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Connected Customer Experience

Parts eCommerce: Best practices for OEMs, dealerships and solution developers investing in service-parts eCommerce

Author Ted Fellowes on Feb-17-2020

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This guest blog was written by Ted Fellowes, President of Fellowes Research.

Preface. 

Parts eCommerce is the fastest growing segment of fixed operations (a.k.a., ‘aftersales’ and ‘aftermarket’) – it’s projected to reach $6.5 billion in revenue – for U.S. car dealers in 2020.  Parts eCommerce is also evolving and innovating rapidly – and faster than in other sectors.  Mastery of parts eCommerce is challenging and starts with understanding the distinct market segments and solution types.  Success also requires deep understanding of OEM data and technical documentation.  Fortunately, success has its rewards: parts eCommerce represents the best opportunity to promote and profitably sustain – even grow – dealer parts sales – in part through powerful capabilities that parts eCommerce best facilitates. 

Buyer Preferences

The strange-but-true nature of customer experience (CX) is that a single disappointment can undo an otherwise satisfying experience.  With that in mind – and with a customer-first orientation – we look first at automating parts ordering from the perspective of buyers.  Recall that fleets and repairers are trying to specify (identify) needed parts accurately – then order those parts quickly (with little or no training) in order to maintain or repair vehicles/equipment – all with little disruption to their current processes, workflows and staff.  Consider the following ‘natural’ buyer preferences:

  • Buyers responsible for multiple makes of vehicles/equipment will not want a different system for every OEM – automotive repair shops service “all-makes” and have largely ignored solutions limited to a single automaker’s vehicles. Parts buyers prefer a single solution that handles all vehicle models – and in the absence of that, the fewest possible solutions covering UIO (units in operation).  Try to find quality solution providers that have or can develop industry-wide solutions.   
  • Buyers typically want to accurately identify the set of parts needed for a service procedure. Is there an existing Service Menu that can be leveraged?  If not, can you start with the set of warranty repair operations (assuming an existing parts list for each)?  One of the most popular eCommerce solutions for independent auto repairers presents the most common service procedures – selecting a “service-op” yields the needed set of parts – for your vehicle. With a click or two, the buyer can buy these parts as if they were a kit. 
  • Wholesale buyers need an eCommerce solution that knows their preferred parts suppliers – by manufacturer – which dealers they have established purchasing, price discounts, payment and delivery terms – and builds orders with pricing, availability, deliver times appropriately. Loyalty has its advantages (for buyer and seller). 
  • Parts buyers are rarely experts in an OEM’s parts and service data – for these non-experts (1) provide keyword, numeric and faceted searches, (2) present related and associated parts as well as the matching results, (3) automatically filter on vehicle/equipment attributes and options.
  • Don’t let perfect be the enemy of good (for example, use the digital parts photos that you have now – don’t wait until new set of ideal photos for all parts is available).

Market & Economic Forces.

  • Identify which market segment to target with an eCommerce solution. In automotive there are four naturally distinct market segments with limited overlap – a solution designed for one will rarely work for another – solutions designed for all rarely are adopted by any.  For example, eCommerce that provides a superior customer experience to retail buyers (for example, DIYers) will not satisfy a professional body shop – their starting points are entirely different (the body shop has a mostly-correct list of part numbers, DIYers start with a service procedure in mind).  In your industry there may fewer or different segments to consider.
  • Map the target market segment to appropriate solution types. The types of parts eCommerce for service-parts are: (1) portals – registered buyers and sellers as ‘trading partners’, (2) dealer parts websites – single seller and open to all buyers, (3) OEM parts websites – various configurations, (4) marketplaces such as eBay and Amazon – which have very particular data listing requirements, (5) direct online ordering – situational requiring buyer to independently have accurate part numbers.  Click here for pdf charts on the first four part types and their attributes. 
  • Don’t recreate the wheel – select a technology partner with success building service parts solutions in general and parts eCommerce, specifically. If you don’t heed this rule, continuing investing at a level sufficient to keep up with the evolving expectations of buyers (and even sellers) may be impossible to maintain.

Anticipate.

