The IDS RV Industry Trends Report is a comprehensive overview of what dealers will be focusing on in 2023. This report compiles insights from surveys, RV industry experts, and hundreds of RV dealers across North America to highlight what dealers can expect in the year ahead.
RV There Yet? RV Dealership Industry Trends Report
FOREWORD FROM THE GENERAL MANAGER
FRANK TAMBURRINI General Manager, IDS
In the age of digitization, there's a common misconception that the surge of advanced solutions might overshadow the irreplaceable value of human interaction. But the reality of the modern RV dealership world tells a different, more compelling story. It's a narrative where technology and human touchpoints are not at odds but complementary. Whether it's the service technician who remembers the tweaks he made to an RV last summer or a salesperson who knows you have three kids and suggests a model with bunk beds – technology amplifies these personal moments to ensure that the customer never feels like just another number. The future of RV dealerships isn't about choosing between technology and human touch—it's about harnessing the strengths of both. In our 2024 RV Industry Trends Report , we've distilled these very principles, shedding light on the optimal balance between technological innovation and genuine human connection.
What’s Trending in 2024
1. Steering Through the 2024 RV Market Landscape Setting the Scene Navigating the Financial Landscape The Inventory Balancing Act 2. Diversifying Your Revenue Streams More Service Work on the Horizon Accessories as a Profit Center Financial and Insurance Services: Simplifying Ownership 3. Digitally Enhancing the Customer Experience Who Should You Sell To? Mobile-Friendly Is Now Mobile-Mandatory Building Customer Trust Through Dealership Cybersecurity
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01 Steering Through the 2024 RV Market Landscape
Setting the Scene Navigating the Financial Landscape The Inventory Balancing Act
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The Financial Landscape
Balancing Your Inventory
Growing Interest in Non-Motorized RVs
With the increase in costs, consumers might become more selective in their spending. They may delay their RV purchases or opt for less expensive alternatives, such as smaller or used models. Dealers have the opportunity to collaborate with lenders to offer flexible and attractive financing solutions. This could involve providing longer-term loans, balloon payments, or even offering in-house financing options.
There's been a significant decline in RV shipments from 2021 to 2023, with a slight increase expected in 2024, indicating market adjustments. Due to some manufacturers extending the '22 model year, dealerships might find themselves with inventory from three different model years ('22, '23, and '24) at the same time, complicating their sales strategies
Trailers, fifth wheels, and camper trailers are seeing an increase in demand due to their affordability, ease of maintenance, and the wide variety of options available. The surge in interest for basic trailers, especially bunk models for families, suggests consumers are valuing simplicity and cost-saving options over more luxurious offerings.
Setting the Scene
By 2030, the global RV market is projected to grow from 48.26 billion in 2023 to 63.65 billion by 2030. This trajectory suggests that as we roll into 2024, we can expect continued growth in the market size to surpass the $50 billion mark. But there’s more to the story. Regular travel costs are going up – like plane tickets, car rentals, and hotel stays. This is when owning an RV starts to make a lot more sense to consumers and can actually be a smarter financial move.
As the cost of living increases, I believe we will see people gear towards living in trailers, even more so than our current client base.
KEVIN REINHART Tom Schaeffer’s RV
More than ever, selling an RV isn't just about the vehicle; it's about selling a lifestyle. The freedom of the open road, the ability to work and live anywhere, and the embrace of sustainable living are powerful narratives that dealers can harness.
Navigating the Financial Landscape The aggressive interest rate hikes , which marked a significant pivot from the accommodative stance in previous years, are set to reshape consumer behavior and purchasing patterns. It's a change that signals an attempt to control inflation and stabilize the economy after periods of uncertainty.
In an IDS survey of RV dealerships across North America , almost 60% said rising product prices would be the biggest challenge they anticipated facing in 2024. While 2024 is anticipated to be a better financial year, dealerships need to brace themselves for the immediate effects on consumer spending habits these hikes might inflict on the RV market.
What are some of the biggest challenges you expect to face in the year ahead? Check all that apply.
