Someone recently asked me, “What do you consider the biggest threats facing the industry over the next few years?”
Here’s my take – The large-scale retirement of the baby boomer generation tied to a strong economy and a strong housing and credit market means most of our members are experiencing a boom time right now. Companies are growing and sales are strong as the last true “gearhead generation” is in an economic position to build and buy collector vehicles, RVs, etc. There is short term gain to be mined over the next decade here, and as that generation continues to become more comfortable with online purchasing and digital marketing the continued march of our members towards a direct to consumer communications and sales model will result in strong sales.
However long term, I see the following challenges facing our industry.
We not only need new consumers, we also need to pivot and adapt to find ways to communicate with them and develop products they want. The youth engagement task force and consumer engagement programs have made good strides in both of these categories, particularly exploring ways to connect with both consumers and young people as quickly and on as large a scale as possible. However, if our members don’t have products (or applications) the next gen consumers want, it will be a moot point. I believe we need to act quickly to push the research department to mine big data to help our members prepare for this. Global vehicle platforms, the continued demise of both manual transmissions and ICE engines and shifting young consumer tastes away from pre-72 domestic vehicles to 1980s-00s euro and Japanese vehicles are all going to change our market whether we like it or not, so we need to help our members prepare for it.
The distribution model is changing rapidly. A decade ago nearly all of our manufacturers sold through multi-step distribution. Now more than half sell direct to consumer and that number grows exponentially every year. This is not only effecting WDs and brick-and-mortars, it also creates new challenges (and opportunities) for the manufacturers. Proper MAP policies and enforcement, learning now the navigate the minefield of Amazon sales, e-commerce sales tactics and even taxation are all issues the industry is having to tackle quickly. SEMA has done a good job pivoting to help all the companies effected by this change with education on these topics, but it needs to continue and we need to address that as our industry continues to become more focused on the consumer, the show and even our association will need to reflect this change as well.
As a marketer, I am also acutely aware that we are already experiencing a massive shift in how media and marketing effect our industry.
There are essentially four “buckets” you can place media in that cover the aftermarket.
- The first is the one that started with Robert E. Petersen in 1948 – this bucket is the vertical press, the one that includes all the publishing and media companies that have print and digital outlets covering the aftermarket, motorsports, etc.
- The second bucket are content creators for brands. These are agencies and in-house marketing teams that do everything from social media and blog creation to video production to in some cases the creation of actual magazines and enthusiast microsites, all with the goal of creating content to attract and engage consumers.
- The third bucket is composed of mainstream media that cover the automobile, the industry or the hobby in some way but do not focus on the aftermarket. These are the auto beat reporters and “car guys” at publications ranging from LA Times and WSJ to Men’s Journal, Road & Track, Car & Driver, Maxim, etc. They occasionally cover cars, but rarely our world.
- The fourth bucket is the newest – these are the influencers, freelancers, social media mavens, bloggers, vloggers and podcasters.
This is where I see both the biggest challenge and the greatest opportunity. For 50 years SEMA has done a good job working with the first and second buckets. We welcome them to the SEMA Show, we host them at MPMC, we communicate with them about the RPM Act and other legislative issues, etc. However we have not done much with the third bucket which is basically unaware that SEMA is anything more than a trade show and looks upon most of the show with derision. By welcoming and including these people, we would dramatically increase mainstream awareness as they have the largest audience of anything on this list. However they need to be treated differently then the media in bucket one.
Finally we have the influencers and digital media creators in bucket four – these people are mostly self-funded, so they often do not have travel budget to come to our shows and most of our member companies do not know how to connect with them or even how to work with them. But they are powerful, and they are the single most powerful conduit we have to young consumers. People under 30 are fleeing cable television nearly as quickly as print media – so shows like Battle of the Builders will not be effective for reaching Millenials. These people ARE. We need to harness them, and use them to engage the next gen with organic content about our industry, the hobby and our members to drive both awareness and sales and secure our future.