Excerpt from the magazine: Everything has changed

0

This era has often been labeled as the age of instant gratification. You can get answers to questions with just a few clicks on your smartphone. You can also do the same to have food delivered to your doorstep – and anything from clothes to photo frames to car accessories – in no time.

People want what they want now – and they can often get their wish granted.

But auto repair is different from fitting a new picture frame. This industry hasn’t traditionally delivered things instantly – and if you ask some store owners, never fast enough to begin with. But it’s also an industry where e-commerce hasn’t taken off like everyday household items. And for good reason: sometimes you need the expertise of a spare parts expert.

And it is in this world of online selling that resellers face risks in the way their business is conducted. As more and more stores and retail customers prefer to use a few clicks of a mouse rather than picking up a phone, what happens to the added value of a teller? How does a wholesaler help the customer differentiate low quality parts from high quality parts? What differentiates one reseller from another – or worse, a reseller from an online retailer like Amazon?

“It becomes five screens on the store desk [and comparing] who can give me this tier 1 product at the lowest cost. And that’s the last thing we want,” said Mike Mohler, executive vice president and chief purchasing officer at Automotive Parts Services Group, commonly known as The Group.

It was a key question for him at the Automotive Aftermarket Suppliers Association’s Vision 2022 conference. He wondered how the supply chain conveys the message that they are premium product suppliers to the market. “And then how does that translate into our ability to really speak without our voices?”

What is in danger, he observed, is trivialization. If the only thing that separates Joe the Jobber from Amazon is money, then customers will buy with cost in mind.

“If we don’t understand the potential for commoditization, if we don’t figure out how to market ourselves digitally, if we don’t understand that, welcome to 100% commoditization of everything we do. This is my opinion,” he warned. “We need to understand how products are priced in the market.”

“We need to understand: how to engage our customers – not just in person [and] solve their problems there — but how we will solve their problems online. The day of being transactional online, it no longer works”,

Set expectations

Unfortunately, expectations have been set among consumers. They are used to shopping quickly. And that trickled down to auto repair. Their vehicle is expected to be repaired quickly, just like any other service they seek.

Even for do-it-yourselfers and those looking for smaller items that don’t usually need the help of a technician, they too now want it. During the pandemic, these expectations have largely been met. And there is no turning back, the experts observed.

“We set an expectation during the pandemic with e-commerce that I don’t think we’re going back from there,” said Eric Lough, vice president of business development at FCP Euro. “I think we’re just moving forward.”

He was also speaking to AASA Vision in another session, but he raised questions that echoed Mohler’s point. If the secondary market is to grow online – meeting the customer wherever they want, essentially – then unique challenges arise in terms of maintaining value. There must be more than an exchange of money and products.

“We need to understand: how to engage our customers – not just in person [and] solve their problems there — but how we will solve their problems online. The day of being transactional online, it doesn’t work anymore,” Lough said. “We cannot be here to sell auto parts to customers who have called [in an order] and say that we have done a good job. We have to be there to solve the problems. And selling parts is only part, or just part, of that whole experience for a customer. »

Alongside Lough, Brent Berman, vice president of repair products at First Brands Group, which includes Raybestos, Centric, Trico, Fram and other brands, spoke alongside Lough. He pointed out that e-tailing is indeed a new channel for the secondary market and should be treated like any other.

He recalled when the independent aftermarket moved into the retail segment. There were big box and fleet players to contend with. It was a channel that had to be managed. Mechanisms have been created within the four walls of the secondary market to manage it. So look at e-commerce the same way, he urged. It will only grow and this opportunity must be seized.

“We have to manage all the content, the people — they’re different people, it’s not the same as the salesman… who moves. It’s a different commitment. And I think we need to assess those teams and build them if you’re going to participate in the channel properly,” Berman said.

“We’re going to see a strong desire to buy more of these products online.”

Product categories

Some aftermarket pros may be screaming in their head that e-commerce can’t work well in the aftermarket because there are certain items that you just can’t ship to an online customer.