Other (please specify)
Hiring / retaining talent
Attracting new customers
Rising product prices
What This Means For Dealers:
• Effects on Purchasing Power: Higher interest rates mean higher financing costs. This might deter potential buyers, especially those considering loans or credit purchases for their RVs. • Consumer Prioritization: As costs go up, consumers might be more discerning about where they spend their money. They may delay purchasing an RV or opt for cheaper, smaller, or used models. • Financing Options: Dealers can work with lending institutions to design flexible and attractive financing options or in-house financing options. Consider longer-term loans or balloon payments.
The Inventory Balancing Act Navigating the ebb and flow of inventory is not a new challenge for RV dealers, but recent market fluctuations have made this aspect of the business particularly vital. Now, as the RV market progresses toward a normalized production phase, a new landscape emerges that requires strategic management and foresight. The question on everyone’s minds now – what does "normal" look like?
Some data points from RVIA reflect this trend:
In 2021, shipments hit a record 600,000+ units. In 2022, a decline to 493k units was observed.
For 2023, the figures settled in the 300,000-RV range. Projections for 2024 expect a slight increase to the mid-300,000 range.
This drastic reduction from previous years points toward a stark reality: over 250k units fewer in the market, which can be attributed to varying market conditions and excess inventory in some dealerships.
Another factor to consider here is the "age" of the inventory.
Some manufacturers still have 2022 models in their active inventory. They opted against the usual model change during the mid-year of 2022, thus extending the '22 model year. Consequently, dealerships may find themselves in a unique scenario – hosting three different model years ('22, '23, and '24) concurrently on their lots.
What This Means For Dealers:
Growing Interest in Non-Motorized RVs Consumer-friendly pricing is driving demand for trailers, fifth wheels, and camper trailers, seeing a rise in adoption due to their cost-effectiveness and simpler maintenance. They offer a diverse product range with varied pricing options compared to motorhomes. Eco-Conscious Add-Ons As the world becomes more environmentally conscious, there's a heightened interest in off-grid add-ons. Customers are seeking solar panels, inverters, and other sustainable solutions, but the key here is affordability. People want eco-friendly solutions without the hefty price tag.
In an IDS survey of RV dealerships across North America , a combined 37% of respondents noted an increase in demand for eco-friendly RVs. If the current trend continues, manufacturers and dealers might see a greater push toward RVs that are cost-effective, energy-efficient, environmentally sustainable, and other green innovations
Have you noticed an increasing demand for eco-friendly RVs or sustainable features among your customers?
Yes, there is a significant increase in demand Yes, there is a slight increase in demand No, there is no noticeable increase in demand Not applicable, we do not sell eco-friendly RVs
Simplicity and Savings There's also growing demand for affordable, basic trailers. In particular, bunk models are seeing a surge in interest, especially for families . This trend suggests that while the RV lifestyle remains appealing, many consumers are prioritizing simplicity and budget-friendly options over luxury.
02 Diversifying Your Revenue Streams
More Service Work on the Horizon Accessories as a Profit Center Financial and Insurance Services: Simplifying Ownership
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Increase in Service Work
Boost Revenue with Accessories
The surge in RV sales in past years points to growing future demand for repair and maintenance services. The ability to handle work orders promptly and maintaining a low Repair Event Cycle Time (RECT) will be vital for service departments' success. Dealers can differentiate their offerings and retain customers with mobile service options and post-service benefits.
Dedicate individuals or teams for accessory sales to provide customers with expert recommendations and improve sales efficiency. Instead of reactive selling (where salespeople pitch accessories in response to customer queries), try proactive selling (where the dealership suggests valuable additions).
Even with a dip in 2023 sales revenue for the average RV dealership, the overall trend since 2017 remains positive, suggesting that short-term challenges don't necessarily imply a long-term downtrend. To capitalize on consumer willingness to finance RVs, dealerships should offer competitive interest rates, flexible payment options and form partnerships with a variety of financial institutions.
More Service Work on the Horizon Recent years have witnessed an uptick in RV sales, thanks to changing travel trends, with more people preferring road trips and personalized vacations over traditional holiday packages. This influx of new RV owners translates to a large demographic that will inevitably need maintenance and repair services in the coming years. How efficiently you manage Work Orders and your Repair Event Cycle Time (RECT) becomes even more critical to the success of your service department.
