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Category Archives: Automotive

Amazon Coming to Australia

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Amazon fish

Image by Frits Ahlefeldt

*Since posting this blog, The Age has amended the original article, that the quoted Amazon source was NOT a current Amazon employee and did not speak for the company. Further to this, Amazon made an official announcement on 20th April and the news is now reflected on the Amazon Australia web site. 

The speculation is over with an Amazon executive confirming to Fairfax media that the company plans to be fully operational in Australia by the end of 2018.

“Australians will be able to buy everything from takeaway and groceries to electronics and clothing from Amazon’s greatly expanded online offering by the end of next year.“ Quotes The Age March 29th 2017

The Australian retail community has been abuzz with the news that Amazon is coming to invade Australia with no official confirmation until now. Amazon has been reported as scoping out warehousing sites, and hiring local logistics people needed for a successful local ecommerce operation. But, the smart money backed a minimum of 12 month’s lead time once they broke cover with real estate, logistics and once local agreements were entered in to.

So what does this mean for Australia, retailing and the auto parts market in particular?

In the U.S., Amazon has been accused of “destroying traditional retailers” according to the Financial Review. Steve Odland, a former AutoZone chief executive interviewed for the article said that traditional bricks and mortar retailers were heading for a “slow moving train wreck” with wide ranging knock-on effects to things like commercial real estate as Amazon accelerates the shift to online.

More on that later but first some local history.

Before, Amazon was content sending products direct to Australian consumers through couriers and soft service delivery. In 2016, some analysts predicted Amazon would set up shop here prior to 1st July 2017 and in time for changes to the GST (goods and services tax) being applied to imported goods below a $1000 threshold. By February this year, analysts had set back the rumored invasion to September 2017. The rumor mill gathered pace through early 2017 and we now have a concrete answer but what will the new Amazon Australia service offering entail?

And the stakes are high.

According to the same article, Australia’s retail sector is worth around $222 billion. Based on overseas experience, Amazon can undercut conventional retail prices by as much as 30 percent, enabling it to carve as much as $3.5 to $4 billion out of the Australian retail sector over the next five years according to a Sydney Morning Herald piece. This would equate to 14 percent of all local online spending and 1.1 percent of total Australian retail spending.

Bigger fish in the pond

Most think Australian retailers are still unprepared. In an ABC News interview John McDuling, associate editor at the Australian Financial Review, says local retailers have been operating for years on an “oligopoly economy” business model “in every sort of market segment” – one or two big players with a network of physical retail stores and supply chains around the country and the biggest profit margins in the world. Faced with Amazon’s business model: minimal physical stores, very advanced supply chains, and a focus on keeping prices low – only a few may be able to keep up. Australian online retailer conversion rates are less than 10 percent vs Amazon’s U.S. site converting 49 percent of Australian shoppers to date.

Young Australians welcome Amazon

A recent Neilsen survey shows young Australians are particularly interested in having a wider range of products that are cheaper and delivered faster. According to Neilsen’s January 2017 study:

“75% of Australians aged 18+ saying they are interested in Amazon Australia; while 56% say they are likely to purchase from its Australian site; and 45% saying they would pay to become an Amazon Prime member to receive special deals, discounts and delivery perks.”

Those surveyed showed that they would most likely buy (in decreasing order) electronic goods, books, clothes, shoes, music, and videos from Amazon Australia. Amazon Prime (a free and fast delivery subscription for $US100 per year) tends to make people spend more. Food was of least interest, according to the respondents (only a few were aware of Amazon Now, for delivering groceries under an hour).

No auto parts were mentioned in the study but clearer younger shoppers and consumers are voting with their wallets, driving the change which will pick up pace with Amazon’s arrival regardless of sector.

Will Amazon Australia do auto parts?

We’re not sure but if they do, the US experience provides some clues as to what might happen here.

In January 2017, Amazon US announced it had set its sights on the US$50 billion do-it-yourself after-market auto parts business. As a result, shares of auto parts retailers in the U.S. fell sharply with Autozone Inc, seeing a 5.1 percent slump in one day.

According to one Wall Street analyst, Amazon’s auto parts business could expand by as much as 50% in the first year. A simple, quoted example to illustrate why.

Dorman 902-407 auxiliary water pump currently costs (US)$90.70 on Amazon and the same part costs (US)$124.99 on AutoZone’s website.