It’s true, noted Berman. There are many heavy products, irregularly shaped boxes and the like that will be difficult to manage.

But what about those little ones?

“I now look at it from the other side, [another] point of view: These basics under $10 – a $2 bulb, a $5 filter – then $5 shipping. How can we collaborate and make it a profitable business model? Berman observed.

So take a step back and breathe deeply, he says. There will always be hard-to-ship items. But there will also be easy objects.

“We’re going to see a strong desire to buy more of these products online,” Berman said.

Just as they click a button to buy toothpaste, customers can do it with a filter. And the aftermarket can work with that by planning a strategy around making those products available and attaching costs to that.

Lough agreed. Items like lighting than others that are just as small are easy to buy and can be shipped with no problem.

“If you’re going to ship an exhaust to me, it’s a hard thing to do online – for freight, get into my house, get it there in good condition – how many times have I seen a shock in a [distribution centre] where the top pierces through the box every time? ” he said. “So I really think small items are where you’re going to see a lot of attention in the e-commerce space.”

“We’ve actually done studies where we see cart abandonment skyrocket with more than a day [shipping].”

One day delivery?

Many outlets, including Amazon, offer one-day shipping. It’s awfully nice, especially when the item is needed the same day.

Can it work in automotive space? Maybe, but it’s still hard to make it work, Berman observed.

“Everyone knows Amazon Prime. Everyone knows. It’s all in our homes. But we see them struggle a lot in that space. Because they are beholden to a system that does not [mesh]. It’s not really search friendly, it’s not really compatible with PIES, they have high return rates. And so it’s really tricky,” he said.

Unfortunately, one-day shipping is the standard that has been set, Lough pointed out. Customers expect it.

“And now we have to follow. We’ve actually done studies where we see cart abandonment skyrocket with more than a day [shipping]said Lough, adding that his company is looking to expand its presence on the West Coast so it can service that part of the country in a single day.

“So I think it’s I think it’s almost table stakes. Now to be competitive in the market, have one day shipping to serve customers. This is exactly what they expect,” he added.

But by competing with Amazon, the secondary market has a head start. Or, at least, can choose his battle here. Amazon will still be able to ship toothpaste and toilet paper within a day.

“As for victory [in the aftermarket], I think traditional guys have these handshake relationships. And it will be up to them to turn this into some sort of e-commerce space,” Berman said.

That doesn’t mean the secondary market can rest on its laurels. Secondary market e-commerce players don’t face the same issues as brick-and-mortar stores trying to get into e-tailing.

“E-commerce start-ups have the advantage of not having all this heritage. So they can really be a little more nimble, a little faster to market. So that would be interesting to watch,” Berman said.

A key advice from Berman to the aftermarket: watch the chain carefully.

“And the technician will tell us, the workshop will tell us in the next five years, if we are doing a good job.”

separate from the rest

According to Jobber News Annual in-store surveyabout half (53%) of Canadian automotive repair and service shops order at least 70% of their products online.

Selling online is not so new for resellers and buying online is not new for stores. Someone from the store will go to the wholesaler’s portal and place an order for last mile delivery. “In the eyes of the technician or the merchant, wasn’t it just e-commerce? Berman asked.

So this is not uncharted territory for the industry. “I think the habits are definitely there. I think there may already be more of them than you think,” Berman added.

But what’s stopping anyone who needs a car part — from the auto service provider to the DIYer — from choosing Amazon over the wholesaler down the street?

“I think what’s going to happen is this type of online store or brick and mortar – or click and mortar, as I call them – will win [in the same way] like in any retail business: they will win with service, with smiles, with reliability, with dependability and things like that,” Berman said.

“That’s kind of the way I think about it. And the technician will tell us, the workshop will tell us in the next five years, if we’re doing a good job.


This article originally appeared in the July/August issue by Jobber News

Share.

Comments are closed.