CHANGE AGENTS

Some forces OPEAA singles out as being among the most significant drivers of change in the OPE industry over the next five years include:

Consolidation among retail dealers leading to a split in the industry, with a few large, well-managed dealerships on one side and many small, one-person operations surviving on low overheads on the other. OPEAA projects a 50 percent reduction in the number of current dealers over the next five years or so.

Consolidation by original equipment manufacturer (OEM) organizations, a trend that to date has manifested itself in OEM companies buying down the distribution channel. "OEM organizations are re-thinking their distribution strategy and the value of aftermarket companies," the OPEAA strategic plan states. "As OEMs buy up family-owned businesses in the industry, they bring a corporate mentality toward money, market share and control, which is changing the face of the industry."

Big-box retailers are continuing to expand, forcing OEMs to build to price points, increasingly offering the high-volume parts to their customers and generally shaping the retail environment.
Throw-away values in society appear to be increasing, leading to a preference for replacement instead of repair. This is being fostered by OEM designs for products that cannot be repaired at costs low enough to make replacement unattractive.

While that seems to paint a pretty dismal picture for small operators in the OPE industry, they do have at least one factor weighing in their favor, and it's a critical one.

"The one big factor that consumers love about independent operators is service after the sale," says a spokeswoman for the Service Dealers Association, a trade organization for companies such as Croft's.

"Anyone who has bought equipment from a large retailer or discount chain knows that most do not service the equipment, even if it is under warranty," she points out.

"Local service dealers, however, not only provide service on the equipment they sell, they also provide the tune-ups and off-season maintenance that add years to the life of outdoor power equipment."

That positioning represents a key competitive advantage for independent OPE dealers. Croft has relied on it since he started his business, and for a number of years it was enough to keep his company afloat.

However, the trends identified in the OPEAA strategic plan are only going to intensify. Indeed, several of them have already become markedly more pronounced, leading Croft to conclude that just sitting on the status quo was no longer a viable formula for success.