This era has commonly been labelled as the age of instant gratification. You can get answers to questions with a few taps on your smartphone. You can also do the same to get food delivered to your house — and anything from clothing to picture frames to auto accessories — in no time.
People want what they want now — and they can oftentimes have their wish fulfilled.
But auto repair is a different than hanging up a new photo frame. This sector hasn’t traditionally delivered things instantly — and if you ask some shop owners, never quickly 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 parts expert.
And it’s in this e-tailing world where jobbers face some risk to the way their business is done. As more shops and retail customers gravitate to using a few clicks of their mouse rather than picking up a phone, what happens to the added value of a counterperson? How does a jobber help the customer differentiate between low-quality and high-quality parts? What differentiates one jobber from the next — or worse, a jobber from an online retailer like Amazon?
“It becomes five screens on the shop’s desk [and comparing] who can give me that Tier 1 product at the least cost. And that’s the last thing that we want,” said Mike Mohler, executive vice president and chief purchasing officer with the Automotive Parts Services Group, commonly referred to as The Group.
This was a key issue for him at the Automotive Aftermarket Suppliers Association 2022 Vision Conference. He wondered how the supply chain gets the message across that they’re suppliers of premium products to the marketplace. “And then how does that transfer into our ability to really speak without our voices?”
What’s at risk, he observed, is commoditization. If the only thing that separates Joe the Jobber from Amazon is money, then customers will buy with cost at the front of their minds.
“If we don’t get our arms around the potential for commoditization, if we don’t figure out how to digitally market ourselves, if we don’t figure that out, welcome to 100 per cent commoditization of everything we do. That’s my opinion,” he warned. “We got to get our arms around how products are priced in the marketplace.”
“We need to figure out: How do we engage our customers — not only in person [and] solve their problems there — but how we’re going to solve their problems online. The day of being transactional online, that doesn’t work anymore,”
Unfortunately, expectations have been set among consumers. They’re used to getting their purchases quickly. And that has trickled into auto repair. There’s an expectation that their vehicle should be repaired fast, just like any other service they seek out.
Even for the do-it-yourselfers and those looking for smaller items that don’t generally need the assistance of a technician, they, too, want it now. During the pandemic, these expectations were largely met. And there’s no turning back, experts observed.
“We’ve set an expectation during the pandemic with e-commerce that I don’t think we go back from there,” said Eric Lough, vice president of business development at FCP Euro. “I think we only go forward.”
He was also speaking at AASA Vision during a different session, but he raised issues that echoed Mohler’s point. If the aftermarket is to grow online — meeting the customer where they want, in essence — then unique challenges are presented in terms of maintaining value. There needs to be more than an exchange of money and product.
“We need to figure out: How do we engage our customers — not only in person [and] solve their problems there — but how we’re going to solve their problems online. The day of being transactional online, that doesn’t work anymore,” Lough said. “We can’t be there to sell auto parts to customers who called [in an order] and say we’ve done a good job. We need to be there to solve the problems. And selling parts is just one piece, or just a sliver, of that entire experience for a customer.”
Speaking alongside Lough was Brent Berman, vice president of repair products at First Brands Group, which includes Raybestos, Centric, Trico, Fram and other brands. He emphasized that e-tailing is indeed a new channel for the aftermarket and must be treated like any other.
He looked back on the days when the independent aftermarket moved into the retail segment. There were big box and fleet players to compete against. It was a channel that needed to be managed. Mechanisms were created within the four walls of the aftermarket to manage it. So look at e-tailing the same way, he urged. It’s only going to grow and that opportunity must be seized.
“We have to manage all the content, the people — it’s different people, it’s not the same as the salesperson … driving around. It’s a different engagement. And I think we have to assess those teams and build those teams out if you want to participate in the channel properly,” Berman said.
“We’re going to see a strong desire for more of those products to be purchased online.”
Some aftermarket professionals may be screaming in their heads that e-tailing can’t work properly in the aftermarket because there are some items that you just cannot ship to an online customer.