Dorman-Auto

Amazon has been able to achieve this because other parts retailers are focusing on obtaining deals with foreign, private-label part manufacturers. This makes the parts retailers more profitable, but not the local part manufacturers.

An executive at an auto parts manufacturer even said that this reduced the loyalty of the manufacturers to these chain retailers.

Meanwhile, Amazon is paying US auto parts manufacturers up to 30 per cent more for their products on a direct purchase and supply.

Its claimed that Amazon has already reached the ‘tipping point’ to dislodge U.S. auto parts giants like O’Reilly Auto Parts and Genuine Auto Parts from their hold of the U.S. auto parts market.  The same article quotes that “Amazon has struck supply contracts with some of the largest parts makers including Federal-Mogul Holdings Corp (NASDAQ: FDML), Dorman Products Inc, Robert Bosch GmbH and Cardone Industries Inc, NY Post reported on Sunday, citing sources. (http://nyp.st/2k8Ibhq)”

“The majority of us now are selling directly to Amazon.” Said one auto parts executive.

And the changes aren’t just aimed at retail and e-commerce. By September last year, Amazon started offering same-day auto parts delivery in 40 U.S. cities, at prices averaging 23 percent less than other aftermarket auto parts retailers (according to investment banking firm Jefferies LLC). This makes Amazon more attractive for workshops and trade customers too.

Meanwhile, in November last year, Amazon also started selling select Fiat Chrysler cars in Italy. This could be a clue to further disruption moving in to the new car retailing area as well.

How can sellers compete with Amazon?

“Adapt and adapt quickly”, says retail king Gerry Harvey of retail giant Harvey Norman, in the same ABC News interview previously mentioned. Also in that interview, Brad Stone, Bloomberg correspondent and author of The Everything Store: Jeff Bezos and the Age of Amazon says that, in North America, retailers that have successfully survived Amazon’s onslaught (like Nordstrom) have great customer service, generous return policy, personal shopping guides – something that, by nature, Amazon cannot compete with.

Instead of fighting it out on price and range of selection, “you might get them [Amazon] on convenience, because it still does takes two days, or maybe a day, for something to appear on your doorstep”, Stone says.

With auto parts, some workshops and trade customers are spoilt with virtual “on-demand” deliveries from a variety of providers. But, is it too far-fetched to imagine an Amazon drone delivering a fuel filter on to the workshop forecourt?

Amazon will not go unchallenged

Just earlier this year, Alibaba set up its Australia & New Zealand headquarters in Melbourne. Alibaba’s ANZ director, Maggie Zhou, has been quoted as saying their goal is “to build the entire operating infrastructure needed to enable local businesses to expand globally” – competing with the advantages offered by Amazon to local manufacturers in terms of logistics, cloud computing and more.

Amazon may also be facing a threat from within. McDuling says Amazon has been criticised heavily for the grueling conditions in their warehouses … and, in Australia … we have stricter protections on things like that … we have a different attitude on issues on workplace laws and overtime pay”.

A time of great change nonetheless

The move toward online retail and e-commerce in general is growing at over 10 percent per annum and Amazon’s entrance on the Aussie stage will accelerate that further as it makes it easier for consumers to buy online.

Based on above, DIY auto parts customers are enjoying greater choice of brands and online sellers with evidence that garages and trade customers are using these options more for non-time critical purchases. This is a predictable change happening across all sectors.

However, the biggest disruption in the auto parts space relates to logistics, supply chain and distribution relationships. The U.S. experience suggests there are opportunities for brands to establish strong links with online sellers that might re-energise a more traditional brand focus partnership model.

Value-adding becomes even more important with efficient and streamlined operations having an edge over traditional models.

These changes continue to underline the importance of data and standards. All the major online retailers and channels use ACES/PIES for North America and TecDoc for other markets like Europe and Australia.

Good data also means quality images, rich content, enhanced meta data and meaningful text and materiel that is properly catalogued and presented for display, publishing and search indexing.

Fundamentally, good data increasingly means good visibility for you and your business.

Talk to Enform about our solutions for good data and e-commerce deployment.

 

Enform E-Commerce Integration

By | Announcements, Automotive, eBay, ecommerce, Google, Industry, Instagram, SEO, Social Media, tools, Web Store | No Comments

Enform Specialises in eCommerce

 

Enform enable Online Retailers to build and grow marketplaces, audiences and advertising reach. Utilising knowledge and experience we work with you to build a multi-channel, multi-market business that integrates with your systems to provide scalable options.

