It’s Either Online or Left Behind

Ever see a child give a rotary phone a look of suspicion? What is it? Better yet, when was the last time you saw a rotary phone? A phone with a cord? It’s probably been a while, right? We don’t even really have phones anymore if you think about it. We have small handheld computers that we use on occasion to make a call. Hopefully, this is not earth-shattering news to anyone. So why the change? Because technology has evolved and it’s only going to continue to evolve. Likewise, human behavior has changed to match the technology. Together, it’s forced a shift in the way people prefer to conduct business and the aftersales parts industry is no exception. Look no further than how your customers place parts orders: they are going online to buy parts. Conversely, they’re using the phone to place orders less and less.

At OEC, we talk to a lot of dealers and there are a lot of misconceptions out there regarding how people order parts. The bad news? These misconceptions are costing dealerships parts sales. Worse than that? These sales are being handed over to the competition and, honestly, without much resistance. Before you spend more time relying on the phone, thinking your shops want to call all their orders in, consider the following when it comes to how buyers order parts, whether they’re already ordering from you or if they’re sending your potential profits to the aftermarket:

An estimated 90% of shops start parts searches online.

That means a lot of parts searches – and purchases – start and end online. You can keep relying on the phone if you want, though. Just think of your behavior when you’re not at work. How do you shop? Consumer behavior has shifted toward online purchases and this is as true of replacement parts as it is of takeout. Do your shops call you and place orders? Of course. But that doesn’t mean you’re their first stop… certainly not when 90% of them start online. Obviously, you don’t want to be the second option, especially when some shops and buyers are never going to make it to the second option (they get what they need with option 1). From a strict business sense, you want to be the go-to, top-of-mind choice and that means being where your buyers go first: online.

Online parts orders see a higher dollar value.

The average mechanical parts order submitted through an online system can be four times higher than those placed over the phone. Four. Times. Imagine multiplying the value of every phone order you receive by four. Cha-ching, right? Let’s pause for sec. If online orders are higher in value, it means customers are ordering more parts. In fact, the right online system provides illustrations that allow shops to see all the parts they need to properly complete a repair as opposed to piecemeal ordering over the phone. Will you need to invest in an online ordering system? Sure. But if you’re already growing revenue just by accepting (larger) orders online, you’re going to quickly see some ROI. For collision parts, it only takes an average of five to six estimates to be sent to a dealership each month to cover the cost of an online solution.

The competition is dominating online business.

95% of mechanical parts sales go through the aftermarket. Why is this? Well, the aftermarket is absolutely nailing it on the online parts sales. This is because of a behavioral shift driven by the competition: teaching shops and buyers to purchase parts online. If a buyer knows that he or she can go online and buy a part with little hassle, they’re going to do it again. And here’s the truth: online parts sales do work (really well, actually) and the buyers are doing it again and again and again… but through the aftermarket because that’s how they’ve learned to shop online. The stats aren’t just for the mechanical market segment either. 64% of body shops use online parts ordering systems, so if your dealership isn’t online but the body shops are, and the competition is as well… see where this is going. By not having your mechanical and collision parts inventories available to buyers online, you’re serving the competition an advantage on a platter.

Order accuracy increases with online orders.

How does this relate to transitioning away from phone orders? Fewer phone calls. And when you have fewer phone calls, you can get more work done. There’s another point to make here too. Online orders are more accurate because of the available resources that help ensure shops order all the parts they need. This also reduces the likelihood of the shop returning parts it ordered incorrectly (less disruption from processing returns). But let’s say they call you to order parts. Then, let’s say, they miss a part – is it a given that they’re going to call your dealership back? Or maybe they just hop online and go with the aftermarket. Think about it: if 95% of mechanical sales go through the aftermarket, they might just add that missing part to their next order – there will be a next order – and that’s a lost sale for the dealership.

Quick recap:

• Why do you need to be online? Because that’s where buyers shop. That’s where they start shopping and that’s often where the shopping ends… with a purchase. Plus, shops often order parts outside of business hours, meaning online sales happen around the clock, not just when your department is available to answer the phone.
• And the benefit? Your bottom line. Online orders are often higher – several times higher – than phone orders. It only takes a few orders or estimates to cover the cost of enrolling in an online part sourcing program while also producing a solid return on investment.
• What about the competition? Aftermarket wholesalers are dominating online parts sales. Sounds bad? Well, this means buyers are already comfortable shopping online, so there’s no learning curve. Plus, it’s a new opportunity, a way to expand your current sales strategy, grow revenue, and compete with the competition.
• What’s in it for my customers? Online orders are typically more accurate. This saves your customers time and helps ensure they get the right parts, so they can complete the repair in a timely manner, allowing them to provide better service to the vehicle owner. Additionally, when they order parts from the dealership, they’re getting top quality Manufacturer parts.

The point isn’t really about phones.

Okay – it’s sort of about phones, but the point is really about setting your dealership up for success. There are so many opportunities available online and the aftermarket competition is currently taking advantage of them while many Manufacturer dealerships are not. When your dealership starts taking online parts orders, you’re not just providing a service to your existing customers. You’re also expanding your customer base to include new customers. By making your parts available through an online marketplace, you increase the likelihood of attracting more customers, especially since many, many buyers are already purchasing parts online. Ultimately, it’s pretty simple: As a general rule, if you’re looking to grow your business, you probably don’t want to leave opportunities on the table and right now, the opportunities and the profits for replacement parts are in online sales.