That’s true, Berman noted. There are many heavy products, odd-shaped boxes and the like that are going to be tricky to deal with.
But what about those smaller ones?
“I’m looking at it now from the other side, [another] perspective: Those commodity, less-than-$10 products — a $2 bulb, a $5 filter — and then a $5 shipping charge. How do we collaborate and make this a profitable business model?” Berman observed.
So take a step back and a deep breath, he said. There will always be items that are difficult to ship. But there will also be easy items.
“We’re going to see a strong desire for more of those products to be purchased online,” Berman said.
Just as they click a button to buy toothpaste, customers can do that with a filter. And the aftermarket can work with that by planning strategy around making those products available and attaching costs.
Lough agreed. Items like lighting that others that are similarly small are easy to buy and can be shipped with little issue.
“If you’re going to ship me an exhaust, that’s a challenging thing to do online — for freight, getting into my house, getting it there undamaged — how many times I’ve seen a shock in a [distribution centre] where the top is poking through the box every single time?” he said. “So I think really the smaller items are where you’re going to see a lot of focus in the e-commerce space.”
“We’ve actually done studies where we see cart abandonment just skyrocket with anything more than one day [shipping].”
One day shipping?
Many retail outlets, Amazon most notably, offer one-day shipping. That’s awfully nice, especially when the item is needed the same day.
Can it work in the automotive space? Maybe but is it ever hard to make it work, Berman observed.
“Everyone knows about Amazon Prime. Everyone knows. It’s all in our houses. But we see them struggle a lot in this space. Because they’re beholden to a system that doesn’t [mesh]. It’s not really lookup-friendly, it’s not really since PIES-friendly, they have high return rates. And so that’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 up. We’ve actually done studies where we see cart abandonment just skyrocket with anything more than one day [shipping],” Lough said, adding that his company is looking to have a stronger west coast presence so it can serve that part of the country in just one day.
“So I think it’s I think it’s almost table stakes. Now to be competitive in the market to have a one-day shipping to service customers. It’s just what they expect,” he added.
But in going into competition against Amazon, the aftermarket has a leg up. Or, at least, can pick its battle here. Amazon will always be able to do one-day shipping on toothpaste and toilet paper.
“As far as winning [in the aftermarket], I think the traditional guys do have those handshake relationships. And it’s going to be up to them to parlay that into kind of a more e-commerce space,” Berman said.
That doesn’t mean the aftermarket can rest on its laurels. E-commerce players in the aftermarket don’t face the same issues as brick-and- mortar stores trying to move into e-tailing.
“The e-commerce start-ups, they have the benefit of not having all that legacy stuff. So they can really be a little bit more nimble, a little quicker to market. So it’d be interesting to watch,” Berman said.
A key piece of advice from Berman to the aftermarket: Watch the channel closely.
“And the technician will tell us, the shop will tell us in the next five years, if we’re doing a good job.”
Separating from the rest
According to the Jobber News Annual Shop Survey, about half (53 per cent) of Canadian automotive repair and service shops order at least 70 per cent of their products online.
Selling online is nothing all that new to jobbers and buying online isn’t new to shops. Someone from the shop will go to the jobber’s portal and place an order for last mile delivery. “In the eyes of the technician or the shop owner, wasn’t that just e-commerce?” asked Berman.
So this isn’t unfamiliar territory for the industry. “I think the habits are definitely there. I think they might already be there more than you think,” Berman added.
But what’s stopping anyone who needs a car part — from the automotive service provider to the DIYer — from choosing Amazon over the jobber down the street?
“I think what’s going to happen is that e-tailer or that brick-and-mortar — or click-and-mortar, as I call them — kind of store will win [in the same way] just like in any retail business: They’ll win with the service, with a smile on their face, with the dependability, with the reliability and things like that,” Berman assessed.
“That’s kind of the way I think about that. And the technician will tell us, the shop will tell us in the next five years, if we’re doing a good job.”