RECT Quick Tips
What is it? RECT is the time it takes from the beginning of a Work Order to its completion. It provides insight into how fast a unit is repaired at a dealership. Factors: Warranty coverage and out-of-stock parts are the main factors that can affect your RECT. Why Measure RECT? If you don’t measure it, you can’t manage it. Breaking down each part of the Work Order allows dealerships to pinpoint areas of improvement. Techniques like setting up triage teams expedite Work Orders, ensuring units are serviced promptly.
BONUS: Analyze your RECT averages nationally and regionally with IDS’ monthly Dealership Industry Insights Report . Aim to be below your region’s average to ensure your dealership is competitive.
What Can Dealers Do?
• Tech Upgrades: An all-in-one Dealership Management Software can help streamline appointments, manage parts inventory, and ensure seamless communication between teams. • Technician Training: Invest in regular training, both in-house and externally, to ensure your staff remains up-to- date. A well-trained staff can be a significant profit-maker and pivotal in retaining customers, as highlighted by RV Business . • Mobile Service Options: Consider offering mobile services where technicians visit the customer's location for minor repairs and maintenance. This can alleviate some pressure from the service bays and offer a convenient solution for customers. • After-Service Benefits: Offering benefits like a free vehicle wash or internal cleaning post-service can incentivize customers to choose your dealership for their service needs.
Accessories as a Profit Center The desire among RVers for customization and enhancement is a golden opportunity for dealerships to tap into an additional revenue stream: parts and accessories . When managed effectively, accessory sales can become a robust profit center in their own right. By separating it from the primary RV sales, you can get a clearer picture of the segment's performance, allowing for better inventory management, pricing strategies, and marketing campaigns. The Need for Specialization: • While traditionally accessory sales have been bundled with the RV sales process – managed by the salespeople themselves – there’s something to be said about having a edicated individual or team solely responsible for accessory sales.
• This specialization ensures that customers get an expert's insight, one who understands the intricacies of RV accessories and can provide tailored recommendations.
• A dedicated accessory salesperson can guide the customer through a list of essentials and enhancements, ensuring that their RV is ready to hit the road from day one.
Are your service writers struggling?
That’s why we created IDS ServiceCRM: • The first-ever customer communication automation tool designed specifically for service teams. • It keeps all service appointments and tasks in one place, so no customer communication falls through the cracks. • Your team can also send direct or automated text messages to customers to keep them up-to-date on the status of their unit… and more!
Integrating Into the Sales Process:
When a customer walks into an RV dealership, they're not just looking for a vehicle; they're seeking an experience. Offering a holistic solution, wherein the customer is presented with not just the RV but also an array of accessories that enhance that experience, adds immense value. This approach changes the game from reactive selling (where salespeople pitch accessories in response to customer queries) to proactive selling (where the dealership suggests valuable additions). As per RV Trader's insights , a significant portion of RV owners and enthusiasts look to personalize or upgrade their vehicles. By expanding their parts and accessories department, dealerships can cater to this demand.
Whether it's RVers looking for minor updates or those aiming for a complete overhaul, having a comprehensive inventory can turn these enthusiasts into loyal customers. This diversification strategy also appeals to the DIY segment of RV owners.
Enhance Service Efficiency with IDS Parts Request Manager: • Send parts requests directly from a mobile device or web browser. • Ensure teams stay updated and miss no critical information. • Receive instant push notifications for: • Parts ordered • Parts received • Added comments, and more • Reduce communication gaps and streamline back-and-forth interactions between teams.
Financial and Insurance Services: Simplifying Ownership
In an IDS survey of RV dealers across North America , a significant 75% said that bank financing is the option most commonly used by customers, followed by cash purchase at 50%. With a considerable percentage of RV buyers leaning towards bank financing, there's a clear opportunity for dealerships to step in and simplify the buying process. By partnering with financial institutions, dealerships can provide tailored financing options on the spot.
What financing options are most commonly used by your customers?
