SEMA News—March 2013
By Steve Campbell
2012 SEMA Consumer Segmentation Report
Know Your Customers to Build Your Business
From manufacturers and distributors to jobbers and retailers, the automotive specialty-equipment industry is built around meeting consumers’ demands. Understanding which goods and services those consumers are actually interested in requires study of the marketplace, interaction with customers and attention to detail—and that is a pretty fair synopsis of what was done to create the latest offering from the SEMA research team and the Modellers Inc.,a market research and analytics company.
SEMA-member companies rely on the association for targeted, meaningful research that can help them understand and meet their customers’ needs more effectively. They know that the marketplace is comprised of a huge variety of people whose requirements are as diverse as the vehicles they drive and the lifestyles they embrace. But within that mass of differing motivations are some prominent segments that are driven by common attitudes and shared interests. The purpose of the 2012 SEMA Consumer Segmentation Report is to point out how those market divisions can be targeted by SEMA-member companies.
In talking about “segments,” the report is not referring to just the various types of vehicle hobbyists serviced by the industry, such as hot rodders, off-roaders or sport-compact tuners. While each of those categories is crucial to the business community that serves it, this new report looks at people and their economic, demographic and vehicular characteristics. The report examines the diversity of attitudes they have about accessorization, specialty-equipment products and working on their vehicles.
“The 2012 SEMA Consumer Segmentation Report establishes a baseline of consumer groups, which we will use to structure ongoing research efforts,” the report says. “[Industry professionals] can use this robust segmentation scheme to drive improvements across several facets of your business.”
Reviewing the report and understanding market segmentation allows aftermarket businesses to augment sales efforts in a variety of ways:
- Identify target consumers: By looking at product purchases, vehicle usage and interests, companies can identify the segment(s) that are likely to be their core customers. Understanding the needs of these key consumers can help each business better serve its customers.
- Expand customer base: Expansion opportunities may exist with customers a business hadn’t previously targeted.
- Secondary segments: By recognizing the different needs and interests of consumers, an aftermarket company may be able to tailor services to a wider variety of customers.
- Vehicle platform and usage: Each business’ target segments may show that owners of vehicles it doesn’t currently support have similar needs or interests in the company’s product types.
- Messaging: Consumer needs and benefits, along with interests and hobbies, can point to refined and targeted messaging that will resonate with a company’s customers.
- Marketing: Purchase and research sites, hobbies/interests and vehicle usage can be used to refine marketing strategies and advertising channels.
- Product development: Vehicle usage, interests/hobbies and parts-purchase patterns can spark ideas for new products, line extensions, feature enhancements and cross-selling opportunities for target consumers.
The genesis of the study was based on requests for this type of research from SEMA members, but its gestation began with a series of interviews with member companies that service different sectors of the industry. These conversations provided the fodder from which a consumer questionnaire was developed. The questions were based on the information that the member companies thought most useful to understanding automotive consumers in general and specialty-equipment consumers specifically.
The researchers next held a series of focus-group meetings with consumers who had been identified as buyers of aftermarket parts. The information resulting from these gatherings led to further refinement of the survey questions, uncovering what the researchers defined as “issues and thinking directly from target consumers.”
The final raw research was acquired through a nationwide online survey of 3,000 specialty-equipment consumers in the spring of 2012. The survey subjects were prequalified as U.S. residents over the age of 18 who had spent more than $100 per year on automotive accessories or modifications, not including routine maintenance. They owned all types of vehicles and included both enthusiasts and casual accessory purchasers, and they represented every demographic slice of society.
“For this research we intentionally looked at a broader group of consumers than in our typical research studies,” the report states. “We did this for a few reasons:
“To make sure we’re not missing someone. There may be some people who are consumers in the market but who we might not typically research, since they don’t look like our traditional buyers.
“To make it applicable to the widest range of parts and accessory applications (Remembering that our industry isn’t solely made up of ‘go fast’ upgrades.)
“To identify opportunities for expansion or extension. We want to identify ways that our membership can grow their market by gaining understanding of the broadest consumer needs.”
Based on the questions and insights from the industry and the focus groups, each of the survey participants was asked to rate a series of statements to gauge their feelings about their vehicles as well as their opinions about accessorizing or modifying their cars and trucks. The resulting analysis coalesced around six groups of consumers that displayed distinct feelings about automobiles and customization. The respondents were also asked about their purchase habits and interests in order to develop an understanding of their underlying motivations. Using this information, the researchers gave the six groups names that reflect their levels of interest in automobiles and specialty parts.
Three of the segments were comprised of what are usually called “Enthusiasts,” and those segments were projected to make up a total of about 9% of all vehicle owners.
