away from “flash” in favor of “performance.”
APC's Horowitz said most of the decline is in neon and LED lighting, citing two key factors: “The products are illegal and law enforcement is stepping up activity, and neon's been around for years and nobody's done anything new.”
Toucan's Gilbert says the trend is the result of a market shift in favor of performance. She said the kids who bought accessories in the mid to late 90s, when the market was new, are now older, and looking for performance. “Now they want speed and power, but when they were younger, it was more show and go,” she said, claiming the trend is apparent at industry shows. “There's a different energy when you go to the shows now. I think enthusiasts are bored with the sport compact shows.”
Kirk Miller, sales manager for AEM/DC Sports, Hawthorne, Calif., noted problems in product quality. “You have a trading company that jumps in, and they grab a couple of container loads and distribute it however and wherever — if you own a doughnut shop they'll sell it to you. There's no discipline in pricing and no service levels. So in the event of a warranty issue, the consumer is left to hang.”
AEM/DC Sports, which produces performance parts that are trending upward, in contrast to accessories, said its sales are up by double digits this year after a flat 2003.
Peter MacGillivray, SEMA's marketing and communications VP, noted the overcrowding in the accessories market. “About five years ago you had a hundred manufacturers participating in that niche and now its probably 500 manufacturers,” he said.
Some 12-volt retailers who dabbled in the market are now reconsidering. Car Toys said the segment “has had its up and downs.” Senior VP/merchandising, Jim Warren, said that while all lighting-related products and some smaller ticket items are seeing “excellent results,” he claimed, “the velocity of higher-end ticket items has been challenging and currently the entire category is under review.”
Tweeter said it test-marketed the segment but did not pursue it.
Miller said there is still room for success in performance parts if the retailer is willing to invest in it aggressively. “The [retailers] that took it seriously did well and the [retailers] that bought $5,000 worth of merchandise and stuck on the wall and clerked it, didn't.” He added that retailers can still use performance parts as incremental business.Performance, Accessories Sales
|Segment||Mfr. Sales||Mkt. Share||Retail Sales|
|Light Truck Market||$3.002||32.3%||$8.661|
|Street Performance Market||0.639||6.9||1.844|
|Street Rod & Custom Market||0.273||2.9||0.786|
|Source: 2003 SEMA Market Study|