Truck Parts and Service | Heavy Duty Trucking, Aftermarket, Service Info
Issue link: http://read.dmtmag.com/i/700851
2 L ast month Frost & Sullivan released a new report address- ing what the research fi rm has determined as the "Top 10 trends in the North American Medium- and Heavy-Duty Commercial Vehicle Aftermarket." Though I was unable to access the full report, an executive summary and press release helped me fi nd the report's top trends and some aftermarket predic- tions from the Frost & Sullivan team that produced the document. Grouped into three categories, macro, maintenance and technology, Frost & Sullivan listed its industry trends as follows: Macro: Aging truck population, tech- nician shortage outpacing demand, Right to Repair/CSA creating opportunities. Maintenance: Sustained remanu- facturing growth, strong performance of OEM private label brands, total cost of ownership (TCO) a priority to fl eets, op- portunities in aftertreatment products. Technology: Truck parts e- commerce growing, connected trucks improving maintenance, leveraging big data. To me most of those were unsurprising. The aging truck population and tech shortages are casually or directly ad- dressed at nearly every aftermarket event, as is Right to Repair (though I wouldn't group that movement with CSA like Frost & Sullivan did). The maintenance and technology trends are equally common, and while I wouldn't consider a growing focus from fl eets on TCO as an aftermarket-specifi c trend, it defi nitely impacts how the aftermarket serves its customers. Where I found the report to be most insightful was in its three predictions for the industry. Frost & Sullivan predicts the follow- ing: The aftermarket will cross the $30 billion mark by 2020; the OES channel will gain 1 to 2 percent in market share on the strength of its private-label brands and telematics penetration; and parts e-commerce will likely account for 4 to 5 percent of aftermarket business by 2020. So, one good thing, one bad thing, and a third thing that can be as good or bad as you want it to be. To me that's the story of the entire report. That there's a realistic chance that one twentieth of all aftermarket sales will be online by the end of the decade. And if Frost & Sullivan's fi rst prediction is right, that's more than $1.5 billion in online aftermarket purchases. Wow. Are you prepared to get in on that? If you're not, you don't have a lot of time. Crazy as it sounds 2020 is just 41 months away. And sure, it would be easy to bury your head in the sand and say that pre- diction is high. It very well may be. But we both online sales aren't going away. They are rising for nearly everything else; it'd be unrealistic to sit back and assume the aftermarket will avoid the trend. Besides, all it takes one good experience. That one time a customer needs something and they call you and you just can't fi nd it. You start searching for it, of course you do, but in the meantime they do the same on Google. They beat you to it by fi ve minutes, then while ordering it from another distributor three states over, they realize that distributor also has tail lights and trailer harness at prices 10 percent cheaper than you. And 24-hour free shipping if they reach a spending threshold. Suddenly their next stock order is smaller, and before you know it your profi tability from them is drifting from black to red. Creating an online sales tool won't be cheap, but in the end, it'll probably hurt less than that alternative. T R U C K P A R T S & S E R V I C E | J u l y 2 0 1 6 Staying on the good side of the trend line By Lucas Deal, Editor lucasdeal@randallreilly.com Editorial | Lucas Deal Parts e-commerce will likely account for 4 to 5 percent of aftermarket business by 2020