Survey Says...

Survey Says…

The industry may believe that traditional distributors are losing business to OE dealer parts channels, but the data suggests otherwise.

Next month, we will publish our seventh annual PARTS Supplement. The concept of the PARTS Supplement is pretty straightforward: to determine what factors most influence your customers’ decisions about where, how and why they purchase parts. Over the last seven years, we’ve accumulated a massive amount of data from your valued service-dealer customers, and in analyzing this data, we’re finding some very interesting trends.

As with any research data, reviewing the “numbers” doesn’t always tell the complete story. But, when you can spot trends over a long period of time, they become clearer and harder to ignore. Consistency of methodology is the key, and thanks to the hard work of our Babcox Research department, we have seven years of consistent and conclusive data.

So, what’s the point? If you buy into much of the rhetoric throughout the industry today, you would be led to believe that the OE dealers are earning a larger and ever-growing portion of your customers’ parts purchases. However, our data reveals that while the independent jobber has lost some market share (from 61 percent in ’01 to 55 percent in ’06), the real losses are not necessarily because of the OE dealer. It’s retailers like AutoZone, Advance, CSK and O’Reilly that have garnered the most growth in terms of parts sales to independent shops (from 9 percent in ’01 to 17 percent in ’06). At the same time, OE dealers have grown from a 3 percent share in ’01 to 7 percent share in ’06. Growth is growth, and independent jobbers are getting hit from all sides, but to assume that the OE dealer has been the biggest beneficiary of shops’ increasing willingness to stray from their traditional partners is simply wrong. We must give credit where credit is due: Retailers have gotten better at servicing independent repair shops.

Other industry assumptions I’ve observed revolve around the thought that brands are meaningless in our overly price-sensitive market. Yet, the data begs to differ. When we ask shops how they choose the products they install, the most prevalent response is, “I only use the brand I trust.” How prevalent is this sentiment? In ’01, 65 percent said they only use the brand they trust. Five years later, that number increased to 68 percent. Clearly, shop owners and technicians are a very brand-conscious lot, and if you’re not delivering a brand message to them or attempting to promote and build your brands with them, then you’re fighting an uphill battle. Your brand is your future — invest heavily in it.

Speaking of brands, when we analyze the cumulative brand preference data, another interesting trend comes to the forefront. Aftermarket brands (or parts manufacturers’ brands) are still the most preferred brands by shops and techs. Guess which brands are growing in terms of customer preference? Are they the OE brands from GM, Ford, Toyota and Honda? Or are they distribution and private label brands like NAPA, CARQUEST and Duralast? If you said “OE brands,” you’d be wrong. It’s the distribution brands that have grown the most in technician preference over the past three years. At the same time, technician preference for OE brands and aftermarket brands have each gone down a little.

All this data data helps us understand the nuances of a very mature market. Here at Counterman, we publish it so you can better serve your customers. Keep an eye out for next month’s PARTS Supplement and information on how you can get your hands on our cumulative report when we publish it later this year.

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