With each business utilising different systems to deliver pricing, inventory and rich content for their listings – virtually every integration is a bespoke development that needs proper planning and management to ensure economic and efficient delivery. Read More

Enform Ebay auto parts sales index shows 25% growth on 2014

By | Announcements, Automotive, eBay, ecommerce | No Comments

ebay_australia_policiesEnforms focus on e-commerce and digital marketing has meant a lot of experience with e-tailing and B2C solutions particularly for the auto parts aftermarket. Ebay is one of the largest retail sales channels for auto parts worldwide and the Australian site is one of the largest market places for auto parts in Australia with an estimated TTV (total transactional value) in excess of $600 mil for 2015 calendar year.

This makes it a useful measure for the health and future prospects of this growing area of online selling. So thanks to some handy online tools, Enform has built its Ebay auto parts sales index to track sales growth to provide advice and insights for its customers.

The key criteria used to build and maintain this index are:

  • Filtering for sales under “Car & Truck Parts” category only so we exclude marine, motor cycle, camping and other non-auto parts products
  • Total and individual sales by a selection of 50+ individual Ebay.com.au sellers
  • Total and individual sales by a selection of 20+ key product types or keywords used in listing titles
  • Total and individual sales by a selection of 65+ product brands or brand names used in listing titles

The data has been collated each month for over a year providing an index that can be used to track total growth and changes across a variety of metrics. Enform will aim to provide snapshots of this data from time to time but this resource is also available to customers that would like specific data, product segments or competitor information researched or reported on.
This month, we’d like to summarise some of the key metrics of the last few months to help provide some guidance to online auto parts sellers. Some examples include;

Total October 2015 growth on 2014 exceeds 25%
Regardless of the metric used, sales of Car & Truck Parts category grew between 25-27% in October 2015 when compared with 2014. This shows a consistent pattern for the calender year in general.

  • Stand out growing product types include filters at 74%, towbars at 43%, tyres at 93%
  • Poor performers include coilovers that dropped 32% while performance category filters slumped by 13% year on year

October is a relatively poor month overall with 18.5% lower sales than August
Based on TTV across all metrics, October is a relatively poor sales month with many believing school holidays and Christmas lead up dampening demand. Using our selection of “Sellers”, this equates to 18.5% lower TTV when compared with the August peak which seems to be the top month recently regardless of metric used.

  • 30% of all Sellers went backward in October 2015 compared with October 2014
  • However 52% of all Sellers sales grew by more than 30% compared with 2014

Brands and brand names grow faster than product types but slower than sellers.
Seems confusing but what we’re saying here is that while established brand names are growing faster than simple product names, these brands are not growing as fast as the market place overall as measured by the growth in Sellers TTV. Possible interpretations here inlcude;

  • Brand names are not as relevant when compared with overall demand via the market place and for established sellers
  • Brands are emerging and growing faster than can be measured at the moment
  • Home-brands are growing with Sellers offering their own solutions including kits and bundles

As you can see, there are a lot of potential opportunities to analyse and help understand but there seems little doubt that this channel is the engine room of growth for this important segment of auto parts and accessories sales in Australia and wordlwide.

Feel free to contact myself or the Enform team about how we can help your business perform better in auto parts e-commerce.

 

eBay Changes Listing Rules For Product Identifiers from 1st July

By | Announcements, Automotive, Blog, Comment, ecommerce, Research, SEO | No Comments

ebay_logo

eBay Australia is changing the listing rules for product identifiers in key categories including auto parts. 

As PARts Australia say – “Ignore it and you may pay a penalty in poor ranking. Embrace it and you may leap ahead of your competition.”

Increasing the accuracy of listing information is an important part of eBay ongoing work to improve the marketplace experience for all users.

That’s why, starting 30 June this year, all new listings of branded items in New and Manufacturer refurbished condition will be required to include product identifiers including the item’s brand, manufacturer part number (MPN), and global trade item numbers (GTINs) such as Universal Product Codes (UPCs) and International Standard Book Numbers (ISBNs) in select categories.

eBay uses these product identifiers to help buyers quickly find the items they’re looking for. When you’re selling, including these product identifiers not only has the potential to increase your items’ visibility in eBay search results and navigation, it can improve your placement in search engines like Google and Bing, too.

