trends

The team at Ideal and c-Systems software released its annual OPE Trends Report this fall ; it ’ s titled “ Turf , Tech & Trends .” The group compiles the report after studying data from 100s of dealers across North America . It addresses industry performance over the year , and discusses trends predicted to impact business for OPE dealers in the year ahead .

In our two-page story here , we look at the 28-page report , plus our own data from dealer surveys , industry reporting , discussions with manufacturers , and current economic analysis . Ideal breaks its trend report into three main focus areas . They are Changing Market Conditions , Service Profitability , and Digital Business .

We ’ re going to focus our story on that first chapter . You can find a link to Ideal ’ s complete Turf , Tech & Trends report on our website , or idealcomputersystems . com / report .

Changing Market Conditions

In this broad category , Ideal looks at dealership inventory , consumer financing , and manufacturer product trends – namely electric equipment . They kickoff this topic by citing their own survey data that shows 71 % of North American power-equipment dealers they surveyed said their biggest challenge in the year ahead is “ decreased consumer spending .”

Which leads to the discussion of inventory . Ideal cites Scott ’ s Power Equipment , Inc . which said , “ Manufacturers and distributors were so short on equipment from Oct 2022 to May 2023 . Then they tried to load dealers up . This could lead to rebates and selling at lower margins as dealers will now try and get rid of excess product and product that will be coming due on floorplan .”

In our own OPE Business Q3 Dealer Survey , one dealer commented , “ We have to go back to selling instead of taking orders . It is going to be a tough 2024 with manufacturers being now overstocked with equipment . We are going to have to stay on top of the rebates and promotions and work every deal .”

Inventory Levels

Nearly half ( 47 percent ) of dealers we surveyed in Q3 said “ inventory is too high .” We ’ ve talked with a few equipment manufacturers who acknowledge the inventory issue . “ As OEMs , we got caught up with so much demand , and we couldn ’ t get dealers enough product ,” said Angela Raddant , director of aftermarket for AriensCo . “ We all got caught up in that . The market changed so suddenly . At

We visited the Echo headquarters last summer and saw a warehouse full of power equipment to fulfill dealer orders nationwide .

Ariens , we are doing our best to stand behind our dealers and help them move product .”

Ariens is not alone . We heard the same from Toro when it reported “ a sharp and accelerated reduction in homeowner demand for residential and professional segment lawn care products ” in its fiscal third quarter financial news . In that same release , Toro CEO Richard Olson added , “ We believe the combination of macro dynamics and weather patterns this year has exacerbated the rebalancing of homeowner demand for lawn care solutions in both of our residential and professional segments , which has resulted in elevated dealer field inventories of those products ….”

Economic Outlook

According to the U . S . Census Bureau , “ inventories of manufactured durable goods in October , up three consecutive months , increased $ 1.5 billion or 0.3 percent to $ 525.1 billion . This followed a 0.1 percent September increase .” The category called “ durable goods ” includes products that can be inventoried and that have an average life of at least three years , such as motor vehicles , furniture , and power equipment . Economists track durable goods sales and inventory as one indicator of economic activity .

While overall retail sales in the U . S ., for Q3 2023 , rose at an 8.4 %

18 OPE Business December 2023 www . OPEBusiness . com