Over the last few years, automotive aftermarket use of the Internet has continued to grow, making it a valuable business tool in automotive repair shops.
Autologue CEO Jim Franco, who’s company provides automotive information system services, e-cataloging parts pricing and other electronic data services for the automotive distribution market, spoke recently in an “Executive Interview” for aftermarketNews.com, saying that the Internet has become the most valuable business tool in aftermarket industry.
“The Internet has enabled us to connect businesses simply,” Franco said. “It used to be a one-to-one communication, but now the Internet allows one-to-many or many-to-one communication. It is an information gateway that results in a definite increase in productivity in the aftermarket.”
Who’s Got It
Ask most techs and they’ll tell you the Internet in the past decade has been a useful tool for seeking specific repair information or chatting through e-mail with fellow technicians on a hard-to-diagnose repair.
Babcox Research, the marketing and research arm for the parent company of Underhood Service, recently conducted a survey on Internet usage in the automotive industry. The results of the study not only help us create better features and articles to help you, our readers, but also give us a look into how our industry compares to other markets. Looking at that data, we’ve found that 68% of repair shops have Internet access at the shop, while 32% of responding shops do not.
As connection technology improves, faster Internet connections and more powerful computers are making their way into repair shops. Of those shops that have Internet access, 63% have a DSL connection; 19% use a cable modem; 16% still use dial-up service and the remainder (2%) have a T1 line.
These numbers have basically flip-flopped from past research on this subject. According to a shop survey just four years ago, only 20% of respondents used DSL and 58% were still using dial-up.
Technicians, shop owners and shop staff seem to be spending more time logged in each week. A little more than 25% of shops are on the Internet between four and six hours a week, compared to 15% spending the same amount of time in 2005. Surprisingly, 13% of shops say they are on logged in more than nine hours a week, and 7% spend seven to nine hours each week online. On average, though, 53% of respondents said they spend about three hours of a work week using the Internet.
Most shops, (87%) have the Internet available in the manager’s office. We also found that the average shop has two connections, so the number of shops with Internet access in the service area (shop bays) has grown to 52%, up from 43% in 2005 and only 8% in 2003.
Jeff Sweet, president of Identifix, a company that offers web-based repair information, said he does not see the lack of computers in the bays as a major impediment to usage. “Most of our customers are small shops,” Sweet said. “So, unlike a dealership where the walk to the office or service writer area is referred to as the ‘walk of death’ because so much time is lost, in a three-bay repair shop, the computer — even if it is in the office — is rarely less than 50’ away.”
Sweet said he does see more and more shops putting computers in the bays, and feels confident that techs will have affordable products in the near term that provide Internet access at the vehicle being serviced.
Our research also found that less than half of the survey respondents (44%) have their own shop website. In 2005, the percentage of shops with a webpage was 36% and only 30% had one in 2003.
What It’s For
Shops with the Internet that use it for seeking specific repair information has reached 79%, up from 65% in 2005 and 52% in 2003. Automotive repair information suppliers have recognized this Internet-based growth in repair information access, and have been working to improve their marketing and information data distribution methods to keep up with this trend.
Dan Ramirez, general manager, Automotive Repair Solutions, Mitchell 1, (www.mitchell1.com) explained the speed of which a technician can obtain repair information is one of his company’s greatest concerns.
“The issue of technicians finding repair information as quickly as possible is vitally important in the aftermarket today. With the number of vehicle makes and models and the amount of information required to repair each one, finding exactly the information a technician needs can seem like finding a needle in a haystack,” Ramirez said, adding “We are actively striving toward a goal of helping technicians find exactly the right information they need within two minutes.
“To this end, the Internet is playing a huge role by allowing the real-time sharing of expert information and, accordingly, we have seen a mega-trend of technicians helping each other via the Internet — the Web 2.0 philosophy of ‘We are smarter than Me.’ By plugging into the universe of knowledge, technicians are finding they can operate much more efficiently in the long run.”
Information service provider ALLDATA said it too understands the tech’s “need for speed” and recently announced that it launched an improved website (www.alldata.com) for better repair information searches. Jeff Lagges, general manager of ALLDATA, said the new site is designed as a comprehensive, user-friendly tool for exploring all aspects of ALLDATA, its products and business solutions. A key objective in designing the site for technicians was easy navigation through intuitive buttons, quick links and a comprehensive site map.
