If George R. R. Martin were writing the story of aftermarket auto parts business, brick-and-mortar retailers like Auto Zone, O’Reilly Auto Parts, Advance Auto Parts would be the respective Westeros, while online behemoth Amazon would be the ominous army of impending White Walkers.
Well, folks – Winter is coming. Late last month, the inevitable happened and Amazon named the US auto parts industry as its newest target market.
So, what does this mean for our friends in the aforementioned retailers?
Some say, “not much.” Per Bloomberg’s recent reports, RBC analyst Scot Ciccarelli listed Amazon as a “highly dangerous competitor,” but one narrow in scope and focused primarily on “heavy DIY customers,” a.k.a. not your average replacement parts buyer. Ciccarelli’s take is that “most casual DIY customers likely don’t have the information and skill sets needed to comfortably order parts on their own, but experienced users may know exactly what parts that they want/need – and could save money in doing so.”
But that do-it-yourself aftermarket service parts business – it’s a $50 billion industry. And right now, it’s up for grabs.
That’s what makes having a modern price management solution so important. If these storefronts want to compete with Amazon and their insane price margin, which in some cases can be as extreme as 23 percent, they’re going to have to use a much more intelligent pricing system to stay in the game.
To keep up with a competitive market that favors value-based optimization, price revision management and high-speed distribution, aftermarket replacement parts retailers need a flexible pricing system that values those functionalities, but also provides built-in approval handling and advanced analysis capabilities. And that’s exactly what the Syncron Global Price Management solution provides.
With the option to simulate multiple price revision scenarios – like when to revise pricing on windshield wipers based on seasons – and incorporate science-based segmentation, pricing guidance, and advanced analytics, retailers like Auto Zone, O’Reilly and Advanced have the opportunity to dramatically streamline service parts pricing processes – and ultimately go toe-to-toe with the giant that is Amazon.
“Amazon’s distribution network just isn’t designed to serve most commercial customers, given the typical 20 to 30-minute delivery windows required,” Ciccarelli later added, reminding everyone that online isn’t always better for the customer experience.
Sure, Prime has notoriously fast same-day delivery, but it still doesn’t replace the ease and speed of running to the shop around the corner mid-project. Not to mention the extensive knowledge that these retailers have accrued on auto parts over the years, rivaling the predominantly book, electronic, and apparel-oriented Amazon, such realities may, at least for now, guard these retailers from a technology takeover.
According to Memphis Daily News, the hometown herald of AutoZone, the retailer is planning “a massive growth push for the spring.” With plans to hire more than 12,000 new full and part-time employees nationwide through April, including individuals like parts sales managers, sales reps, delivery drivers, and hub specialists, it sounds like they’re not going down without a fight.
So, as the cold front of Amazon comes creeping into the aftermarket auto parts business, and it’s looking like our armies are dwindling – take heart, for the dawn of innovative and modern price management solutions is today.
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