We think that (consolidation) trend is only going to accelerate in the future, says John Schmeiser
Things have changed down at the local farm machinery dealership. It s impossible not to notice. If the dealership is still there, everything from the building on the outside to the services and the range of products being sold on the inside is much different now than a couple decades ago.
So are the people. Odds are that your local dealership is now one of a chain of outlets under a corporate structure. The mom-and-pop, one-store dealership with the owner behind the counter is rapidly becoming a thing of the past.
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The transition to multiple-store dealer networks in the retail farm machinery sector is gaining momentum, and that isn t likely to change. We think that trend is only going to accelerate in the future, says John Schmeiser, executive vice-president and CEO of the Canada West Equipment Dealers Association (CWEDA). The reason is, our dealerships are becoming more professional because our customers are becoming more professional.
Because machinery is getting so complex, full-line farm machinery manufacturers now employ product specialists to market individual machine types, and dealers are finding they need to adopt the same strategy to retail the equipment to producers.
In today s dealership, one salesperson can t properly represent all of a manufacturer s lineup any more than one mechanic can be an expert on all the different designs.
Technology has come into farming in a big way, says Brian Taschuk, chief operations officer for the Rocky Mountain Dealerships network based in Calgary. In the past a dealership owner could go out and educate a farmer on how to use the equipment. Now, we have separate GPS, harvesting and application experts. You need the scale to have all these extra resources.
Scale is something Rocky Mountain has in spades. The publicly traded company now operates 25 outlets across the Prairies, making it a giant in Canadian farm machinery retailing. Its growth has been breathtaking, doubling its number of outlets in just two years.
But can dealership chains, especially those as large as Rocky Mountain, continue to grow? How big is too big?
Farmers themselves will decide those questions. After all, the most important job for any local outlet is still to make farmers want to drive onto the lot.
How they ll get you in their doors
I think the farmer wants to be able to walk into the dealership and have somebody there that can make a decision, says Taschuk. It s an expectation any dealer network must meet, he feels, or it will risk losing its customer base.
Farmers will also make their choices based on the shop. And while some dealer chains have cut back on the services provided at a few of their small-volume locations, Taschuk thinks the most successful networks will be those that maintain full-service outlets.
It s all about establishing the proper relationship with producers. In fact, relationships is a word that comes up in nearly every conversation with anyone who retails farm machinery. Dealerships need to be able to show to customers the value they add in a relationship, says Dennis Hann, New Holland s regional sales director for the mid-states region. That challenge applies to all dealers, no matter what size they are.
A multi-location dealership that has found a way to maintain a close relationship with customers is very successful, says Hann. But what we see is at times they run the risk of losing touch with the grassroots to know the farmers first names. We see that personal relationship as still critical.
Taschuk says Rocky Mountain has ensured that won t happen in its supersized dealer network. To avoid the problem, they established semi-autonomous regional management teams. Managers of individual stores or of small groups of stores are free to exercise broad control over their own operations as long as they work within overall guidelines.