“Enthusiasts can be more effectively marketed to by recognizing which segment they belong to and developing messaging and communications strategies geared toward their specific motivations,” the researchers said.
From an enthusiast perspective, the top tier of the group is comprised of “Builders.” These are the core automotive hobbyists who are probably most recognized as “gearheads” or “car guys” by the general public. They’re the people who love the time they spend actually working on their vehicles and derive great satisfaction from doing it.
Next in the enthusiast hierarchy are “Drivers.” These are the folks who work on their vehicles to make them more enjoyable. The Driver group accessorizes and modifies vehicles more from the enjoyment of using their cars and trucks rather than from the pleasure of the effort itself.
The third enthusiast segment is the “In-Crowd.” Vehicles are part of this group’s social life. They belong to car clubs and attend car shows, and their accessorization tends to follow trends. They enjoy the recognition they get from having unique or high-profile vehicles.
“Enthusiasts can still be reached through many of the traditional methods, including car shows, races, automotive magazines, television shows and other automotive events,” the report says. “Increasingly, the Internet is becoming their primary research tool (and frequent shopping method), and they are influenced by social-media activities, such as blogs and automotive forums on their favorite automotive topics. However, these are still very much hands-on type people, and they appreciate dealing with knowledgeable people and having access to reputable information sources, such as local specialty shops, manufacturers websites and customer service representatives.”
The other three segments that fit the demographics of the survey were made up of what might be called “General Market” consumers and comprise 12% of all vehicle owners in the United States. These segments are more likely to purchase accessories and appearance products than performance goods, the report says.
The first of the General Market survey participants were labeled as the “Handyman” group. They tend to be do-it-yourself mechanics who perform their own work in order to save money and prolong the life of their vehicles. They may be open to upgrades as part of their vehicle repairs and maintenance. “The Handyman segment represents an opportunity for manufacturers and sellers of certain types of parts based on a positioning of quality, durability and increased fuel mileage,” the report says.
The next group uses vehicles mainly for transportation from place to place and is mostly concerned about function. Labeled as “Commuters,” they use their cars and trucks as everyday drivers and don’t view their vehicles as a reflection of their interests or lifestyles.
And the final group of participants comprises the “Do It for Me (DIFM)” segment. This group relies on professional mechanics for their vehicle maintenance and upgrades. They’re the least automobile-savvy group, but they do still have some interest in accessories and appearance products.
“Quality parts that can be positioned against OEM replacement parts at a competitive price can be a strong motivator [for the Commuter and DIFM segments], especially if highly recommended by independent installation shops,” the report says. “More expensive parts can still be marketed effectively to this audience if value can be demonstrated through longer life, better mileage, etc. Distribution through the national chain parts stores is likely to reach the widest spectrum of potential non-enthusiast customers.”
The report examines core metrics across the segments—what each group spends, what each one buys, where they get their information, where they like to shop, what types of vehicles they own and advice about how to target each group. The metrics also look at the demographic composition of each group—gender, age, income—as well as the types of media programming, reading and activities they enjoy. It further breaks out what each group looks for in the parts they buy, ranking items such as quality, looks, functionality and reputation. For instance, Builders rank performance at the top of their lists, while Commuters are looking primarily for the lowest price and the best reviews.
The report then delves into greater detail about each group, including information about segment size, annual and total spending levels, attitudes about their vehicles, the modifications they’ve made and specific guidance on how to address or message each segment. The modification information includes not only the types of parts and products purchased, but also the reasons behind the purchases and the emphasis put on various types of products. It reviews the specific types of research and shopping tools each group uses, including where and why.
Each individual profile ultimately provides targeted guidance about how to market to the segment, with information about motivations, emotional responses and product features. It also indicates specific media to target, such as enthusiast magazines and websites or more general media.
The final sections of the 136-page report include a series of appendices that reflect the raw data. They include parts tables that show the percentages of modifications performed by each consumer segment, such as engine work, chassis, suspension and wheel modifications and intake, fuel and exhaust upgrades, as well as the vehicle types owned by the various segments.
The 2012 SEMA Consumer Segmentation Report is full of information crucial to aftermarket executives, engineers and developers who wish to understand the automotive specialty-equipment market. But it will also be the basis for further SEMA research, including additional consumer studies, education sessions at upcoming SEMA Shows and webinars discussing how companies may use the data. In fact, all future SEMA consumer research will include segment profiling.
As with nearly all SEMA research information, The 2012 SEMA Consumer Segmentation Report is free to SEMA-member companies. It is available as a PDF download.