Other (please specify)
In 2023, the average sales gross profit declined, reducing to about $3760 per unit from the 2022 average of $7210. In percentage terms, this profit has almost halved, going from 13% of the selling price to just 7%. On the flip side, the F&I department’s performance remains high, with a profit margin per unit at 7% of the average selling price. This is consistent with last year’s figures. However, F&I now contributes 50% of the total gross profit for each RV sale. The continued growth in finance penetration, even amidst rising interest rates, is particularly noteworthy. At over 62%, this suggests that consumers are still willing, or even keen, to finance their RV purchases, providing an excellent avenue for the F&I department to increase its profits. DON MILLER Senior Data Consultant, IDS
Figure 1. First Half Average Dealership Revenue by Year
$16M $14M $12M $10M
$8M $6M $4M $2M
Figure 1 shows that sales revenue in the first half of 2023 is down 18% compared to the first half of 2022 and down 22% compared to the first half of 2021. However, in the broader context, the growth in sales revenue since 2017 has been positive, with 2023 still performing better than 2018, 2019, and 2020. This means that while there might be short-term challenges, the overall trend remains positive. Leverage the Finance Trend The willingness of consumers to finance their RVs, even with higher interest rates, provides a ripe opportunity. Offering competitive rates, flexible payment options, and partnering with a broader range of financial institutions could further boost F&I profits.
Dealership Industry Insights by IDS is a monthly report that includes:
• The impact “out of stock” parts and “warranty coverage” have on repair cycles • Top Work Orders for each service bottleneck • RECT of your dealership’s top brands • Delivery (or lead) times of top vendors • Unit sales vs. the previous year • F&I insights
03 Digitally Enhancing the Customer Experience
Who Should You Sell To? Mobile-Friendly Is Now Mobile-Mandatory Building Customer Trust Through Dealership Cybersecurity
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Diverse Demographic of New RVers
Optimizing Your Website
Dealership Cybersecurity Builds Customer Trust 41% of RV dealers express concerns about potential cyber threats to their digital infrastructures.
Families with young kids: prioritize safety, easily cleanable interiors, and onboard entertainment. Millennials/Gen Z: Seek tech- friendly features, environmental consciousnesses, and spaces suitable for remote work.
Ensure your website loads quickly, displays properly, and is easy to navigate on mobile devices. Modern consumers appreciate online functionalities such as service bookings, digital payment options, and personalized post-purchase engagements.
Consider allocating about 10% of your IT budget towards cybersecurity measures. Transitioning to cloud solutions, like IDS Cloud, provides dealerships with fortified data storage, assuring not just enhanced security, but reflects your commitment to customer safety in the digital age.
Dealers should focus on enhancing their post-sale
service offerings, because these newer demographics might not be as adept with RV repairs.
Who Should You Sell To? According to an IDS survey of RV dealers across North America , the demographic that has shown the most interest in buying RVs recently are Families with Young Children at 34%, followed by Millennials/Gen Z at 28%, and then Retirees at 25%.
What demographic has shown the most interest in buying RVs recently?
Other (please specify)
Families with young children
Millennials / Gen Z
The new RV enthusiasts aren't just retirees, but a colorful mix of families with young children, spearheaded by Millennials and Gen Z. With a diverse set of new RV enthusiasts comes a varied set of expectations and needs. The younger and more diverse set of customers are often less experienced in handling minor repairs and fixes.
What This Means For Dealers:
• Families with young kids might prioritize safety features, easy-to-clean interiors, and entertainment systems. • Millennial or Gen Z travelers might be looking for tech-friendly amenities, eco-friendly features, and spaces designed for both work and leisure, reflecting the rise of remote work and the digital nomad lifestyle. • Given the less handy nature of the newer demographics, dealers could bolster their service and post-sale offerings.
Mobile Friendly is Now Mobile Mandatory With more consumers accessing websites via smartphones and tablets, the importance of mobile optimization can't be stressed enough. The modern consumer often begins their research on a mobile device, making their first impression of a brand or product from their phone.
• A site that loads quickly, displays correctly, and offers a smooth user experience on mobile devices isn't just good practice—it's a business imperative. • Similarly, your website should be easy to navigate, have quick load times, and clear calls to action. • Offer your customers online service bookings, digital payment options, and personalized post-purchase follow- ups.