Read more about the eBay new policy and how important it is for eBay sellers and in particular, those selling branded auto parts.

Power Retail Talks to MotoParts About Auto Parts E-tailing

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MotoParts-266x266

Selling automotive parts online has proved challenging for MotoParts, but developing a parts-centric approach has helped the company progress. Power Retail chats to MotoParts’ Scott Shillinglaw to find out more.

With a long history in the B2B commerce space supplying wholesale auto parts throughout NSW and Australia, MotoParts decided to launch into a completely new sales channel to leverage their existing business model. As one of the largest online marketplaces, eBay was the obvious choice for MotoParts to start their online presence and drive a whole new section of growth for the business.

This decision was prompted by the rapid growth of the Australian online automotive parts sales industry (estimated to be worth $380.3 million in 2014-2015 and growing annually at a compounded rate of 17 percent) centred on New South Wales, Victoria and Queensland – areas that have the highest number of kilometres driven.

Power Retail magazine caught up with Scott Shillinglaw, Online Director for MotoParts, to see how the transition came about and how they used PARts Australia for data and technology.

Read more about MotoParts’ Parts-Centric Approach using PARts.

Enform, Motor Media and PARts

By | Announcements, Automotive, ecommerce, tools, Web Design, Web Store | No Comments

SuperPro_Tradeview_hybrid

Enform has always tried to work closely with the best service providers. Two of these are Motor Media and PARts Australia

Enform has expanded these relationships with greater collaboration for the development of specialised auto parts web sites for e-commerce, online parts lookup and sophisticated parts interpretor functionality.

Motor Media have years of experience in auto parts and accessories and have developed a number of web sites for leading aftermarket brands. They are a preferred PARts integrator for CMS based web sites using Joomla or WordPress as well as developing custom solutions including e-commerce. The team at Motor Media offers a one-stop-shop approach to web and graphic design.

PARts Australia provide an e-cosystem of applications and tools that help auto parts brands, suppliers, sellers and workshops manage, distribute and share product and fitment data. Their mission is to make suppliers data available wherever their customers are and in whatever format they need it in using global standards. Most importantly, its your data. You can read more about PARts Web Development services here

With this closer collaboration PARts Australia will be available to provide coding services for back end data integration and related scripting to support Motor Media’s front end expertise.

This combined approach brings together the best of both worlds with cutting edge UI and UX development coupled with some of the best parts and fitment data and code experts for a win-win.

Enform will continue to provide co-ordination and or project management services as required but this approach should speed up development of new services, sites and solutions while delivering solid support for our auto parts customers.

 

B2V2_AFI_Search_1

 

 

MotoParts Dives into eBay with an E-commerce Solution

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MotoParts on eBayRecognized as one of Australia’s top distributors of automotive parts and car accessories, MotoParts boasts of a colourful history in the B2B segment of the market, offering wholesale auto parts throughout NSW and Australia.

In an effort to leverage their current business model, the company decided to dive into a new sales channel, opening a new section of potential growth for the business. As one of the world’s largest marketplaces on the Internet, it made sense for the company to jumpstart their online presence on eBay, this according to MotoParts online director Scott Shillinglaw.

The Need for an E-commerce Solution

To launch a new online sales channel on eBay, MotoParts needed a comprehensive e-commerce solution capable of handling hundreds to thousands of product listings—a solution that could keep up with MotoParts surging online business.

According to Shillinglaw, MotoParts required a robust e-commerce solution that could help manage product feeds, with the additional feature of transforming product data and making it ready for eBay listing. Moreover, the solution had to mesh with the company’s ERP system, in particular, product, pricing, and inventory data, together with eBay and MotoParts’s e-commerce website.

The challenge with automotive parts suppliers is that the complexity and sheer volume of product parts information makes it difficult to find a working e-commerce solution—one that could withstand the impending massive increase in automobile models and corresponding parts within the next few years.

Shillinglaw said that MotoParts needed their e-commerce data to be in a coherent format, allowing their e-commerce managers to list products on eBay by part and vehicle compatibility, all in such a way that entices customers to make a purchase. If the product isn’t presented in a compelling manner, it won’t lead to sales, he adds.

A PARts Driven Solution

MotoParts turned to an e-commerce solution recommended by PARts, an online solution Enform is certified to provide.

With the new e-commerce solution, MotoParts was able to automate and integrate all their product data into one easy-to-access database, through a tool specifically designed for automotive parts content.

