12th Annual Retail Intelligence Issue Diversifying For Sales And Profit

In a bid to add sales volume and margin to their sales, many auto parts jobbers have begun to experiment with diversifying into other channels to increase their bottom line, with varying results.
The most common channels that jobbers are venturing into include hardware, industrial, marine, and performance.
In a recent Jobber News Survey, some 55% of respondents said they have diversified into another non-automotive channel, while 44% of respondents said they have not yet made the move. Of those jobbers that have diversified, 28% have added an industrial channel, 24% went into agriculture, another 20% went into marine, and only 8% had expanded into hardware.
Their reasons for expansion varied:
“Our shop is located in an agricultural area. Though we are primarily an automotive parts store, we had decided to branch out into some ag-related lines. The challenge for us is that as an automotive store, we were unfamiliar with these products and it required learning about the needs of the agricultural market. The benefit has been an increase in sales and our customer base.”
“Many of my customers have ATVs, motorcycles, and snowmobiles, so carrying parts for these lines gives them another reason to shop in my store.”
“We got into trailer parts and accessories. There isn’t anybody else in town that has a good selection. We are now advertising and putting signs out, but it’s still too early to tell how successful we’ll be.”
“We have a lot of marine customers in our region, so it made sense to add a marine channel.”
“More customers were asking for an alternative to their current suppliers of the performance product category.”
When it comes to showroom display space, just 3% of respondents devote some 50% of their showroom space to their new line, while the majority of jobbers devote 5% to 10% of the showroom to the new line.
When it comes to measuring the success of the diversification process, some 40% of respondents claimed to have achieved only a 10% success rate with the new channel, while 13% claimed a 25% success rate, and another 13% claimed a 50% success rate; another 21% reported a 75% success rate with the new channel, while 13% reported a 100% success rate with their new line. Many respondents on the lower end of the scale stated they need more time to develop the line and evaluate the full benefits of the move.
One respondent who now devotes 50% percent of his showroom to a new performance channel explains, “It’s easier to sell product when it’s in stock. We sell a lot of diesel performance items. They go well with our in-house tuning service.” Another said, “The new industrial line seems to have been a good move. Sales are up.”
The successful jobber operates his business much like a racecar team. It involves a lot of moving parts, a well-trained team, and precision timing. When the formula is dialled in, the result is a smooth, impressive, winning performance.
“Trying to win over a customer from a competitor these days is darn near impossible unless your competitor really screws up bad,” says Dan Collins, owner with his wife Sue of Auto Parts North and a member of Modern Sales, in Huntsville, Ontario. “The best way to expand business these days is by adding new channels, and you can usually identify what will work by knowing your customer base.”
Located in beautiful Muskoka cottage and camping country, Auto Parts North found a niche for truck, car, and RV accessories and brought in additional clients they wouldn’t normally attract by carrying non-automotive lines like rakes, shovels, and brooms. “Arrowhead Provincial Park, which is located on the edge of town, has an account with us for all their rakes and shovels and other accessories, and we also get a number of landscapers coming in now. Many of them now come back to us for auto parts to service their trucks and landscaping equipment, so the non-automotive lines have helped us to expand our business and increase our auto parts sales at the same time,” explains Collins.
Basically, if all of your moving parts (stocking, pricing, staffing, training, and marketing efforts) are in place, when that customer steps through the door or calls in, your well-trained counterperson becomes the face of your brand.
Your counterperson should be engaging customers as they come through the door or when they pick up the phone. The sooner that engagement begins, the sooner your employees can start creating a positive buying environment. A good measure is to allow no more than 15 seconds for customers to get their wits about themselves, leave the traffic and nonsense behind, and focus on the reason they are at your store.
In any relationship, trust is built through communication. Only with the back and forth will your counter staff be invited to listen to the customer’s needs and offer solutions. Ask questions, listen for their answers, and share something from your own experience. This step elevates the counterperson to the role of trusted advisor and helps the customer feel comfortable making a purchase from them.
A counterperson who can listen will learn everything they need to know about selling to a customer. A few pointed questions, coupled with a sincere interest in the customer’s answers, will reveal any concerns that may be holding up a sale. Using their product knowledge and what they learn about the customer, the counterperson can show how the product can address those concerns.
You and your staff need to know what good service looks like. After all, you can’t hit the bull’s eye if you don’t have a target. Service standards for time to greet, for what to say, for when to say it, and for how to pass off the merchandise, all should be defined, or bad employees will compromise your brand. Customers are judging you, so it’s up to you to proactively see that they have nothing to complain about.
At the end of the day it really comes down to making that one person in front of you feel they are the most important person in the world. There’s nothing you wouldn’t do to make their day better. It’s all about the customer’s experience.