How does your group leverage data?
We provide members software that predicts what product will sell from which location, which they use to manage inventory, which improves their ROI. This also reduces returns. We are introducing the application of predictive analytics to recommend services to our service dealer and fleet customers based on historical failure rates by part type by vehicle. This helps prevent the consumer breaking down on the road and provides ethical upselling for our shops.
Is there a magic bullet for parts proliferation? How do you battle it?
The magic bullet is data, but it requires a rifle to fire it and a shooter to pull the trigger. With NetIntell (our data management software) our HQ product managers can apply the massive amount of information available to forecast demand based on the specific vehicles serviced by each location. We invest in training our members and help them implement the software which, when effectively applied, can keep inventory investments manageable and service levels high battling back the effects of parts proliferation.
Are there any parts categories doing better now because the average vehicle age is over 11 years?
Over the past several years, certain categories have done better, such as:
- Mid-grade priced friction, as the features and benefits have begun to approach those of premium friction.
- Control arms have replaced traditional chassis on most cars and hub bearings have replaced wheel seals and bearings.
- Catalytic converters sales have increased as the age and complexity of the vehicles demand closer tolerances to function at their optimum level.
Are shops taking full advantage of your program group’s ecommerce offerings? Why or why not?
Many are, and the numbers have been growing double digits year-over-year. In fact, with some major enhancements in 2015 we enjoyed nearly 50 percent growth on one of the most used sites in our industry. We would obviously like more shops to take advantage of these tools. When they don’t use it, it comes down to habit and comfort level — some shops enjoy the personal touch of the telephone.
Without divulging proprietary information, describe your group’s inventory strategy for slow-moving parts.
We have leveraged ecommerce for quite a few years as a means of selling slow-moving parts. We also leverage our business intelligence solution to reduce the accumulation of slow-moving parts. More can, and should, be done in this area and I expect as proliferation continues, cooperation between WDs and manufacturers will grow.
New car dealers — adversary or customer? Talk a little about that.
Car dealers can actually fall into both categories. As dealerships look for profit opportunities, they strive to sell their OE brands to the independent service dealers. But when they perform repairs on used cars or from an all-makes approach they need aftermarket parts. We hope to provide those parts not carried in their inventory.