What’s the coronavirus impact on the auto aftermarket?
Post COVID 19, most economists seem to agree right now that we’re probably heading into a recession. And it makes perfect sense that if people are unemployed and the economy is shut down, a recession is likely. We can’t predict the future but there are five things we do know:
1. The automotive aftermarket is historically recession-resistant.
2. Coronavirus concerns are driving more people online.
3. If consumers don’t buy new cars, their old cars need more parts.
4. The aftermarket and the car hobby are driven by passion.
5. For better or worse, we can’t spend money on dining out, movies or sporting events.
The aftermarket in the 2007-2009 Great Recession
The first 8 months of the Great Recession (December 2007-June 2009) were great months for auto parts sales, with an average 2.8% sales growth over the previous year. The recession deepened in 2008, but the aftermarket still had an average monthly 2.1% sales growth over the previous year.
The recession was officially over in June 2009, but numbers were low through the end of 2009 into early 2010.
Monthly sales for auto parts typically peak in summer and fall, and dip in the winter. While there were normal peaks and dips in 2007-2008, there was a big dip in January 2010, so what caused that? Two major events: the big stock market crash in September 2008 and an all-time record for long-term (6 months+) unemployment. While overall unemployment rate didn’t affect retail sales (it was 10% in 2009), there was a spike in the long-term unemployment rate in January 2010. Interestingly, this occurred six months after the official end of the Great Recession. Consumer confidence in the economy was actually trending up significantly in 2009, into 2010.
The stock market crash didn’t slow down auto parts retail sales. The biggest impact was the peak in long-term unemployment. That’s probably the biggest potential coronavirus impact on the auto aftermarket.
The aftermarket in the 2001 recession
The 2001 recession was milder than the Great Recession, and lasted from March through November 2001. That year the aftermarket was weak to begin with; retail sales were down from the previous year, September 2001 had the 9/11 terrorist attack, and the stock market crash seven days later. At the time it was the biggest one-day crash in history.
The recession lasted nine months. Retail sales of auto parts, accessories and tires were up over the previous year in 3 out of those months.
The key point to keep in mind is the automotive aftermarket is traditionally recession-resistant. Cars need parts. Enthusiasts want parts and accessories. A garage or driveway is a great place for a DIYer to practice social distancing. This is good news. One thing significantly different in 2020 vs. 2007 is that banks today have a lot of liquidity. In the Great Recession banks and financial institutions were strapped for cash.
A huge spike in oil prices in 2007-2008 contributed to the Great Recession. We don’t have that problem in the economy right now. Congress is allocating $2 Trillion to stimulate the economy, that certainly helps.
COVID-19 fears are driving more consumers to online shopping. That will drive eCommerce up in 2020, exceeding previous forecasts. Consumers are avoiding crowds and they’re not leaving their home as much. While that’s not good for brick & mortar auto parts or tire stores, it’s great for eCommerce auto parts stores.
Unemployment has just spiked to unprecedented levels. That’s not good, but we don’t know the impact of that yet because the long term unemployment rate, not the unemployment rate, affected the aftermarket in the Great Recession.
READ MORE HERE: hedgescompany.com
5 key elements of content engagement
Quality content marketing may take a lot of work, but the results are worth the effort. Content marketing involves your marketing team creating and distributing valuable information in order to attract and retain customers. It can take the form of a video, blog post, newsletter and more.
Content marketing, on average, generates three times the leads but costs 62% less than traditional marketing.
Nine out of 10 B2B buyers say content has a moderate to major impact on purchasing decisions.
Seventy percent of consumers feel more connected to a company due to content marketing.
Content marketing provides an upfront value to consumers, such as information and emotional connection, to gather leads. However, you need to provide that information in an engaging way for it to have maximum efficacy. Here are five key elements for effective content marketing:
Determine things such as brand “voice,” what your content goals are and who will be reading your content well in advance of publishing your first piece. The voice, information and emotion all need to exist in the same circle. Also, set a content calendar. Determine what you will publish and how often so that your content will become a fixture in the audience’s consumption.
Storytelling forges an emotional connection with your clients. With storytelling, you don’t need to promote a specific product. Telling your brand’s story — your history, goals and company values — lets the consumer know who you are in a compelling way.
- Customer testimonials
Ninety-seven percent of consumers are more likely to trust peer-reviews and user-generated content. Decisions are not made with one input alone, and the validation of a customer testimonial, particularly in video content, will resonate with consumers and strengthen the credibility of your brand.
While your purpose for creating the content may be to generate leads, it must also demonstrate value to the consumer. Use metrics to track which content is the most successful and tailor your strategy to what works best. Find out consumer pain points and make the content address or resolve them. Include plainclothes data and provide insight from industry professionals for easy, informative content.
Target your audience on all platforms, including your website, social media accounts and email newsletters. The content should be tailored by platform, but you will reach a wider audience and increase the likelihood of shares and engagement when you introduce the content on all platforms.
Content marketing is a vital complement to traditional marketing, improves your audiences’ relationship with the brand and has an influential impact on purchasing decisions. By applying key elements like consistency, customer testimonials and a compelling narrative, your company can produce quality content and increase sales.