MotoParts can now manage and access their product data in one centralised solution, with orders placed on eBay extracted and standardized into a singular format—integrated with the company’s own ERP system. And you can read more about how MotoParts went online profitably with PARts.

MotoParts eBay Listing

Benefits

After just a few months of using the PARts-recommended e-commerce solution to open a new sales channel on eBay, MotoParts saw a surge in total revenue by at least 5 percent. The complete MotoParts e-commerce solution was also fully functional in just a few months. The company also saw a drastic reduction in resource time and IT expenditures.

But more importantly, the addition of a solid e-commerce solution into the company’s business foundation means they can now open as many online sales channels as they want, with very little work required.

You can read more about PARts and auto data opportunities here

Australian Automotive Aftermarket Sign Historic Repair and Service Information Sharing Agreement

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AAAA_New_141216

 

Finally, after five years of intense campaigning by the Australian Automotive Aftermarket Association (AAAA), the heads of the biggest stakeholders in the automotive industry (both from supply and service sectors) have signed a historic Heads of Agreement on December 15 to free the consumers in their choice of vehicle service suppliers and repairers.

The move ensures that vehicle telematics (information gathered by sensors on vehicles for a wide variety of purposes, including tracking, navigation, safety and mobile data) in this case, information very critical to having one’s vehicle repaired and serviced, will be made fully available and not hoarded by just a few players who wish to control the market.

This means even the smallest vehicle service and repair business will have access to critical information in order to fix, service, and fine-tune vehicles – information which was previously only available to manufacturers and their preferred dealers. This levels the playing field for small aftermarket businesses

Bruce Billson, Federal Minister for Small Business, said that the agreement is “a significant achievement for the rights of consumers and all automotive businesses, big and small.”

With the signing of the agreement, aftermarket enthusiasts now have a choice on getting the most affordable and efficient vehicle repair and servicing without fears that work done by small vehicle service businesses will be not up to legal and market standards. This means safe and professional vehicle maintenance everywhere in Australia – a very welcome news indeed for Australian aftermarket enthusiasts.

The agreement includes:

  1. Guidelines and governing bodies in the resolution of disputes;
  2. Safeguards to make repair information fully available (even if for a price) to all stakeholders; and
  3. The use of emerging technologies in collecting, processing, transmitting, and diagnosing vehicle telematics while at the same time providing safeguards to owners of data – often the consumers. A report on the progress of these emerging technologies is to be submitted within a year after signing the agreement.

The agreement’s signatories include representatives from the Federal Chamber of Automotive Industries (the car industry), the Australian Automotive Dealers Association (the new car dealers), the Australian Motor Industry Federation (retail motor trades), the Australian Automobile Association (car owners) and the AAAA.

AAAA Executive Director Stuart Charity was quoted as saying “the agreement is a win-win-win for all parties. It promotes consumer choice for owners of 17 million vehicles – particularly those in regional areas where there are fewer dealerships. It helps 22,000 small workshops remain business. And the vehicle manufacturers will earn a fair price for the data that they share.”

This is a welcome news not only for Australian aftermarket enthusiasts but for the whole Australian aftermarket sector as well.

Even as Australia’s vehicle manufacturing supply sector declined – underscored by Australian car manufacturer Holden’s decision to stop making cars in Australia by 1917 – the automotive aftermarket manufacturing sector surprisingly grew – fueled by Australian boom-time cash and Australians’ passion for vehicle customisation. The aftermarket sector is a $4 billion/year industry in terms of sales, employing 36 percent (16,000 out of 45,000) of Australian auto industry workers. These auto workers, along with aftermarket enthusiasts, all stand to benefit from the historic vehicle repair and service information sharing agreement.

Enform strongly supports the automotive aftermarket and see’s great opportunities for our customers in this area with knowledge share and marketing through information.

The Current State of Motor Sport in Australia, Marketing Opportunities

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Motor Sport in Australia

Motorsport involvement whether as a participant, sponsor or parts supplier can provide some big Brand affiliation benefits for your business or Brand.   These need to be articulated through all your communications both on and offline, and above and below the line. Successful cross promotion and association is an important way of linking your brand to the BIG business that is Motorsport.

