The Specialty Market Holds Steady
July 29, 2021—2020 was a year for the books. And while nearly every business sector was thrown for a loop in the wake of COVID-19, some fared better than others.
And for the specialty equipment market, 2020 bought unexpected good news. Despite a predicted sales downturn and the volatility of an economy fast adapting to pandemic trends, retail specialty equipment sales grew to $47.89 billion in sales—up 3.7 percent compared to the previous year, according to the Specialty Equipment Market Association (SEMA) 2021 SEMA Market Report.
Even better? The future is looking bright with more growth anticipated in the years to come. SEMA forecasts that sales could hit $49.38 billion by the end of 2021 and reach as high as $55 billion (an 11.7 percent bump) by 2024.
For more insight and takeaways from the Association’s 92-page report, Ratchet+Wrench checked in with Gavin Knapp, SEMA’s director of market research.
SEMA was not anticipating sales growth in 2020. Where and when did that growth kick in?
When we worked on our report in 2020 we could never have imagined the specialty equipment market would see actual growth. In fact, in our last market report, we forecast there would be some contraction in our overall market size
But something interesting happened in the second quarter of 2020. It was a devastating time for the entire U.S. economy, but unlike other types of recessions, we saw sales and consumer spending roar back in Q3.
Auto parts were deemed a necessary business so it wasn't subjected to business closures and consumers were spending a lot of money in our marketplace. It was something that a lot of people could do right there at home in their garage, so consumers really got to work spending extra time, money, and efforts to personalize their cars.
Why do you think this growth could have staying power?
Obviously, there’s still so much change and transition taking place in the economy right now and undoubtedly there’s more to come. But the specialty market has a bit of a tailwind and there’s a lot of momentum built up for those who are accessorizing and modifying their vehicles over the last year and a half that could help sustain us.
And as people go back to work, they’ll be getting back in their car. They’re also starting to travel again with a good deal of those travelers planning car trips rather than air travel or other modes of transportation. The more those folks are utilizing their cars, the more that can provide a boost for accessorizing and modifying those vehicles, because people want to personalize, customize, or even improve the functionality of their car as they're commuting or adventuring. Those are factors that will keep us buoyed
What are the factors that could shape that future growth?
In terms of products, we saw steady growth across almost the market’s entire range of products over the last year. But where we’re seeing a shift is in the changing vehicle landscape.
Automakers are no longer making as many traditional sedan-type vehicles. They’ve shifted to producing more crossover vehicles or CUVs and we’re seeing growth with CUVs both in sales and the number of them on the road. And this last year, we saw a real jump in the uptake of customers that are accessorizing and modifying those CUVs.
That’s an important shift for the industry to keep an eye on because there are so many of those crossovers on the road now and the flexibility in what they can do really opens things up for how customers will use and personalize them.
Are there any other trends you expect to pick up speed?
Online shopping. The specialty equipment industry has been ahead on those e-commerce resources in comparison to a lot of other sectors, and we’ve seen that even if customers are ultimately buying in the store, they’re going online first to what out what products are available, what the specs are, pricing, etc.
We shopped online more than ever before last year as we move into whatever can be called normal going forward we want repair professionals to be very cognizant that online sales are not going away. It doesn't mean that people won't come into your store. But it means people will likely be looking online at some point in that process. I’m always pushing to make sure you've got an online presence and that that presence looks up to date, because in this day and age, largely that’s how people are going to find you. That's the best way to drive traffic into your shop, even if you're not doing online sales.