The Amazon Effect: By serving up goods at an almost laughably competitive price difference than most storefronts, along with a delivery time and tracking experience that resembles the perfect blend of Jimmy Johns sandwich delivery and Uber ride share combined, ecommerce is waging war on the consumable goods market, with service parts serving as their one of their top targets.
So, what does this mean for manufacturers when it comes to staying in the ring? It means that those who want to survive this new wave of technological expectations need to embrace systems like intelligent price and inventory management, along with an infusion of emerging tech advances like smart wearables and predictive IoT.
We’ve been sharing incredible insights from industry thought leaders into this year’s trends and topics affecting after-sales service from our eBook, “2018 After-sales Service Predictions: Strategies for Empowering Manufacturers to Deliver Game-Changing Value.” This week, we passed the mic to Gene Metheny of Carlisle & Company to give us his take on major trends that could fundamentally change entire industries in 2018. Here’s what he had to say about eCommerce and its impact on manufacturing today.
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I work with the world’s leading automotive and heavy equipment manufacturers to ensure they properly prepare for the future, focusing specifically on the after-sales service business. Several key trends stand out based on recent conversations with these OEMs and recent independent research studies. Trends like 3D printing, telematics, predictive analytics and service lane technology are just a few factors impacting industries today, but manufacturers need to capitalize on them to succeed in this ever-evolving world.
Major ecommerce players, specifically Amazon, are becoming very aggressive in the service parts space, and are doing so at a rapid pace. The online retail giant researched aftermarket parts in 2016, and by the close of 2017 is already nearing 25 million listings and $4B in revenue. Amazon recently launched “Amazon Auto,” a site tailored to automotive service parts based on make and model of your vehicle, as well as “Service through Amazon,” a site intended to find local auto servicers near you with pre-established repair prices. In addition, they are partnering with many aftermarket companies including Bosch, Federal Mogul, and YourMechanic.
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It will be interesting to see the investment Amazon continues to make in the space and how its marketing and capabilities will evolve. The company has the potential to make a major impact on the B2B market, opposed to individual consumers, as few consumers are able to repair their personal vehicles or appliances themselves. However, OEMs with dealer networks or fleets need to beware, especially if parts are available more quickly if they are purchased with Amazon Prime. OEMs should get ahead of this trend as much as they can, and ensure they have sufficient service parts planning, execution and pricing capabilities in place to remain competitive.
The motor vehicle industry is facing tremendous change over the next 10-20 years that will fundamentally change the business. Manufacturers that fail to respond and embrace these changes risk their financial future. It is impossible to stop the changes that are coming and so companies will have to adapt rapidly.
Vehicle manufacturers need to be investing heavily in vehicle automation, telematics, big data analytics, 3D printing, and integrated proactive service capabilities. They need to develop a comprehensive business and channel strategy for shared vehicles and changing mobility requirements. They need more frequent evaluations of parts distribution networks that account for changing product mix and volumes. A failure to embrace the future will leave them wondering, “who moved my cheese?”
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Want more insight from Gene Metheny and other industry thought leaders? Download our ebook today to hear more on the major trends manufacturers will see in 2018 and beyond, and how to implement new business processes and technologies to win.
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