With 11 new retail and service locations opening in the last 19 months, and two more currently breaking ground, Strauss Discount Auto has been successfully mastering its strategy to cultivate the do-it-for-me market since Chairman and Chief Executive Officer Glenn Langberg took post. Operating in some of the most densely populated ADIs in the country, Strauss’ reach covers New York, New Jersey and Philadelphia. With plans for at least five more stores in 2005, each new location is built with eight service bays. Sixty-five of Strauss’ 103 locations now have service bays.
“Five years ago, probably 35 percent of our business was service,” says Joe Catalano, the chain’s president and COO, who explains that although the company has always had some service bays, they are now “elevating ourselves to becoming more of a service company.”
For each of the newer stores, service is accounting for half of their business, reports Catalano, who quickly points out that they are not discounting their retail business, they are just trying to enhance their position as a major player in the do-it-for-me marketplace, as the number of DIYers continues to decline in their region and stiff competition engulfs the commercial business.
“I saw the tremendous opportunity that Strauss had to re-image itself and capture additional market share in the growing DIFM segment,” adds Langberg. He says that when he purchased the company in 2000, it “had the seeds of an infrastructure to capture this business, and I knew, with the right plan, and the right people, we had a winner.”
Langberg has also expanded the business through the development of a large-scale fleet maintenance program, by upgrading the physical layout of each store and investing in employee training and education.
Since his appointment five years ago, Strauss has increased its sales by about 25 to 30 percent.
They introduced Cooper brand name tires to their customers a few years ago and added Michelin and BF Goodrich just last year. “We are gravitating ourselves to being more of a full line tire dealer,” claims Catalano.
Besides tire sales and installation, the corporate-owned chain considers itself a full-service provider that handles all major undercar and underhood services. They also recently made a $1 million investment in diagnostic and inspection equipment from Snap-on.
“We are trying to get to a point where we have a certified diagnostic technician in each of our stores,” Catalano told us. He explains that many in the aftermarket are starting to “shy away” from this type of service because it brings with it costly equipment needs, an increase in high-level technician training and time-consuming diagnoses. But, according to Catalano, “We are looking to become a major player. We want to compete with the dealer on this. We are jumping into the water with both feet.”
He says they currently employ several ASE certified technicians, though not all employees in the bays hold the blue seal. They encourage the certification by offering compensation programs, and they also have their own rigorous training programs — developed both internally and by vendors — that they put their technicians through at their South River, N.J., headquarters.
Their growing role in the service industry has resulted in an increase in parts purchasing from their jobbers. “We do a lot of jobber business.” Catalano explains that they don’t stock 100 percent of what they need. “We have a very brisk hot shot business.” And, since they are expanding, Strauss is looking for ways to create more synergies.
“We are a large customer to many of the jobbers in our area and are always looking for ways to enhance that position.” Delivery speed and inventory are very important to Strauss.
With plenty of ways to draw in consumers — including everyday service, radio advertising during Major League ball games and Strauss credit cards that reward consumers with 90-day zero percent financing — this company is positioning itself for growth.
