Study: Harley-Davidson Rules Retail

by , May 7, 2012, 8:00 AM
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Harley-Davidson-BIt's spring, and that means while some people are disrobing to worship the sun, others are donning their riding gear and rolling their motorcycles out of the garage. It also means that people who have always toyed with the idea of buying a first bike, or getting a new one, are heading to motorcycle dealerships to ogle and maybe buy.

Motorcycle prospects, like car shoppers, study the products online before going to retail. But the similarity ends there, says Fran O'Hagan, president and CEO of Pacific Grove, Calif.-based auto market research firm Pied Piper Management Co., LLC. 

"In the car industry, unless a dealership is really terrible, how good or bad the dealer is hasn't got that much to do with how many cars you sell," he says. "But the same is absolutely not true for motorcycles. For motorcycles, what the dealership does translates directly into how successful they are." 

Harley-Davidson has proven that in recent years, with big sales gains paralleling a huge focus on retail experience. According to Pied Piper's yearly Prospect Satisfaction Index for the U.S. motorcycle business, Harley-Davidson is number one at retail. In the study, conducted between July 2011 and April 2012 using 1,653 hired “mystery shoppers,” BMW and Ducati finished in a tie for second, followed by Triumph and the Victory and Indian brands from Polaris Industries, in a three-way tie for fourth. 

The firm said Harley-Davidson dealerships led all brands in 16 different sales activities such as offering test rides, obtaining contact information and asking for the sale. Twelve different brands led at least one sales process category: Ducati, Husqvarna and Triumph dealerships were twice as likely to offer a brochure to shoppers than dealerships selling Suzuki, Honda or Kawasaki. Similarly, Harley-Davidson, BMW and Ducati dealerships were twice as likely to ask for contact information than dealerships selling Husqvarna, MV Augusta or Moto Guzzi.

Pied Piper reported that the entire industry improved, with 80% of the individual sales process factors improving on average. This year versus last, salespeople were 14% more likely to provide compelling reasons to buy from their dealership; 13% more likely to ask for the sale; and 11% more likely to provide compelling reasons to buy now. Only 3 of 16 motorcycle brands failed to achieve higher scores in the latest study versus last year's. But O'Hagan points out that because of the fact that Harley-Davidson has the preponderance of U.S. motorcycle share, the industry-wide improvement inordinately reflects Harley's own improvements.

O'Hagan also says the brands with the biggest improvements in retail satisfaction in the Pied Piper study are also the ones that have most-improved sales performance in recent years. "If you look at market share gain and loss today versus three years ago, Ducati, Triumph, Indian and BMW have all improved, and Harley-Davidson has kept its share." 

In the study, Honda, Yamaha, Kawasaki and Suzuki fell below the industry average for prospect satisfaction, although all but Suzuki improved. One might argue that the Japanese brands are hindered by multi-brand dealerships, making it harder for them to have a distinct retail presence, but O'Hagan says that's not really the issue. "Five years ago, Ducati had a forgettable presence and the fault of that lay with Ducati, not the dealers," he says. "Over several years they fixed their problems and the dealers came on and improved the way they sold. And Ducati is mostly in dualed [multi brand] dealerships." 

O'Hagan also points out that the top-scoring retail brands also make a big commitment to their brand presence at shows. "In December, I went to the Long Beach Motorcycle Show, which is a big deal on the West Coast. If you were a layperson wandering around there, you would come to the conclusion that the big, heavy-hitter brands were Victory, Triumph, Ducati, Harley-Davidson and BMW. I found that striking."

By contrast, he says, Japanese brands have traditionally focused on their product lines as brands. "They have pretty comfortably focused only on product, for years. But I would say that if you talk to people who work for them today, they know what's up."

2 comments on "Study: Harley-Davidson Rules Retail ".

  1. Adam Hartung from spark partners
    commented on: May 7, 2012 at 12:35 p.m.
    Yet, look at volume and you'll see Honda remains #1, and all the Japanese companies significantly outperform these small-share competitors you mention. Does that mean overall "retail experience" is relatively unimportant to market success?
  2. Ed Malley from Independent Investor
    commented on: May 7, 2012 at 3:31 p.m.
    Honda may be #1 globally, where motorcycles are more often sold as transportation commodities, and they used to be #1 in the U.S., but those days are long gone. Today Yamaha and Kawasaki both sell more streetbikes in the US than Honda, and H-D sells 4 times as many as Honda. Those brands that used to be only "niche" BMW, Duc, Triumph are still smaller than the Japanese, but they've doubled their share while the Japanese share has shrunk.

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