Retail Trends Hinge On Consumer Packaged Goods

No guide to retailing would be complete without a look into some of the broader retailing trends that are impacting the automotive aftermarket in today’s complex landscape.

In order to help with identifying some key trends, the editorial team at Jobber News took the opportunity to meet with Jasmine Sachdeva and Keith Barber of the NPD Group in Toronto, Ont. As market research specialists, both Sachdeva and Barber were able to highlight some important new trends that members of the aftermarket can take advantage of in order to better leverage these changes in the marketplace.

1) Vehicle Age Factor

More often than not, when talking about the retail market, we are talking about the DIY customer. Vehicle age plays an important part in determining the likelihood of retail opportunities. According to NPD, as a vehicle ages, the DIY channel becomes more robust, as customer vehicles begin to leave manufacturer warranties.

In a phenomenon known as “freedom at four,” most DIYers begin the uptake of the independent aftermarket around years four to seven, and then stick with it almost exclusively in the eight and older demographic. Therefore, it is important to take note of vehicle age when trying to determine the sorts of retail opportunities you may have.

2) The Stay-in-Car Mom

A reasonably new phenomenon identified by researchers is the concept of the stay-in-car mom. A cousin to the soccer mom, this class of women is chiefly responsible for getting kids (theirs and others) to and from myriad mid-week activities, spending more time behind the wheel of the family car than women in previous generations. These women are playing an increasingly important role in the decision-making process when it comes to vehicle care and maintenance.

Some non-automotive companies are beginning to recognize this trend, and have begun marketing female-friendly products that have been rebranded for automotive use, such as car wipes and other quick cleaning products. As jobbers, you can take advantage of new consumer packaged goods that are targeted to this emerging market by utilizing the kind of retail techniques perfected by the corner store. Small displays featuring these products can provide your retail customers with a chance to make the all-important impulse purchase.

3) Household Equity Shifts

With the glass ceiling being shattered by more and more working women, the overall share of household equity is more balanced today than at any other time. Whereas the man of the house used to hold all of the decision-making power by virtue of income, that simply doesn’t hold true today. According to the researchers, the automotive industry, and the aftermarket in particular, has been slow to react to this shift, and it is a market that simply can’t be ignored any longer.

Take the time to assess your sales routine and ensure that it is inclusive of both men’s and women’s sensibilities.

4) Brand Loyalty

One common misconception is that there is a particularly high degree of consumer brand loyalty across many different part categories in the automotive aftermarket. However, according to the research, this is simply not the case when it comes to retail sales. The experts at NPD confirmed in their research that it’s really only the more tactile products, the ones than can be taken from a shelf, that show any significant brand loyalty. Products like motor oil have a high degree of loyalty, whereas components like brake pads or an exhaust system have very little.

5) Location, Location, Location

As is being evidenced by a few major parts retailers, the time for squirreling the jobber store away in the midst of a sprawling industrial park is coming to an end. Particularly in terms of improving retail sales, the old real estate adage of location, location, location is becoming more and more apparent.

Top jobbers across the country are placing their parts stores on busy main streets, looking to establish themselves as just another stop on the way home to pick up the sorts of automotive products whose sales are currently dominated by the likes of Wal-Mart, Canadian Tire, and other “destination” stores. Becoming the top-of-mind place to stop for small consumer packaged goods could be the answer to your retailing woes, but it all starts with location.

6) Not Just a Repair Stop

According to NPD, the key to the future retail success of most jobbers is to shift the public perception of the store from a place to buy a new muffler when the old one falls apart to a place to quickly stop and pick up everyday automotive products, like cleaning gear and motor oil.

These packaged goods are advantageous because they are easy to stock, come in attractive packaging, and are often high-profit, low-maintenance items. One key point to remember when it comes to the profitability of these products is that they immediately inject cash into your coffers. While bulk orders will likely remain your bread and butter, when you have invoices that float in the automotive ether for 30, 60, or 120 days, there is a cost associated with that billing. Retail sales, however, have something like a one-second invoice interval, so by becoming a top-of-mind destination for consumers, you should be able to pad the bottom line with some quick, easy sales.

7) Massive Marketing Dollars

One advantage the jobber has when it comes to trying to break into this market is that the massive companies behind these rebranding efforts (like the mommy-market car cleaning products) are already spending millions of dollars in television and print advertising. By establishing your store as the retail outlet of choice for these products, you can piggyback on the corporate image built by these companies through their proprietary marketing campaigns.

8) Simple Approaches Work

One of the best things you can do to help your retail sales is to follow the keep-it-simple rule. Given the number of novice DIYers out there, particularly in terms of motor oil, make sure you keep their retail experience as simple and straightforward as possible.

Use appropriate signage to direct customers to what they are looking for. Being lost in a maze of similar products can be an intimidating experience, so set up your racks in a manner that allows a customer who may not have a great deal of automotive knowledge to find what he is looking for, with the bare minimum of hassle.

9) Independent Branding Is Working

While some aftermarket pundits seem bent on crying wolf about the woes of the independent aftermarket, recent market research seems to paint a rosier picture. According to NPD, the percentages are starting to work in the aftermarket’s favour; the number of aftermarket sales transactions grew some 18% since 2004, while transactions for the dealerships declined some 20%.

While these numbers cannot reflect any certain profitability, they do point to the growing success of key messages within the aftermarket as a whole. Branding, effective signage, and linking your own independent branding with that of some major parts and supplies manufacturers–notably those of motor oil suppliers–is working, and should be kept up.

10) Partnering with Service Provider Customers

Your retail approach doesn’t have to be just about your showroom. By lending some expertise and creativity to your service provider customers, you can help their profitability and yours.

With the move to more consumer-friendly surroundings comes the opportunity to merchandise products much more effectively than in the past.

By lending your manpower you can ensure that wiper, motor oil, and other displays are kept stocked, and that old stock is removed promptly. Plus, new ideas and items can be tried and changed up quickly with your assistance.