The data haves and have nots

Jan. 1, 2020
Generally speaking, the automotive aftermarket has little regard for data. Perhaps it is because we never stop to think that around 85 percent of the time an auto part is sold in this aftermarket, it is looked up electronically.

Apparently, I struck a chord or, in some cases, touched a nerve. Few things I have written in these pages have evoked a greater number or broader range of passionate responses than my last column on the slow delivery of application data to our parts counters. Clearly, this is an issue very much on the minds of the aftermarket.

To summarize, that column was about my personal misadventures of attempting to acquire an oil filter for my 2004 Mini Cooper. I discovered that my local parts store had the item on its shelf, but didn’t have the data in their eCat to enable them to match the part with my application. Investigating the issue further, I estimated that bad or tardy data might be costing the aftermarket upwards of $5 billion annually in lost sales — sales that either go back to the OE dealership or are piled on the ever-expanding and increasingly exasperating mountain of “unperformed maintenance.”

In that column I made the seemingly innocuous statement that we all have to start caring about data and the management of it. I suggested that solving this $5 billion problem might be as simple as an effort on everybody’s part at every level in the supply chain starting to care more about our data, its management, and the standards and methods we use to maintain and share our data.

Restating the conviction

Having had a few weeks to think and interact with others on the subject, I stand by that assertion and feel compelled to make the case more poignantly.

Generally speaking, the automotive aftermarket has little regard for data. Perhaps it is because we never stop to think that around 85 percent of the time an auto part is sold in this aftermarket, it is looked up electronically. And computers are only as good as the source data loaded into them. Old adages like “content is king” and “garbage in, garbage out” really do apply to computer data. And all too often, we are loading bad data into our systems. And bad data results in lost sales.

Bad data just happens. It is typically the product of benign neglect. The accuracy of data, nay the need for perfect data, is driven by the rise of technology in this aftermarket. For these brainless black boxes to function correctly, data must be formatted in a standardized way so that it can be processed correctly and the right part identified for a specific application. In a market that has as many footnotes, annotations and exceptions as we do, getting that data into standardized formats is no small undertaking.

eCat companies constantly complain about the abominable condition of most of the data they receive. They contend they are required to spend copious amounts of time cleaning manufacturer-supplied data, which considerably slows redistribution of the data to the counter.

Improvement will only come with wider adoption of our industry data standards. Unless, and until, everyone in the aftermarket not only endorses, but actually starts using the new Aftermarket Catalog Enhanced Standard (ACES), and complement it with full and rich data using Product Information Exchange Standards (PIES), we will suffer this problem. My greatest concern is that in the absence of widespread adoption, data will be held hostage as a point of competitive difference.

A bad trend on the rise

A trend is already developing that will inevitably create two classes of aftermarket citizens: the data haves and have-nots. This trend is not good for our industry.

There is an increasing tendency for the large program groups and large retailers to move away from the third party eCatalog providers and make their own eCat. This is beginning to define that split between the data haves and data have-nots.

Frustrated by the expense associated with third party eCats, and even more so with the delay in getting new applications to their parts counters, some large resellers perceived a competitive opportunity. They reasoned that if they could control the data more efficiently, they could effectively beat their competitors to market with new parts and capture greater market share while improving profits.

My own search for an oil filter for my Mini confirms this theory. The traditional jobbing store where I originally went didn’t have the data that would allow them to sell me a filter they had on one of their shelves. However, a large national retail chain that operates its own eCat did. This enables the large chain to capture business that the traditional store cannot…and it sends a powerful message to customers. How many incidents like this do you suppose it would take before a consumer switches his or her shopping allegiance from the “local” store to a national chain? One? Two? The point is, if consumers discover that one store consistently offers coverage for their vehicle that another cannot, the consumer will quickly gravitate to the source with superior availability.

