CHICAGO — Who says the family business is going by the wayside?
While mom and pop stores might be closing in some industries, including some family-run independent shops, are ending after multiple generations, some families have a solid hold on their market shares in today’s aftermarket.
Talking at the 2008 Global Automotive Aftermarket Symposium (GAAS), it shows that views of the industry have changed in these family businesses from globalization, technology, collaboration and more.
And just like a true family, communication and working together across all of these ideas is key.
The WD and jobber level probably has the most collaboration with other parts of the aftermarket, as these businesses work with both repair shops and manufacturers. Craig Bond, senior vice president, Bond Auto Parts, says his business has a very good connection in the aftermarket through inventory systems where service dealers can go into the systems, see inventory, order parts and print invoices.
From the repair shop side, Doug Reevey, president, Autotec, adds that the collaboration Bond alludes to must spread to the other levels.
“I think collaboration within the three levels of the industry has to be more proactive about solving the industry’s problems,” he says. “The problem I have is going to filter up to the distribution center, and the problem Dominic (Grote) has at the manufacturer level is going to filter down the chain.”
Dominic Grote, vice president, sales and marketing, Grote Industries, adds that there are more opportunities for collaboration now than before. But it starts with trust.
Such collaboration – and communication as well – is important when looking at other issues facing the aftermarket today.
Globalization hits all levels
“My first experience with globalization was my first visit to the AAPEX show when I first started with the company and had a chance to walk around the show with my father, and we went down to the dungeon at AAPEX,” Grote says. “It was put to me that these people were trying to take the food off our table.”
Well, his and the company’s view has changed to be more of an opportunity than a challenge. That also is the case for other levels of the distribution channel, even down to the technicians.
“Two years ago, I would’ve said globalization does not impact us whatsoever,” says Reevey. But with increasing inventories and more and more SKUs, he quickly realized that’s not the case, especially as he and his fellow technicians work on more vehicle makes than their dealership competitors.
“When we look at what they have to know in terms of knowledge…we have to look after all of them,” Reevey says. “At the same time, we’ll discount our labor compared to them, we’ll discount our parts. We don’t service the vehicle in the same degrees they do, talking about preventive maintenance. To some extent, it’s almost a recipe for disaster. We’ve got to know more. We’ve got to invest more in terms of tools and yet it’s all about price when it comes to the consumer.”
Part of that is where the parts are manufactured, which affects the distribution level, to which Bond also says the global economy is affecting his business as the generations grow.
“In generations past, our business would be affected by our local economy, our state’s economy and possibly our country’s economy,” he notes. “And now, our business is affected by economies all around the globe.”
The economies of those countries where parts now are produced is the biggest deal, Bond adds. But working with all of these other countries and bringing down market prices has made all of the channels stronger, and forced them to be more efficient.
Getting technical with technology
Coming back home and focusing on technology also is a big issue, as technology enables all three levels of the panel to keep their family businesses in order.
For example, shop tools are not a luxury, as Reevey puts it, and technology also is used to bill customers and run the business properly. Also, recognizing the technology the consumer has is important as well, especially as the do-it-yourself market is easier to get into thanks to the Internet.
Internet-like connectivity is helping shops, as Bond reports that his distribution business is putting in place initiatives that will allow acknowledgements, purchase orders, invoices, ASNs and more to be traded. This follows the paperless process the company put into place several years ago and added to its jobber stores later.
As for the manufacturing sector, Grote says product technology is the biggest key in this topic. Light-emitting diodes (LEDs) are changing the replacement cycle for lighting, forcing Grote Industries to change how it is moving forward.
The panel also highlighted the biggest challenges facing the aftermarket, such as adapting to change, Right to Repair and getting good people in the industry. John Washbish, president, DRM and Under Vehicle Group, Affinia Group – who was “kicked out” of his family’s distribution business – moderated the panel.