A recent study by MTX (MiTek) confirmed the gradual shift over the past decade: that the 25 to 40-year old is now the main demographic for the car electronics specialist in terms of revenue.
Four years ago, at an industry-meeting of the 12 Volt Summit in Dallas, when dealers were asked to name their key demographic, the industry appeared split between those catering to the 16 to 24-year old and those serving an older clientele.
But, this month nearly 80 percent of specialty retailers said that the 25 to 40-year old was the most profitable group, in an MTX study of about 100 specialists. The 25 to 40 year-old age group also spent the most dollars, according to 80 percent of the respondents.
The findings should highlight a current disconnect in car audio marketing. Many retailers and suppliers still market primarily to the younger demographic.
“The retailers are seeing [the shift] and yet we’re doing very little to actually capitalize on it,” said Barry Vogel, new Consumer Brands Manager for MTX and a long-time retailer. “We’re still concentrating so heavily on the 16 to 24-year old that we just seem to want to hold on to for dear life.”
He continued, “But I was surprised that almost every retailer that took that survey acknowledged that it’s no longer their profitable customers. So it’s time for car audio to grow up.”
The study also asked retailers what was most important when deciding which lines to carry. 66% said quality was most important and 20 percent said price was most important. Only 4 percent said brand recognition was most important. See results below.
Source: MiTek Corp.
If all these name brand manufactuers would step up and practice control of thier products instead of letting the internet degrade the products value. The very structure that put these guys on the map would help them increase sales . But the brick and mortors are having to sell no name products to maintain a profit margin. Even DEI is attempting to police their product ,but not enough when its being sold at wholesale on Ebay and such. These names are tradmarked why cant the just shut the sales down by unauthorized use of the name alone.
The internet may be a huge revenue generating tool, but does it help alpine to have Joe Smoe selling their product online out of his garage and then not backing up the warranty on a new product. Or Alpine how much money is lost in warranties because of the enet buyers trying to do it themselfs and shorting it out for you to replace FREE…………..
Perhaps it’s related to the fact that the 16-24 year-olds can’t find a job… 24% are unemployed in this age group. They also are not driving as much as past generations… gas is expensive, more socializing is now being done online, etc.
Perhaps it is because the 16-24 year old doesn’t want ‘advice’ from a retailer and instead finds it easier to shop online or spend their money on iPads, Tablets, TVs, etc. Whatever the case may be, the 25-40 year old has a larger appetite for SPECIALTY services, but that does NOT mean they have a larger appetite for OUR INDUSTRY. Car audio is still ‘ruled’ by the 16-24 year old and there is a serious disconnect with the tech-savvy, price-conscious consumer and the old retailer.
To do the name of the article justice, you should poll all car audio shops, big box stores, and online retailers — not just specialty retailers.
I find it interesting that the study asked: “what was most important when deciding which lines to carry.” and it left out the most important choices in the answers: PROFIT!
and, by current definition, Profit would have to include internet protection. These days I couldn’t hardly care less about Price, Quality, Feature Set, Cosmetics or Brand Recognition IF THERE IS NOT PROFIT LEFT IN THE PRODUCT.
I need a protected product and ideally a choice of protected products. From those I can find a product that fits all the other categories just fine.
I’m still waiting for a main line manufacturer (alpine, kenwood, clarion, jvc, pioneer, etc) to step to the plate and offer a clean line and keep it clean. Don’t they understand that if they offered headunits/NAV/etc with 35%-40% margin and it wasn’t available all over the internet they would have just about every good brick and mortar store in the country wanting to sell their product?? They would have so many dealers wanting their product they could go back to picking and choosing who they sold their product to instead of the whoring out going on these days. It’s a novel concept. Higher dealer margins, lower customer returns, better customer service, better dealer support, etc. FTW
Many of those customers of all ages would once again visit your store to see the latest, coolest device instead of buying through their phone from amazon.
Maybe all those main line manufacturers are just making too much money these days….ha ha ha
I love stuff like this as I am a statistics junkie. At ICE we probably do more survey’s than any other industry entity. Alluding to what Ray has said, we have learned a bunch about how to conduct a survey in order to get accurate results.
While I do agree with the results of this survey and it is why http://www.incarexperts.com specifically targets that group, I must say that it leaves some important questions. It would be great if we could get some further clarification. For example, question 5 says, “Who is your most profitable customer?” Obviously some may take that to mean ‘who spends the most total dollars’ while some may take it as ‘who spends the most per sale’ and others may take it as ‘who buys the more profitable items’.
This is in NO WAY to look negatively on this survey as I have high praise for anyone who attempts to make the industry better, but I just wanted to point out that survey taking can be very tricky and understanding the results can be even tricker. ICE learned the long/hard way.
Rob Elliott
incarexperts.com
Great Stuff that a brand is thinking on its own. I completely agree that our industry should not focus so heavily on the younger demographic that we exclude the other demographics. There can be no doubt but that the current and near term technologies that we offer for sale to the consumer naturally skew the demographics to include a larger group than just 16-24 year old males. On the other hand I wonder if the study might have yeilded similar or different results if there were more business oriented questions… Consumer loyalty to brand, brand loyalty to business channel, brand business practice fit with retailer business practices, achievable profit margin, brand/retailer identity synergy, brand business practice predictability. We all know it is possible to secure desired results of a survey by structuring the questions.
Amy,
Excellent and important story. As purchaser/user demographics change, it behooves all of us to be sure we’re in synch with our customers.
This change in demographics could be reflective of the “aging of America” or there may be other technology explanations.
AND the fact that quality was more important than price as a driver of the purchasing decision confirms other research that I’ve seen that came to the same conclusion. We in the industry tend to think EVERYTHING comes down to price…but that just isn’t always the case.
Good job!
Ted Green
The Stratecon Group, Inc./Strategic Concepts in Marketing