Aftermarket profits by embracing new technology standards

Luckett’s point is that in 2008, the aftermarket industry has enacted and embraced vital data and communication standards, such as AAIA’s Industry Data Standards ACES and PIES.

The lack of accurate product and cataloging data has long been a problem, leading to costly errors in the supply chain. But the industry's investments, says Luckett, are paying off.

“At least two or three proprietary formats you could name five years ago are no longer required,” he says. “I’ve talked with a number of suppliers who say they can satisfy 100 percent of their customer requirements through the ACES formats. To do that a few years ago would have required four or five formats or more. Every time you can take a format off the table you are saving a supplier a lot of money.”

Luckett mentioned several reasons why data and information standards have reached this technical tipping point.

In a study conducted with the National Catalog Mangers Association (NCMA), the AAIA found 90 percent of part lookups begin in an electronic catalog or Web site. The study also found that resellers reported using their paper catalog as much as they use the electronic catalog.

Why the discrepancy?

“When you dig into the numbers, the number one reason they give for turning to the paper is they couldn’t find the information they needed to complete the sale in the electronic information,” Luckett says. “This reaffirms that suppliers need to invest in getting all of the information they have about their products into an electronic form on their Web sites or the eCat systems their distributors demand upon.”

“That’s how you are going to sell more product,” Luckett adds. “When you improve speed to market you are going to avoid lost sales and increase sales, and you are going to sell more premium and upsold product by putting the information you have at the customer’s fingertips.”

As the old generation of countermen who “kept the whole ACDelco catalog between their ears” retire, it is even more crucial to adopt a technology-savvy outlook.

“We’re dealing with a drain of experience and expertise in our parts stores,” Luckett says. “Our old grizzled vets are being replaced with a new generation of parts professionals who grew up playing Xbox, own a smartphone and a third generation iPod. These guys don’t understand why everything they want to know is a click away on the screen.”

Luckett says the AAIA’s service-oriented architecture subcommittee is already addressing the infrastructure that’s needed industry-wide so that people can discover the computing services available and put them.

Luckett explains, “We’re talking about things like PIES on demand and ACES on demand. We’re looking for credit check on demand, warranty approval on demand, parts availability on demand. For these capabilities to evolve rapidly require some infrastructure.

“The one thing you can say of the future for sure is that people are expecting more capabilities, better IT capabilities, faster, better, smarter, cheaper. The days of doing huge IT integration projects where my backend system is going to talk to your backend system through some interface we engineer, that’s gone. That’s old school. Light, nimble, agile integration is where we’re going.”

A number of success stories highlight how practicing industry data standards has helped increase sales, reduce returns and improve profit margins.

Luckett mentions that a leading wholesale import parts specialist who adopted ACES and PIES standards has reduced returns at a rate that is half of the industry average. Customers are getting the right part the first time because of the rich, graphical standards-based data available to them.

CARQUEST has mandated that the companies’ suppliers enlist ACES and PIES. The Auto Parts Alliance has made some bold moves to get all their members fully e-Commerce enabled. AutoZone this year is accepting ACES data, and Advance Auto Parts is testing ACES data.

“All of those examples just makes it a tipping point for the industry,” Luckett says. “Anybody who isn’t on board is already behind and has to figure out how to catch up.”