The modern customer seeks continuity. They want the ease of booking services online, the flexibility of digital payment methods, and the reassurance of personalized post-purchase interactions. This ongoing relationship, facilitated through digital channels, forms the core of brand loyalty and repeat business. In an IDS survey of RV dealers across North America , 53% noted that the most notable change they’ve observed in their customers' expectations for RV service and maintenance is increased demand for faster service turnaround times. The world has become accustomed to instant gratification, thanks to on-demand services and next-day deliveries. The RV industry is no exception.
3 % 3 %
Have you observed any changes in customer expectations regarding RV service and maintenance?
Increased demand for faster service turnaround times Increased demand for mobile or on-site service options No significant changes in customer expecations Not applicable, I'm not involved in RV service Other (please specify)
Personalized Email Marketing to Customers
How IDS Engage Helps Personalizes Emails • Utilize insights from your DMS data to craft sincere and relevant messages. Authenticity is key to trust-building. • Deploy automated service reminders and feedback surveys to show customers you’re genuinely invested in their experience, valuing their feedback and ensuring their RV journey remains smooth. • With prebuilt, mobile-responsive templates, you can promote deals and offers that genuinely cater to your customers’ needs. Such targeted, relevant promotions further underline your commitment to serving the customer's best interests.
Email is an enduring mode of communication that provides an intimate channel to build and sustain this trust. But as with any intimate dialogue, the success of email marketing rests largely on its relevance, relatability, and resonance. This is where personalization becomes critical with a tool like IDS Engage.
Building Customer Trust Through Dealership Cybersecurity As the world moves into a more connected era, the threats of cyberattacks and data breaches loom larger, making cybersecurity a paramount concern for businesses of all sizes and types. It’s easier for attackers to find and exploit vulnerabilities in on-premises servers than it is for Cloud . Many in-house on-premises systems might only have two physical servers that can help each other if one breaks. By contrast, a Cloud provider can easily move their computer servers between their data centers if something goes wrong. 16 % 6 %
How concerned are you about potential cybersecurity threats to your dealership's digital infrastructure?
In an IDS survey of RV dealers across North America , an overwhelming 41% stated they were concerned about potential cybersecurity threats to their dealership’s digital infrastructure.
Extremely concerned Concerned Neutral Not concerned
What This Means For Dealers:
Your dealership has a lot of data on hand, from customer information to inventory information. You use data to: • Target and acquire new customers • Sell and service specific things to customers • Retain and possibly increase products and services adopted by customers
Reacting to a Cybersecurity Breach
1. First , identify the breach's scope and isolate the compromised systems to prevent further spread. 2. Second , engage with a cybersecurity firm to understand the nature and extent of the breach. They can guide you on the best remedial steps and how to safeguard against future attacks. 3. Third , inform stakeholders, be it employees or customers, about the breach. Being transparent can help maintain trust and showcase the company’s commitment to addressing and rectifying the issue.
More than that, mobile phones, tablets, laptops, and computers store and process incredible amounts of data, so you shouldn’t overlook or minimize your dealership’s cybersecurity measures. As a rule of thumb, companies should spend about 10% of their IT budget on cybersecurity, including employee training. A significant trend among RV dealerships in their bid to bolster cybersecurity is the move to cloud solutions. With IDS Cloud , your data isn’t just stored; it's fortified. By keeping it in a remote, highly secure facility, dealers can access their data anytime, anywhere, ensuring agility and flexibility in their operations. The core of building trust in this digital age lies in ensuring the safety of consumers in the vast cyberspace. A secure digital foundation not only shields your dealership from cyber threats but underscores your commitment to customer safety.
"ARE WE THERE YET?" It's a question often echoed from the backseats of RVs on long journeys. It’s also a reflection of today's dealerships as they navigate the evolving terrains of the industry. In the face of rapid technological advancements, the destination is not about sidelining the human touch for digital solutions – but rather harmonizing the two. When we find the perfect balance between efficiency and emotion, data and desire – that's when the RV dealership of 2024 truly thrives. The RV dealership of 2024 isn't just selling vehicles; it's crafting relationships, fostering trust, and ensuring every customer feels valued and understood.
So, our fellow readers, rev those engines, sync up those systems, and never forget the heart that makes each journey memorable.
Here's to blazing trails, both online and on the road, in 2024 and beyond!
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