A Look at the Current State of Motor Sport

CurrentState

The Confederation of Australian Motor Sport (CAMS), the governing organisation in Australia’s motor sport scene, recently published a study highlighting the important role played by the motor sport industry in the country. The study, conducted by multinational professional services firm Ernst & Young, delved into the economic contributions, value add, and employment figures surrounding the industry in 2013.

Also included in the study are figures on the number of participants, car clubs, and motor sport venues across Australia, with data sourced from more than 4300 surveys completed by clubs, category managers, and other participants, as well as financial statements and databases figures from governing bodies.

Some interesting statistics gleaned from the Ernst & Young study include:

Volunteers

Around 17,419 licensed volunteer officials in Australia are to be thanked for running most of the country’s annual motor sport events.

Culture

Motor sport commands a sizeable share of the Australia’s sports industry, being the fourth most watched sport in the country. In addition, more than 80 percent of those surveyed reported ‘being with family and friends’ as an important reason for their involvement with the scene.

Regional Locations

Over 30 percent of participants come from regional areas. Meanwhile, 85 percent of motor sport venues are accessible to those in regional locations.

Competitors

Motor sport competitors reportedly spend anywhere between $12,000 and $15,000 per year on sport-related activities. For those in the aftermarket industry, it’s worth noting that competitors spend $60,000 motor sport vehicle purchases and initial modifications.

Venues

The biggest impediment to continued participation in motor sport events is the current condition of tracks and venues. The majority of those surveyed claimed they would participate more if these were improved.

Participation

Participation

Over 150,000 people participate in motor sport all over Australia, whether through competing, officiating events, or participating in car club activities and events. The country’s motor sport industry consists of the following closely related components.

  • Auto related industries like the aftermarket industry
  • Competitors
  • Officials
  • Car clubs
  • Governing bodies
  • Events and pro teams
  • Tracks and venues
  • Other participants (non-competing car club members)

Motor sport also encompasses a wide range of disciplines, such as:

  • Speed
  • Circuit
  • Speedway
  • Rally
  • Drag racing
  • Off-road
  • Go-kart racing

Both Circuit and Speed take up the largest share in audience and participation, direct output, employment, and valued add among motor sport disciplines in Australia. Together, the two account for more than 60 percent of Australian motor sport industry output.

Industry Output and Value

Australia’s motor sport industry is directly responsible for more than $2.7 billion in direct industry output, $1.2 billion in added direct value, and generating more than 16,300 jobs.

Output&Value

Other Benefits

Australia’s motor sport industry provides other notable benefits, chief among them its positive contribution community development.

Motor sport has deep roots in Australian culture, with an influence encompassing more than just the 76,377 people who compete or officiate in events. For instance:

  • Half of all motor sport participants, or 76,775 of 153,152 participants, may not be competing or officiating in events, but they are active in other club activities related to the industry.
  • In 2013, the 1,391 motor sport car clubs that took part in the survey held around 6,247 events.  The 460 car clubs affiliated with CAMS held 4,311 events, with more than half being non-competitive social events.
  • Family participation is strong in the motor sport industry, with 80 percent of survey participants reporting ‘to be with family and friends’ as being ‘very important’ and ‘somewhat important’ when choosing to participate in motor sport.

Enform can help you capitalise on your association/involvement with Motorsport by working with you to create Marketing strategies that will maximise the exposure of your Brand using the mega Motor Sport Industry Publicity machine. Contact us today to see how we can help.

Auto Parts Aftermarket Online, e-Commerce and all that PART 1: What’s it all about and why should I care?

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Reprinted from Undercar Review magazine – April 2014 issue 

By Jim Gurieff of PARts Australia www.partsdb.com.au

PART 1: What’s it all about and why should I care?

In 1997 the Australian new vehicle market was around 650,000 units and of that, Falcon and Commodore platforms accounted for over 200,000 or 30% of the total new cars sold.

Jump to 2013 and the number of new cars sold was over 1.13 million and of that, less than 70,000 were Commodore or Falcon based.

Meanwhile, the AAAA reports as part of its latest industry report – “Workshops and repairers crave an integrated vehicle and product fitment lookup with VIN and service data as part of a point-of-sale solution.”

With over 200 unique new models added to the Australian market in 2013 we now have one of the most diverse vehicle markets in the world spread over a relatively small volume base. With the demise of local manufacturing and an inevitable pure import market the industry has to adjust to knowing more about more vehicles at an increasing rate.

At the same time, the range of product available today is more diverse than ever before so accurate and timely service and product information is even more important.

