Numbers can say a lot. But as a wise teacher once told me, a number by itself only tells part of the story. A number's true value can only be understood within the context of other numbers.
This brings me to our third annual Professional Automotive Repair Technician Survey (PARTS) Supplement, which you found polybagged with this month's issue of Counterman. This supplement presents data compiled from a survey of thousands of repair shops around the country. The goal is to understand a repair shop's buying and sourcing criteria, to get a better grasp of how technicians choose the sources they choose and why they choose the brands they install on their customers' vehicles.
During the first two years of the study, (2000 and 2001), we presented only a single year's worth of data. Now that we've been conducting this survey for three years, we are able to show this year's results within a three-year historical context. I think you'll find the trends very interesting and maybe even a little scary.
So what do these numbers tell us? It's clear that traditional jobbers face an ever-increasing challenge to maintain and grow their service-dealer market share. In some specific product categories, traditional jobbers have lost as much as 21% market share!
Where is this business going? If you guessed to the retailers, you're only partially correct. Clearly, OE dealers and direct WDs are also making advances into what was once the sacred ground of the traditional jobber. In fact, across 15 different product categories for which we've collected three years' worth of data, retailers have had an average market share increase of 2.4%, while OE dealers and direct WDs have, when combined, gained some 5.2%.
While these numbers may seem insignificant, keep in mind that if these trends continue, retailers will be closing in on 20% of the service-dealer market by 2005. Direct WDs and OE dealers will each own about 15% market share.
Traditional jobbers still lead the way in the battle for independent service dealer business. But, their grip on the market is beginning to slip.
These trends have a damaging effect on the financial health of the independent jobber. In the past, a jobber might have enjoyed more than 85% of a service dealer's business. Under this scenario, the jobber could measure his overall margin at that account and adjust his prices and services accordingly. Today, however, that same jobber may be getting only 60% of that account's business while having to provide more services at an overall lower margin across less volume.
Sound fun? Well, buckle up, because it's just starting. The traditional jobber won't die out completely, nor will retailers control the lion's share of the independent service dealer market any time soon. But, the battle doesn't involve just these two entities. OE dealers and two-step WDs have made, and will continue to make, their presence felt.
Take a close look at the PARTS Supplement. Use these numbers to benchmark and guide your business. The numbers tell a story. Make yours one with a happy ending.