READ MORE HERE: www.randallreilly.com
How direct selling got transformed during COVID-19
COVID-19 has had a hand in redefining and reshaping just about every industry and market in existence. We’ve seen small businesses, retailers and the hospitality sector take major hits. We’ve seen drastic shifts in the way work gets performed on a day to day basis. And we’ve entered a remote work revolution of sorts that has truly reconfigured the traditional workplace landscape. One sector that, while also impacted, has remained strong and has even emerged as a viable career solution for many as a result of this pandemic, is the direct selling industry.
Built upon the backs of a distributed workforce and already very much used to operating given off-site conditions, those involved with direct selling were well-versed when it came to adapting to the new normal that the coronavirus put before us. And in fact, some estimates have shown that over the course of April, the number of direct selling clients grew by as much as 40%. That said, as with pretty much any business in the country, the direct selling industry is also realizing that changes need to be made in the weeks and months moving forward—such changes will largely come in the form of technological and digital transformation.
So why in terms of direct selling is digital transformation so important; the industry is after all the model for the original work from home mindset…Primarily because there are still some needs that have to be addressed in order for any direct selling company to sustain itself in the new business climate we now face and to be able to scale quickly and efficiently.
Today’s Selling Realities
Ecommerce is not slowing down anytime soon. In fact, as in-store retail sales are predicted to steadily decline moving forward, we will likely be seeing an even more rapid rise in terms of eCommerce. Social selling during the pandemic proved a boon to many—both for companies and customers. And that is poised to continue to be a strong outlet particularly for direct sellers.
Additionally, as social distancing stands to hold firm as the national protocol, consumers will be more and more reticent to go out and shop, eat and visit close contact services. This suggests that there will be greater demand in terms of direct selling based makeup products offered by the likes of New Avon and Senegence or self-care items from companies like Nu Skin and Beautycounter for example. Not to mention, we are apt to see more individuals and families opting to cook and eat at home versus restaurant dining, putting such companies as Pampered Chef, The Cocoa Exchange, and Tupperware in an ideal position to cater to the needs of at-home cooks.
The direct selling industry was built for precisely this type of climate. Now, moving forward, it is a matter of combining the knowledge and experience direct selling businesses already have with the tools and resources that can serve to keep them at the top of their game.
The key moving forward really is going to be to understand how the sales landscape, in general, has been impacted and then adopting that which makes communication and interactions between the headquarters, field leaders, distributors, and customers far easier.
Navigating Post COVID-19 Reality as a Direct Seller
Full featured back office software. COVID-19 highlighted a number of problems plaguing every company. And even when it comes to direct selling, the ability to quickly and easily check in on personal sales, team sales, customer details and order statuses has been somewhat thrown off. Beyond helping centralize everything, back office software also enables companies to gain deep insights via the data collected; this in turn enhances further training opportunities by way of allowing companies to deliver personalized learning based upon distributor performance.
Effectively onboard new distributors. What many direct selling companies have had to contend with over the past couple of months is figuring out how to optimize the onboarding experience. Given that uplines no longer had the ability to communicate in person with newly recruited downlines offline, it became more important than ever to have a platform in place that served as a centralized hub for information regarding the company, its products, business building strategies, and compliance requirements. Again, it is all about having that individualized welcoming experience and thereby ensuring a seamless transition.
Train existing distributors. The virus without question changed the way in which consumers thought about products and consequently bought those needed products. Here is where it is crucial for companies to be able to introduce and train existing distributors in regard to new product lines, social selling strategies as well as business building methods in general. Because of digital transformation, successful direct selling businesses have consistently been able to deliver learning and business building opportunities unimpeded by a pandemic. With marketing and sales training in particular, having the right tools able to deliver each distributor the necessary marketing assets and the latest information regarding products and about-to-be launched campaigns really has kept direct selling efforts moving forward.
Engage distributors with data-driven rewards and recognition. Motivation is key for distributors—particularly when any sort of face-to-face recognition, not to mention, more large scale gatherings and celebrations of personal achievement are not possible. Having the tools which provide real-time data regarding personal sales numbers and relevant goal metrics thus enables companies to automatically recognize and reward at scale. All part of data-driven gamification, such tools allow for the use of leaderboards, badges and points for instance, besides the traditional product rewards, and this kind of encouragement during a period of lockdown really does make a difference especially with so many direct selling annual conventions canceled this year.
Streamlining communications. For those who already had the appropriate communication channels in place prior to the virus, they were able to stay ahead of the game. From email groups to the right support for push notifications, many direct selling companies have still managed to effectively provide just-in-time compliance, marketing and sales training throughout the crisis. Communicating and supporting the field at a time of crisis was one of the key differentiators that distinguished those companies who managed to stay right on top of things. This has resulted in almost twice better distributor retention in the past months.
What The Future of Direct Selling Looks Like
Given the current situation, direct selling has actually seen something of a renaissance. Reactivated distributor numbers have grown significantly over the past couple of months as has the number of new distributors. People are looking for new sources of income for a variety of reasons, and this is an industry that has proven time and time again that it can hold strong and survive even more turbulent economic cycles. As the country starts to reopen and strives to return to something resembling “normal,” direct selling is certain to continue this upward trajectory and by grabbing the digital transformation bull by the proverbial horns, this sector is most definitely going to thrive.
READ MORE HERE: www.rallyware.com