Will 2008 be great for distribution?

Jan. 1, 2020
Wholesale: Technology at the forefront

Wholesale: Technology at the forefront

When asked about next year, Dave Kimbell simply jokes, "2008? Where did 2007 go?" On a more serious note, however, the marketing manager of the Spencer, Iowa-based Arnold Group of Companies reports there are two strong, related initiatives the chain is focusing on in the New Year: increasing communication capabilities through videoconferencing and other programs, and continued training for both customers and employees.

Because of the headquarters' rather remote location in the southwest corner of Iowa ("We're a three-hour drive from Omaha, Neb., so even if you fly in, you have a long drive ahead," Kimbell admits), videoconferencing has been a welcomed option for both meetings and employee training.

"We've been using it for about a year now," Kimbell says. "But we plan to use it even more heavily next year. It's especially great for communicating with vendors, because they don't have to make travel arrangements just to meet with us."

In addition, Arnold is in the middle of a rollout of thin client computers in its stores to let counter staff look up inventory with ease. "There's just so much that's not in books anymore. This allows us to scan products," Kimbell says.

Mike Emley, co-owner of San Jose, Calif.-based All Parts Auto Stores, also is looking at ways to harness new technologies to better business.

"We've been doing such volume at our four stores that our infrastructure needed an upgrade," he explains. A new phone system now features caller ID, auto attachments and even a way to code customers. For example, when the phone number of a longtime customer who particularly dislikes being placed on hold shows up in the caller ID, his preference is flagged digitally on the display so the counter person knows how best to handle the call.

All Parts uses Wrenchead's service, which Emley describes as "taking a quantum leap forward" in recent years.

"It's been said that 30 percent of the industry is e-commerce," he adds. "We're going to try to catch up to that with Wrenchead."

The Parts Plus affiliate also has been working on remerchandising its four stores and in 2008 will shift focus slightly to restructuring the flow processes, examining its best practices on filling orders and other tasks. "Sometimes our back room is what we like to call 'highly organized chaos,'" Emley teases. However, with no employee turnover, he believes All Parts is in the position to build upon the teamwork that's already in place. It helps that the company recently updated its inventory management system and is in the finishing stages of converting its sales teams on both the wholesale and retail sides to using PCs.

"And on the wholesale side, we're investigating paperless delivery," Emley notes, citing UPS' handheld signature capture devices as an example of the technology in use. "We're not ready to move on it just yet, but the costs are coming down and it seems to offer a lot of benefits."

At Eau Claire Auto Parts in Wisconsin, co-owner Jim Meyers is looking to continually strengthen customer relationships as a way to overcome increased competition. Meyers' two stores, both Auto Value affiliates, are succeeding, and he currently has no plans to stray from the course — "but never say never," he adds.

Purchasing Planert Hydraulics a few years ago also has been a differentiation point, and Meyers looks to continue to capitalize on the distinction.

"It opened some new doors to customers we didn't know existed," he admits. "We can sell more parts to the hydraulics customers, and for our parts customers, it's another service they didn't have available before."

Retail: Keep customers loyal

Ken Price, president of Westbay NAPA Parts, based in Port Orchard, Wash., will have a very busy 2008. His eight-store chain, which includes one paint and machine shop, switched to the NAPA flag in November, gaining four additional area NAPA stores in the process.

"It's been very exciting," Price admits, noting that the process has been nearly a year in the making and involved a lot of "hurry up and wait" time. "There have been changes as far as the look of the store and the new signage, but I don't anticipate any changes to the way we do business as an independent."

Dennis Henneman, co-owner of Henneman Auto & Truck Parts, recently added the Echo Power Chainsaw line to both his Sidney and Shenandoah, Iowa, stores. "You have to have something extra in a small market," the NAPA affiliated-Henneman explains, noting the manufacturer approached him to become a dealer. "We've also been offering cell phones for a while, and that's been successful, too."

Earlier this year, Mike Stefano joined VIP Parts, Tires & Service as director of merchandising, although his industry experience spans three decades. When he started with the Lewiston, Maine-based company, however, it was finalizing plans to open a store with a bold new look as part of a pilot program. The newly constructed store opened in Hillsborough, N.H., on Sept. 4. A second store in Stratham, N.H., opened in November.

"It was really interesting to see it come to life after seeing it on paper," Stefano says. "Through every step of the way, what stayed top of mind for us was, 'What are customers going to think? They walk in upset, their car doesn't work right. Let's give them a comfortable, pleasant, even peaceful feeling — that they feel like they're in capable hands.' This really takes things to another dimension."

He adds that the pilot stores are designed to entice customers to shop, with repositioned planograms, redesigned gondolas and a more open vestibule. Large "lifestyle" graphics, such as murals of the open road and of friendly staff, tie in with the product merchandise sold on the shelves below.

"The look is totally different — almost in a class by itself," Stefano says, noting that the visual effects are not unlike what the Target retail chain evokes with its bright graphics and inviting atmosphere. In addition, the waiting room features comfortable furnishings and wireless Internet access.

Another big push for VIP in 2008 is its "Seven Pledges" program, featuring customer-centric promises like "We respect your time and schedule."

"We started the campaign to highlight our commitment to customers," Stefano says. "We began it right after Labor Day, and it's been a focus of ours, helping retain our loyal customers."

Because VIP offers tires and repair in addition to parts, Stefano notes that its business model already is set apart from the majority of the industry. However, it positions them well in what seems to be a trend away from do-it-yourself and toward do-it-for-me customers.

"We're going to see what works," Stefano says of the pilot program. "And take all that we can to implement and expand upon at our existing stores."