Industry weighs in on Amazon threat

Amazon’s selling of heavy-duty truck parts has undoubtedly caused some hand wringing. Although the Internet giant has and likely will continue to create challenges within the industry, Amazon has its limitations. Within those limitation are opportunities for aftermarket parts and service providers.

Bill Wade, managing partner, Wade & Partners, addressed the threat as well as how the online retailer has changed expectations of not only industry customers, but for consumers, in general, as part of a session entitled “The Amazon Effect” during Service Opportunity Learning Days (SOLD!) 2019 held last week as part of Heavy Duty Aftermarket Week (HDAW) 2019 in Las Vegas.

The Amazon Effect is what has changed expectations and it is rooted in its Amazon Prime service.

“I wake up in the morning and Amazon has sent me an email saying, ‘We think you’d like this book.’ Since they’ve sold me my last hundred books, they know what I like. So, I push the button and the next day it’s there,” Wade said. “Why is that important for us? Because everybody — your customers, suppliers, employees, ­­— is [expecting that Amazon Prime type of service]. It’s changing how they think. What Amazon has done is, not so much by selling parts, but it has created this visceral reaction to distribution. [Customers] want it when they want it.”

Some might say Amazon isn’t going to be in the heavy-duty truck parts business because the parts are big and heavy. However, he warns, “Amazon last year built 51 1 million sq.-ft. distribution centers just for furniture. At one point, those furniture companies said, ‘Oh, they’ll never get to us. Couches are too big.’ If you think Amazon can’t ship an axle right now, you’re wrong.”

To combat what Amazon is doing, Wade said, “We have to be first with the personal touch. This is still a relationship business. That’s the way we’re going to beat them.”

Following Wade’s presentation was a Q&A session with industry experts, moderated by John Blodgett, vice president, sales and marketing, MacKay and Company. One of the questions addressed buy the panel was: Where does Amazon getting into the B2B side of the parts market rank in your mindset as you look into your strategic plans for the future. Is it No. 1 or not that big of a concern?

“In the parts and service end of the business, we need to be more proactive on the service side. We need to be more digitally connected with our customers,” said Mike Betts, CEO, Betts Enterprises and Betts Truck Parts & Service. “But how we can go beyond what Amazon and others like it are doing is with our many talented people on our team — that personal touch, that relationship with the customer.”

Betts stressed the value of brick and mortar, a place customers can go to speak with experts who can solve customers’ problems. Amazon can’t do that. We can deliver more value and more problem-solving opportunities for those customers than Amazon ever can.”

Annik Smith, president, Universal Group, said the industry needs to stay competitive and relevant in light of the Amazon Effect and the change it has made to customer behavior and customer expectations.

“We have a number of customers that have website presences and they’re very successful at it and I’m one to think that creates opportunity, especially for small to medium-size businesses,” she said. “Take advantage of that technology, involve your team and get them to embrace change; there’s a lot of opportunities.”

The selling of parts has become segmented. Some transactions require a lot of consultative selling and then there’s the customer who knows the brand, part number and price and just wants to get the part, said Carl Mesker, vice president of sales, Americas, SAF-Holland.

“Distributors have an opportunity to leverage the high-end, consultative sale,” Mesker added.

“Uptime is everything and local inventory still wins,” said David McCleave, director of marketing and aftermarket, Hendrickson. “The other aspect is returns. [The aftermarket distributor] does a fantastic job when someone plops something down on the counter” and the staff is quick to help. “Amazon isn’t going to do that.”

Vince Roth, vice president of sales and marketing, Triangle Suspension Systems, said, “Amazon doesn’t have the opportunity to walk a customer through a problem. All Amazon is doing is offering a product. But the knowledge and experience that is found within [the industry] is completely foreign to Amazon.”

Dayton Parts recently added a product distribution center in Las Vegas, a tremendous growth area. “It’s really about getting the products to the end user through distribution and that’s what we’re working on,” said Walt Sherbourne, vice president, marketing, product management and communication.

Brett Penzkofer, vice president of aftermarket sales, Meritor, said Amazon, which he views as another distributor, is the best at fulfillment, has the best [online] platform from which to operate and number of eyes on that platform and is fantastic at [collecting and using] data.

“But what’s different is all of us don’t just spend our time moving a part but solving someone’s problems,” Penzkoher said. “All of you have successful businesses built on delivering that value proposition to your end customers and building trust in delivering that value proposition.”

Tim Spurlock, president, American Diesel Training Centers, also offered some suggestions for combatting Amazon.

“Promote the services you can provide … in addition to the distribution that you currently do,” he said. “Leverage technology and social media as much as you possibly can. That’s what you should focus on.”

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