Resellers seek redirection

Creating your own eCat is a complex, expensive and time-consuming proposition. Yet, the trend is clear. More and more resellers are moving in this direction. My conversations with managers of resellers doing their own eCat confirm that they like the idea of being more firmly in control of their destiny. They see the opportunity to compete more effectively in time by getting data feeds directly from their vendors. They reason that this gives them a window of opportunity to offer their customers availability of some parts as much as six months sooner than their competitors, who are waiting for data to be handled and re-handled before it reaches the point of sale.

As those large entities drop third party eCats in favor of building their own, we’ll see a second and even more insidious result. As the big boys leave, there is a smaller base over which to amortize the fixed expense of the eCat. That will inevitably result in rising costs to subscribers who remain.

Unfortunately, manufacturers suffer as much, if not more, in this scenario. They end up in the middle of a mess, with chunks of their customer base (the haves) each operating different eCat systems. Regardless of how compliant with the standards each attempts to be, some amount of unique formatting of suppliers’ data to fit their structure seems inevitable. The other half (the have nots) will suddenly discover that they are required to pay substantially more for their eCat services.

If history is any teacher, typically when resellers are faced with escalating costs, they turn to their vendors for relief in helping to offset that margin erosion. For the manufacturer, it becomes a double whammy, as their costs increase with the addition of catalog output formats. But most troublesome is the fact their smaller customers will be getting their data substantially later than their better-heeled competitors.

Meanwhile, OE service dealers are supplied full, rich, clean, standardized data for their eCats, via communications networks that function in near real time. That will enable their continued penetration into our business base.

The solution could slip away

If something doesn’t happen soon to expedite the accurate distribution of electronic data to all parties equally, the industry as a whole will suffer. More and more resellers will be forced to create their own eCats to remain competitive. Resellers will spend millions of dollars in software development, data distribution costs will increase for manufacturers, and with this phenomenon a real solution will slip farther and farther away.

We need to remove the incentive for resellers to make their own eCat by compressing the time it takes to get new data from vendors to the point of sale. If the cycle were days rather than months, the tempting incentive to invest hundreds of thousands, if not millions of dollars in creating a proprietary eCat is removed.

Examining this issue from every angle it just makes more sense for the data to move as products do, as directly as possible from the manufacturers to their resellers. Obviously, inherent in this approach is the requisite that all manufacturers adopt and adhere to a standardized formatting of data. Doing so is very much in their interest. The more users that are aligned behind one data format, the less complexity manufacturers have in mapping to different data formats and less cost. Clearly, that format is ACES.

The first way to expedite the distribution of data is for eCat providers to “open up” their systems to allow resellers to add data received directly from their vendors. This would require both eCat vendors and parts vendors to assure that their data is in full compliance with the standards. Alternatively, or additionally, eCat providers might require manufacturers to demonstrate some level of data competency before they would permit a vendor to participate in this direct distribution program. Ample reward for their efforts would result from the expedited delivery of their data to the point of sale. This approach is somewhat problematic since it requires eCat providers to “reinvent” themselves and change the way they are functioning today.

And yet another idea

There is another idea that has been receiving more than idle chatter in the market. It calls for a centralized utility that would assist manufacturers in putting their data into the new ACES relational database format. Once a vendor had used the utility to populate their data and had the data certified, they could use the utility as a repository for the data. In essence, the repository would become a distribution facility for industry standardized eCat data.

Any entity that requires use of the data and is authorized by the creator of the data to receive it, could log on and download it. This would enable resellers or system and eCat providers to view and/or download the most current application and product attribute information in a standardized format from a single common source.

The time for action is now. Something must happen before too many resellers embark down the proprietary eCat path, and we end up with a plethora of formats that drive up costs and needlessly complicate our lives.

Ultimately, whatever path is chosen, we need to act in unison to adopt the standards and move forward. Resellers need to understand that cost, like water, will seek its own level. Cost anywhere in the supply chain eventually will be spread to the entire chain. And manufacturers need to consider the folly of holding their data for ransom in the hope that it will be a competitive advantage. To constrain the free flow of product and application data in any way is to constrain their opportunities in the marketplace.

In the aftermarket of the future, we’ll all compete based on our abilities to add real value, to have the parts our customers need and to consistently deliver the right part in time for every repair…not on access to data.