“Our new site is a useful tool for demonstrating the value of our company to repair and collision shops,” said Lagges. “Current customers will also benefit from the vast amount of information and links we’ve designed into the site.”
Lagges said the new site features videos, FAQs, an interactive demonstration vehicle and testimonials from current customers. Also included are company press releases and Tech Corner — intended primarily for working automotive technicians — it includes vehicle-specific tech tips. Lagges said additional interactivity is planned for the site, including a customer forum and chat capabilities.
For now, buying technical service and repair information most often comes from an information provider like those previously mentioned. According to our research, 86% subscribe to a technical repair and/or management information provider with 77% having online access to the information.
More shops are accessing repair information straight from OE websites, however that number is growing at a slow pace. According to respondents, 22% subscribe to an OEM website for technical information (up from 18% in 2005). We found, on average, these shops spend about $153 per month for information access.
As far as a resource for chat forums or supplying repair questions and answers on sites, such as www.iATN.net, 29% said the use the Internet for that purpose, up from 27% in 2005 and 24% in 2003.
Making the Buy: Tools
Looking at our data, we’ve found that 52% of repair shop owners who log on to the web from their shop use the Internet to research tools and equipment. That number has remained pretty consistent with previous survey responses in 2005 (48%) and 2003 (51%). However, when it comes to purchasing tools and equipment, only 36% buy over the Internet, compared with 41% in 2005 and only 21% in 2003. While our research shows half of the Internet users do their own research online, it seems like they want a sales person and the accompanying personal attention when the purchase is made.
On average, 15% of total tool and equipment purchases are made online — the median was 10%.
Making the Buy: Parts
We found that while only 40% of the Internet-equipped shops researched parts suppliers and manufacturers online in our 2005 survey, this year’s data shows that number has grown to 48%. The number of respondents who buy parts online also has increased. Our data shows that 67% of the shops that use the Internet said they actively buy online, which is up from 31% in 2003. Just over half of the respondents (52%) said they order via the Internet from their main supplier.
On average, 34% of total parts purchases are made online — the median was 25%. As Internet parts buying increases, some parts suppliers are looking to delve into this unique marketplace. In his “Executive Interview,” Steve Frazier, vice president, Automotive at Amazon.com, spoke with aftermarketNews.com earlier this year to discuss Amazon.com’s launching of its Automotive Parts & Accessories store, offering more than 1 million new, used and remanufactured parts from leading parts and accessories manufacturers.
“If you look at the AAIA numbers, it’s a $40 billion market for DIYers and another $50 billion for DIFM. That’s a big market,” Frazier said, and one that the Internet-based seller wanted to gain access.
Frazier said the aftermarket has been a little slow on the uptake of adoption of online shopping, but the company feels that the auto parts category will definitely “move” online.
“The automotive category is also one of those product categories that has a rich tradition of selling parts in different condition types,” he said. “At Amazon, our first business was selling new product, but several years ago we moved into selling used products. In our electronics, tools and kitchen businesses for example, we sell remanufactured and refurbished products and we’ve done so for a long time. We looked at automotive and said here’s a category where consumers do buy new aftermarket parts and reman aftermarket parts.
“There is a very rich market out there for vintage parts, for remanufactured parts and for salvage parts. And, again it’s something we didn’t have to build for our automotive store. It was something the company was building anyway. The biggest challenge was developing the Part Finder,” Frazier said.
Frazier said although their most popular categories reflect those of the consumer market — truck accessories, appearance items, non-fit related parts, diagnostic scanners, floor mats, seat covers, car covers, etc., as the business developed, Amazon.com is getting much closer to somewhat of a standard mix replacement parts, performance parts and performance accessories.
To view Amazon.com’s Automotive Parts and Accessories store, visit www.amazon.com/automotive-auto-truck-replacements-parts.
To read all of Frazier’s “Executive Interview,” visit www.aftermarketNews.com.
The 2007 Internet Study survey was conducted in March. Surveys were sent to 3,000 randomly selected business owners from Brake & Front End, ImportCar and Underhood Service magazines (1,000 per magazine). Questionnaires were mailed by first-class postage, and the respondent was provided with a postage-paid return envelope. 283 completed questionnaires were returned. No second mailing was necessary.
For more information on this study, contact Bob Roberts at 330-670-1234 ext. 252 or e-mail him at [email protected]