Customers Looking For Outcomes

To add another layer of complexity, our customers are using the web more and more for product reviews, service information and price shopping for products and services while increasingly demanding of the way in which this information is provided. I want it now and when  it suits me.

So back to the question, why should I and the undercar industry care?

Because every industry needs to adapt to the changing environment and the connected digital world is accelerating the rate of change.

We are product and service providers and we need to remember that the end user customer or consumer is actually looking for outcomes and not just parts or service. They are most often driven by the need to repair a fault, pass registration, upgrade their vehicle or any number of other actual outcomes.

It’s rare that a vehicle owner wakes up one day and thinks that replacing their muffler would be a good thing to do that day. So when they do think about the problem, potential outcome and solution, all the industry players need to be ready to provide the answers and solution.

In simple terms, it’s about giving the customer what they want. A simple enough statement but not always considered by some in the aftermarket parts industry.

The following has been put together in conjunction with one of our digital and online specialist marketing partners, Enform Networks. This 2-part summary pulls together research, advice and case studies from various sources to help explain the current environment and the where the market might be headed.

The last few years have seen an explosion in online retail sales of auto parts. Major players like Amazon and eBay are enjoying  significant growth in many sectors of online retail sales and that clearly includes auto parts and related products. IBlSWorld reports a 13.3% annualised growth in Australian online automotive parts and accessories sales between 2008 to 2013 while US numbers are even stronger.

Clearly we are seeing a migration toward online fulfilment of retail consumer demand while trade and reseller purchases are moving toward closed user group solutions offered by the industry wholesalers and their business-to-business (B2B) portals. Many of the same wholesalers are also offering retail solutions to complement existing bricks-and-mortar or physical services with many more building virtual stores and online outlets that often exceed the service delivery offer available through their retail store fronts, try free shipping direct to the customer’s door!

Future projections are equally bullish with continuing double digit growth expected across all categories with reports specifically mentioning traditional “hard parts” categories including undercar brakes, shocks and suspension.

So it’s not just “S & G” lines (as the hard parts purists sometimes call accessories) but all manner of parts. This is an important misconception that poses one of the biggest threats to traditional parts sales and service thinking and is just one area of Significant risk to parts suppliers and sellers.

Along with our online specialist partners, we try to help our clients adapt to the changing nature of customer expectations and their channel preferences because after all, it’s about giving the customer what they want and also where they want it.

It’s natural to resist change. This applies to every level of the distribution chain and across all industries but some businesses are more resistant than others.

The area of data standards is particularly tough as suppliers and sellers struggle to defend and justify their own carefully cultivated data silos. Having worked in the aftermarket for a few decades, I’ve seen the changes to fitment cataloguing and product data creation and management.

Once the digital age picked up speed in the ’90s, we saw the beginning of the age of data-divergence as more and more suppliers and sellers built their own data solutions imagining that this would somehow provide a significant and durable commercial edge. In many cases it did and some of these are still working well however for many others, it proved to be a distraction and a costly diversion from the core business of making, selling and servicing parts.

Parts

After all, how many different versions of a Commodore VT 6 cylinder sedan data record do we really need?

The ’00s saw a maturing of the discreet data silo model as more and more sellers realised that having “another industry standard” that their suppliers would need to contribute to was actually working against them both in terms of cost and support. Meanwhile, the European parts suppliers created the Tee Doc industry standard (as one example) and the AAIA in the US launched the ACES/PIES system to help their industry.

The last few years have seen an acceleration towards standardisation with more and more suppliers and sellers adopting some sort of standard, a time of data-convergence. This is good news for both the industry and consumer and helps the aftermarket compete better while supporting the aims of programs like the AAAA Choice of Repairer campaign.Which leads us back to the real point and reason for the automotive parts aftermarket, selling more aftermarket products to auto parts consumers!

Online channels are not a silver bullet to rescue flagging sales. It’s a different way to market and requires different skills and resources and doesn’t suit all types of products. However, according to the National Australia Bank, the value of annualised online retail sales for the 12 months to end February 2013 was $13.1 billion or 5.9% of all retail spending with a year-on-year growth of 19%.

If you don’t have an online strategy or your strategy is not delivering that sort of growth rate, you’re falling behind. Embrace the opportunity and make sure you’re visible where your customers are.

Next time we’ll look at some practical ideas, suggestions and case studies to help you think about a strategy that suits you.