  • Look for technology partners that are committed to both continual improvement and to delivering a range of tightly interactive parts and service applications. This will open future options to stay competitive and lower long-run costs. 
  • Prepare for predictive analytics – build transaction data warehouses – then expand your eCommerce implementation to alert buyers and/or sellers of potentially “missing” parts – or other additional parts others have ordered in similar circumstances.
  • Enable OEM pricing programs (including national fleet pricing, dynamic pricing and price matching) then implement and expand for specific programs with the success of core parts eCommerce initiatives.
  • Enable separate points of integration for (1) buyer systems to export vehicle/equipment serial numbers and parts list as well as importing the shipping notice (or invoice), (2) OEM systems (price programs), (3) dealer systems (DMS, parts locator). Add and expand specific integrations as driven by your initial successes.
  • Enable “Good, Better, Best” type presentment of options for parts – then implement for specific opportunities when OEM data is made available.

User Experience (UX).

  • Don’t make users enter the same information more than once – for example, provide easy access to recently entered VINs or serial numbers.
  • Block catalog navigation paths that have no results (for a user’s vehicle/equipment) to avoid buyer frustration – don’t present users with opportunities to err that software can prevent.
  • Slow online catalog responses turn off buyers – don’t make parts buyers wait more than a second or two for a response after the user hits ‘enter’. Design, develop and build out infrastructure to ensure high performance. 
  • Build in flexibility – let users add their part numbers from external sources, facilitate order validation by seller staff as well as correction and augmentation – facilitate parts order collaboration.

Myths & Truths:

  • Myth: Parts ecommerce eliminates knowledgeable, customer-focused staff.
    Truth: When parts eCommerce transactions by-pass knowledgeable, dedicated staff, customers cut back on eCommerce orders and dissatisfaction grows as communications related to sales fall.  At issue is assuring fitment of the parts ordered, ordering all the parts that are needed and agreeing on delivery – and giving the buyer greater confidence (particularly initially).  Typically, CX is maximized when time spent on the phone by the buyer and seller falls by two-thirds to three-quarters – but it is not eliminated.
  • Myth: All eCommerce will be eventually captured by Amazon.
    Truth: Repairers often need parts in hours, parts may be too fragile, heavy or bulky to be shipped via UPS – only high-volume, non-fragile and non-hazmat parts (within specific weight ranges) will perform better on Amazon than other eCommerce platforms.
  • Myth: One-size fits all for eCommerce.
    Truth: eCommerce for service-parts has been successful with at least 5 solution types – and what works in one case, will not necessarily work with another.  The type of parts eCommerce platform required vary with a variety of factors including buyer type (market segment).  
  • Myth: eCommerce encourages a race to the bottom due to hyper-competitive price-focused competition.
    Truth: Completive intensity exists independently of eCommerce – and though price competition may be heightened by eCommerce, not participating in eCommerce does not lead to more higher-margin sales.

Dealers’ Preferences.

  • Dealers primarily want parts eCommerce solutions that are appealing to buyers.
  • Sellers (dealer) want solutions that handle as many service and parts applications as possible several solution providers offer suites of solutions on the dealer (seller) side – Mize, for example, offers its ‘Blox’ covering a wide range service and parts automation.
  • Dealers prefer eCommerce solutions that offer integration with other dealership systems particularly their DMS, parts locator and some OEM solutions.

Special Challenges.

  • Chicken and the egg – getting sellers to both participate depends on getting buyers to participate and vice versa – and it’s harder than that sounds because this must be achieved for each geographic area and each OEM. The best practice is a rolling launch by major metro area.
  • Parts catalogs – consider an existing EPC – otherwise have a technology partner build a next-generation EPC for your eCommerce initiative.
  • Payment – options will vary by buyer types (market segment) – for wholesale, DMS billing will suffice initially – but for retail credit cards and more will be needed.
  • Digital marketing – needs will vary by eCommerce type and targeted market segments.
  • Don’t let the walls between your current data and systems block new ways of putting data together to aid buyers – such as parts photos, parts availability, service/warranty operations and parts sets.

Learn more about Parts eCommerce Best Practices with a Webinar hosted by Mize

Mize is hosting a Webinar with Ted Fellows, from Fellowes Research on February 25th, 2020 at 1 PM EST/12 PM CST. 

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Topics: Best practices, Parts Insights, parts management, Parts Software, Parts eCommerce, service parts, service parts insights

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