INDUSTRY RESEARCH

Dealernews Research

By Lenny Sims

BY THE BOOK

J.D. Power Valuation Guide

The powersports industry is red-hot heading into the traditional selling season. Customers want to get out on the roads and trails as weather warms up and discretionary income stays positive. Shortages of just about every product industry-wide are pushing values for used motorcycles and side-by-sides to historically high levels.

In the motorcycle segment, the most recent 10 model years of cruiser values are averaging 10.9% higher than Q1 2020. That is a decade worth of value. And it isn’t just non-current cruisers…Sportbikes are running 12.4% ahead of Q1 2020! Solid numbers, to be sure, but wait, there’s more. Side-by-sides are performing even better than bikes, with utility models bringing 24.5% more money year-overyear. Sport model UTVs are running 16.1% higher for Q1 2021 — and the height of the season is still several months away.

Where do we go from here? Recent employment and consumer spending data has been encouraging, and forecasts point to continued strong conditions for at least another few months. Meanwhile, parts shortages and production issues will remain a factor.

Bottom line: It’s a seller’s market for any dealer lucky enough to have inventory.

J.D. Power Specialty Valuation Services (formerly NADAguides) is a leading provider of specialty vehicle valuation products and services to businesses. The team collects and analyzes tens of thousands of wholesale and retail transactions per month, and delivers a range of guidebooks, web service data, analysis and digital data solutions. J.D. Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, J.D. Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on J.D. Power to guide their customer-facing strategies. J.D. Power/NADA Guides, Inc.

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NEW NAME.

NADA VALUES ARE NOW

J.D. Power is a leader in providing vehicle data and insights through a variety of products offered through online and mobile applications, and printed guidebooks. Whether you are looking to buy, sell, trade, manage, or appraise a vehicle, J.D. Power is committed to giving you the level of knowledge and confidence you need by delivering the most comprehensive and accurate vehicle valuations in the business.

Dealernews Research

By Don Musick

X MARKS THE SPOT! Part II

LIFESTYLES OF THE MAYBE RICH AND FAMOUS!

Time to revisit “Tapestry” and add another layer to the mix. In Fig 4, “Spending Behavior” is layered over Tapestry lifestyle segmentation data (both at the Census Tract level). Now we can start to correlate lifestyle geography with spending behavior. But wait… there’s more! There’s a wealth of spending behavior data that we have yet to explore.

Tucked away in the “2019 Esri Spending Behaviors” layer is an icon labeled “Show Table” (Fig 4.). Clicking this icon opens a table of underlying data fields (138) that support the profile of each Census Tract! Consumer expenditures are summarized into 17 broad product/services categories (Table 1.), which are further divided into sub-categories.

Sub-category data fields include total and average consumer expenditure estimates as well as a comparative index to national averages. According to ESRI’s “Consumer Spending Methodology” whitepaper:

“The total expenditures value represents the aggregate amount spent by all households in an area while average expenditure reflects per household spending. The Spending Potential Index (SPI) compares the average amount spent locally for a product/service to the average amount spent nationally. An index of 100 reflects the average.”

To appreciate the scope of data that feeds into the 2019 ESRI Spending Behaviors table (2,022 products/services) you can see a complete list on this link.

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ALL TOGETHER NOW!

So let’s setup a final tandem view with ArcGIS Online and Google My Maps. In Fig 5. below, you can see the Spending Behavior and Tapestry ESRI layers along with My Maps customer locations and drive time contours for reference. Note also that the Spending Behavior data table is opened at the bottom of the image. Now for a little fun! Clicking on any of the Spending Behavior symbols will generate a pop-up that shows the average household retail spending and SPI as well as total spending and household count for that Census Tract. The nitty-gritty details of expenditures can be found and highlighted in the table below. An enlarged view of the table detail is shown in Fig 6.

At this point, I think you can see that with a little detective work you can build a pretty good profile of your customer base! You know their locations, how far they’re willing to travel, their lifestyle preferences, spending behavior and more. Google My Maps has shown you where your current customers have come from but the ArcGIS Tapestry and Spending Behaviors show you where future customers might be found. Between the two, X-marks the spot and Waldo has landed!

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ACRONYM SOUP REVISITED!

When we began this series of articles, we talked about the OEM buzzwords of “DAT”, “AOR”, “PMA”, “SEA” and others. We’ve all had freshly minted OEM sales reps come through the door and tell us where and how large our trade areas should be. Each OEM rep has a different take and unfortunately they’re rarely consistent. One thing that is consistent is their desire to “make their number” (which may require occasional trade area gerrymandering!).

Time to turn the tables and let them know that you alone are the captain of your territory! Let’s wrap things up with the Mark Twain quote from the first article…..”First get the facts, then you can distort them at your leisure”.

Then show them this!

From his first motorcycles (a Honda S65 and an S90) when he was 16 to 50 years later, Don Musick has never stopped twisting the throttle. Although his accomplishments in the research arena have surpassed his MX career Don has over 25 years experience with major manufacturers in the Powersports and Automotive industries specializing in e-business solutions for retail distribution networks. His solution portfolio includes the development and implementation of manufacturer/dealer extranets, consumer-direct commerce portals, manufacturer/dealer e-channel integrations as well as development of web-based sales force automation tools. For most of his career, Don has been fascinated (his wife would say obsessed) with geographic market analytics, dealer location planning and sales territory optimization. He founded Genesys Technology Solutions (GenesysTech) http://www.genesystech.com/ to develop new tools and market intelligence products to help manufacturers understand the competitive landscape of their industries, recognize opportunities and grow their businesses. A Spartan to the core, Don earned a B.S. in Physiology and PhD in Biochemistry from Michigan State University. Contact: dmusick@genesystech.com

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