Taking It Retail

As we head into the summer months, it’s not unusual to see an influx of do-it-yourself customers come into your store as the weather improves and the amount of time spent driving increases. However, it’s easy to lose sight of what drives consumers to purchase certain products, amidst the daily flurry of technicians, servicemen, and garage-owner calls.

While jobber stores make the bulk of their sales to trade customers, there are a number of product categories that rely heavily on retail.

“The wholesale contingent of our business is becoming infinitely more interested in that walk-in DIYer’s business,” says Chris Osborne, vice-president of Kleen-Flo Industries Ltd. “That has encouraged us–not forced us–to change the way we go to market, not only with the channels we go through, but also with the product mix that we have and the way it’s packaged. That’s probably the biggest thing influencing [consumers]. Ten to 15 years ago, the packaging was very trade [oriented]; it was bland, unattractive, and we’ve really had to step it up since then.”

The presence of retail products in jobbers’ stores has also increased dramatically over the last decade. More to the point, manufacturers have been adjusting their product mix to accommodate DIY customers, while a majority of their product line is directed at their DIFM customers. (Only 10 years ago Kleen-Flo was 100% trade.)

If there’s one piece of advice for jobbers across all manufacturers, it’s to focus on the fundamentals of retail marketing. Make your products visible, clearly priced, and well located. These three factors will create the impulse buy with very little effort on your part.

“If you have a [product for retail] on the shelf, it needs to have a price underneath its location. It has to say $4.99, because that’s what the consumer is used to seeing,” says Richard Navin, national sales manager for Radiator Specialty Company. “When you go into a retail store, the product is clean and it’s priced. So when you go into a jobber store it needs to reflect what [the consumer] normally sees. Firstly, it answers the question right away. Secondly, it saves the consumer from taking time away from the counterperson for a fairly obvious question.”

It’s also worth noting that the knowledge level of each customer is different. Often, a technician will have a better idea of the product he’s looking for than a consumer will. A retail customer may not know what he needs and will require more professional help in making the choice suitable for him.

What is often underestimated, however, is the impulse buying power of the retail consumer.

“Obviously the DIY consumer is more sensitive to an on-the-counter program, so a lot of times jobbers need to be seasonal in nature. Keep in mind what season you’re going into when the walk-in traffic is going to be coming into your store,” says Mark Sceeles, national sales and marketing manager for CRC Canada, Inc.

“In the summer it’s going to be a lot of cleaners, car wash supplies, and leather cleaners, because people like to clean their cars in the summertime. You’ll probably want to have that stuff around so it will jog their memory when they’re walking in. You’re also going to want to have point-of-sale marketing materials or the products themselves up on the shelf, which is more of an impulse buy and a reminder.”

Two things also to be aware of in the lubricants/additives category are changing demographics and legislation. We’re seeing a much higher ratio of female buyers than 10 years ago. Not only is the number of female buyers increasing, but so also is the number of women interested in the longevity and safety of their cars. Also, keep abreast of changing legislation with regard to things like packaging, content, VOC compliance, and other product features that may be regulated.

“That’s something from our perspec tive as a Canadian manufacturer; we have to ensure that we’re always ahead of the curve,” continues Navin, “because if we were to provide products to jobbers that were not compliant, we would be doing them a huge disservice.”

For example, early this year a brake cleaner sold at an auto parts retail chain was recalled by Health Canada because it did not meet flame projection limits. Only 10,000 cans of the brake cleaner were involved, but surely all parties concerned would have rather been spared the issue in the first place.

In the retail sector, oil and filter sales have often been treated as loss leaders.

This makes it extremely difficult for the jobber to compete on price alone with big-box retail outlets such as Canadian Tire and Walmart, who are charging less than ten dollars a litre for 10W-30 or 5W-20.

“[Jobbers] are not going to compete on price to drive people to the store,” says Dennis Favaro, product manager for Valvoline Canada. “What they can do is offer the selection, breadth, and depth of what they carry, because the big boys are only going to carry the stuff that moves, the stuff that doesn’t meet the hurdles in terms of volume and profit or whatever their model is based on.”

While the motor oil product category has had a higher percentage of DIY sales than most product categories in the aftermarket, over the past decade, the DIY market share for motor oil has shrunk considerably, anywhere from 35 to 40% 10 years ago to 20% today, because many consumers are opting to get their oil change done by a professional.

Nevertheless, there are certain things you can do to ensure you’re getting the most oil sales out of your store. “There’s a lot of opportunity in merchandising and how you bundle products,” says Mark Reed, global brand manager for Shell’s Rotella brand and a veteran of the automotive aftermarket. “If somebody’s coming in for an oil change, for example, you’re going to want to put filter displays fairly close to motor oil, as well as ancillary items like drain pans, cleaning products for oil spills, filter wrenches, and oil drain plugs. A lot of successful U. S. retailers are offering bundling opportunities that can be put together quite easily with a little bit of effort.”

Some manufacturers believe that better education is needed for jobbers in the selling of oil products, and that it is possible to stay competitive in this category by pushing high-end synthetics off the shelf.

“They think they’re making money selling oil change products for $30, when they could do the same thing pushing the advantages of high-end synthetic oil for $90. Getting the 5W20 or 10W30 API approval is easy ,” says Claude Van Kessels, director of marketing for Total Lubricants, Inc. “It’s getting those specific approvals for Mercedes, Porsche, BMWs; those are very costly. Only a few companies worldwide are paying the money to meet those OEM requirements.”

