In the ever-evolving landscape of the Canadian automotive aftermarket, jobber auto parts stores face a unique set of challenges and opportunities.
With a decade of experience managing and owning a group of auto parts stores, I’ve observed the industry undergo significant shifts, particularly in the realms of consolidation, technology adoption and parts proliferation.
Let’s explore both sides of the coin each area presents.
Consolidation
The golden age of change that the Canadian automotive aftermarket is currently witnessing could be termed the ‘golden age of consolidation.’ Major players, like O’Reilly’s acquisition of Vast Auto Distribution, UAP and LKQ/Uni-Select’s ongoing M&A efforts are reshaping the industry.
For jobbers, understanding the implications of these consolidation trends is crucial. Whether it’s capitalizing on exit strategies or strategically integrating with M&A activities, jobbers must recognize the changing dynamics.
As the focus shifts from price discussions to creating a unique selling proposition, the keys to thriving lie in maintaining a financially healthy business, optimizing staff performance, ensuring operational efficiencies, capital reinvestment, embracing technology, and securing access to inventory.
Technology
It’s time to embrace evolution for success. In an era where consumers and B2B clients are increasingly educated and demanding higher levels of service, technology becomes a cornerstone for success. The rise of services like Amazon Prime has made parts and supplies more accessible, transforming the business landscape.
Reflecting on experiences with UAP and my NAPA Auto Parts stores, investing in technology has been a pivotal strategy to capitalize on evolving consumer trends and enhance operational efficiencies.
Now, as an integral part of the service chain, the critical importance of innovation and efficiency in the partnership between shops and jobbers is evident. Jobber stores must prioritize forward-thinking technology adoption over traditional methods, emphasizing the significance of their “banner” in the context of their business rather than merely relying on creating specials and buying product lines.
Parts proliferation
There will be a need for balancing risk and evolution. Managing parts proliferation and the associated need for increased space and working capital presents a significant challenge for jobber stores. The continuous expansion of SKUs necessitates strategic decisions on inventory requirements and investments in space-saving technology.
While larger companies can easily reinvest in CAPEX, jobbers face a dilemma — whether to take on more risk with investments and allow their business to evolve or risk losing a competitive advantage. The key lies in finding the delicate balance between innovation and risk, ensuring that investments contribute to future success rather than becoming a financial burden.
As jobber auto parts stores navigate these challenges, a proactive approach is essential. By understanding the implications of industry consolidation, embracing technology for enhanced customer service, and strategically managing parts proliferation, jobbers can position themselves not only to survive but thrive in the dynamic Canadian automotive aftermarket.
The key is to remain adaptable, forward-thinking, and committed to evolving with the ever-changing industry landscape.
Zakari Krieger is the Fix Network, Canadian vice president of Prime CarCare, responsible for the Canadian retail business, encompassing the Speedy Auto Service and Novus Auto Glass business lines