In any case, it’s always a good idea to make your displays consumer-friendly. This means ensuring they are clean, well laid-out, well lit, and easy to shop. Also, make sure your motor oil isn’t front and centre, as most retail customers will be more than willing to search a store for their chosen brand of motor oil.

“Oil is a key traffic driver in any retail location. The objective is to have the oil displayed in an area of the store that draws them through the store, as opposed to putting it in the front where they walk in,” continues Favaro. “Why isn’t motor oil at the front of the store, even when it’s on sale? It is usually hidden because [retailers] want you to walk through the store and experience what else they have to offer.”

Your retail customers for motor oil and filters may often be DIYers who don’t have access to a retail outlet locally, but more likely they may be hardcore enthusiasts pressed for access to harder-to-find parts.

“The retail customer is generally more brand-sensitive. Changing their own oil gives them a sense of accomplishment and that feeling can be reinforced with a strong brand,” says John Hussey, western sales manager for Honeywell CPG. “The garage will look at the overall value of a filter line,
such as cataloguing, SKU coverage, service, etc., but as more cars move to spin-on filters, DIYers tend to shy away from the difficulty and mess involved with changing an oil filter cartridge. Nevertheless, it’s important for jobbers to offer full coverage–oil filters, air filters, and fuel filters–and have all of them available.

“Make sure they have a filter display in their retail presence with their oil, and the signage as well as the POS material is properly displayed to let the customer know that they carry ‘X’ brand of filters. As a company we have metal signs, banners, shelf talkers, and posters that the jobber can use to merchandize the products and make the customer aware.”

One of the newer categories some jobbers with retail ambitions may consider is the new generation of mobile electronics. It’s not just about the car stereo anymore.

The landscape for mobile electronics has changed dramatically over the last decade, both in the advancement of the technology as well as how the technology is manufactured and sold. OEMs have become increasingly aware of the wireless connectivity and access consumers want in their vehicles. Microsoft’s Sync technology, which comes standard in new-model Fords, for example, makes it possible to connect your iPod, Zune player, Blackberry, cell phone, and a variety of other mobile devices to your car through Bluetooth.

One of the aftermarket’s advantages over OE has been its ability to stay ahead of the curve, to make improvements on parts coming out of the factories, should they fall short once tested in real-world road conditions and need replacement down the line. With consumer electronics, however, it has been more of a challenge.

“The number of years it took for aftermarket manufacturers to update specific parts coming out of OE was anywhere from three to five years. However, with advancing technology and updated integration coming out of OE, it’s effectively narrowed that gap [by] one to two years,” says Steve Koenig, director of industry analysis for the Consumer Electronics Association (CEA), a U. S.-based association. “There are two categories for consumer electronics in cars: there are those parts and equipment that need to be installed, and those that simply need to be bought.” It is this “bought” category that Koenig advises jobbers should capture as vehicle technology becomes increasingly limited and incorporated with OE design.

These items include global positioning systems (GPS), rear-seat entertainment systems, hands-free systems, and satellite radio. But where do you start? And how do you go about marketing these items to a specific consumer? In a CEA outlook study surveying over 1,100 drivers, the association divided the consumers for mobile electronics into four distinct demographics: parents with young children, parents with teens, young adults, and performance drivers.

Chief among these results was the conclusion that adults buy mobile electronics more for communication and entertainment than safety. Other conclusions made from the study include that consumers are looking for connectivity for their electronics (e. g., A/V, power, and wireless solutions) and that adults with small children are the best target demographic for video products such as DVD players and rear- view cameras.

“There has been a shift away from portable digital player (PDP) dock capabilities over the past year for items like iPods and MP3 players, and a move towards the more versatile Universal Series Bus (USB) connectivity among in-dash CD players,” says Mark Haar, an analyst with the NPD group. “Last April, 32% of in-dash CD units had PDP dock capabilities, whereas this April only 16% of units sold had this capability.”

Haar also notes that satellite radio capability has remained steady over the past year, with anywhere from 35% to 42% of monthly unit vehicle sales equipped with this feature and mobile navigation. Bluetooth has shown a flat trend with anywhere from 20% to 28% of monthly vehicle unit sales equipped with this capability.

While your DIY customers make up a small percentage of your overall sales, take note of the opportunities out there in the aftermarket. A lost sale on a retail customer may not seem like much in the shortterm, but when compounded over a year could mean a difference of hundreds, even thousands, of dollars. Employ some of these marketing strategies and drive those retail sales.

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Going Beyond The Sale

According to a recent 2008 study conducted by J. D. Power and Associates, only 8.43% of a pool of 16,000 participants “strongly agreed” with the statement “I do my own basic maintenance on my vehicle.”

While DIY stats have remained relatively stable over the last six years, one question that showed significant change was those that “strongly agreed” with the statement “not interested in learning how to perform DIY.” It’s interesting to note that from 2002 to 2009, this percentage increased to 22% from nearly 17%, indicating that consumers are less likely to repair and maintain their own vehicles themselves.

With this in mind, when you offer products such as wiper blades or replacement bulbs to your DIY customers, it would be a good idea to offer free installation as well.

“For auto parts stores this is particularly easy, because it’s usually right out your front door,” says Mark Reed, global brand manager for Shell Rotella. “You walk out to see the car and really engage with the consumer. Word of mouth will likely spread as a result.”