Jamie Irvine: You know, over the past couple years, I’ve talked repeatedly about the importance of manufacturers and heavy-duty parts distributors to get a digital sales channel set up. And you and I have talked about that before, but when you start to go down that road, one of the first things you run into is the need for good quality data. And there’s a real driver right now that’s causing the amount of data we have to handle to grow exponentially. So what’s going on, kind of bring us up to date.
Kris Harrington: I think there’s a few things that are going on that we could talk about here for sure. The first is that the way that people buy has changed if we think about search engines, right? You think about Google, you think about the way people are using marketplaces like Amazon to start a search. So just the way that people are searching and then going to find the product that they have, that’s creating a demand for data and good product data. The way that manufacturers and resellers are selling has changed as well. So again, if we think about all of the digital channels that are now available online, there are a lot more data elements that are out there just to capture those search results. So buyers are buying differently, sellers are selling differently, but then there are a number of technologies that are available to date as well, that are creating really data points. So if I think about ERPs, CAD systems, your solid works, technical publications data, website data, you’ve got your eCommerce data, you’ve got CRM data, you’ve got equipment telematics, all of these technologies that have been out there have also been creating new data. And that’s the way that people think about data today. So I think when you start thinking about all three of those things that’s creating this demand for data as we look at the marketplace.
Jamie Irvine: Right and I’m thinking about the evolution of the internet as well. Like when you think back to the nineties and, and version one of the internet, it was very text-oriented and, and it was disorganized. And then we moved into version two, web 2.0, and that’s when companies like Google organized the internet for us and made it easy to search. And then that we’ve had the rise of social media companies. And we’ve had the rise of the marketplaces like Amazon. So all of this has been part of this evolution and we’re on the cusp right now of a transition into what they’re calling web 3.0, and now we’re hearing about words like metaverse and augmented reality and virtual reality. So when I just look at that progression, you think back to the early days, when all you needed was a blog and you could rank, and now you need written content, you need high-quality visuals. You need, you need audio need video. And, and then we’re gonna layer on top of that very quickly, augmented and virtual reality. This is what’s causing the explosion of data requirements on companies that want to sell.
Kris Harrington: That’s right. They need to have all of that information at their arsenal to meet that new buyer’s requirement. For sure.
Jamie Irvine: Let’s look at it from the perspective of a parts reseller. They’re buying from manufacturers. They’re often in the heavy-duty parts industry, especially with trucks and trailers and with agriculture and construction equipment, they’re in a B2B relationship with most of their customers because their customers are repair shops and fleets who have their own shops, things like that. But then they also have these retail stores and they have walk-in and you have people phoning and you have people going online and buying from your eCommerce site. So you’re really trying to walk on both sides of the line of being B2B as well as B2C. So what important data is necessary for a parts reseller?
Kris Harrington: Yeah, let’s go through the list because there’s a lot of part data that’s necessary to be successful, but we’ll try to stick to the high-level one. So obviously you need the manufacturer part number, right? You need to know the manufacturer brand if you think about like, an SAF Holland or a Jost fifth wheel, right? So you might be offering two kinds as a reseller or maybe even more so you need to know that manufacturer brand that goes with that part number. You need to know a product description. you have to have a good image or multiple images. You need to have product specifications, you’ve gotta have categories or part type, like is it engine, is it part of the alternator? Is it lighting? You know, so those classifications are really important. You need to know where it’s used, think about where that product fits, the make, the model, the year.
So that’s product information, you’ve gotta have price. You’ve gotta have product availability in lead time. You need weights and dimensions. You need your install instructions or even removal instructions, and then warranty information is another piece of product data that, if we’re really putting a full picture together, that’s critical as well. Now, back in my aftermarket days, and if I were going digital when I actually was responsible for selling aftermarket components, I would like to know the expected life of the components. And I’d also like to know what’s the installed base so that I know the frequency of which that type of product should be turning and how many I need to have on the shelf. So that gets into a little bit more of the analytics data, but those are data elements that I wouldn’t want to eliminate in a discussion about data as well.
Jamie Irvine: The is like the barrier to entry with setting up a digital sales channel. So people might be feeling a little over overwhelmed when they go to tackle this project, what’s one of the first barriers they run into?
Kris Harrington: You just nailed it on the head, right? It’s complex, especially for resellers who are selling across multiple brands. You could be talking about hundreds of thousands of SKUs. So the barriers really initially are just that complexity in recognizing that you have all of this stuff, it can start to seem very overwhelming. The other barrier is that there aren’t really any standards to there. When we think about, you know, heavy-duty parts in the trucking industry, not in the same way that there are ACEs and pies in the automotive industry. I know companies are working toward that but because there are no standards, what resellers get from manufacturers might be limited or might be a lot. And that’s something we can talk about as well.
Jamie Irvine: Right? So, I mean, you would think the manufacturers have all this information, but in the heavy-duty truck world, we’re dealing with OEM, we’re dealing with tier 1, which has OEM and aftermarket. Then we’re dealing with tier 2 that is just aftermarket. Oftentimes there’s a lot of different suppliers and why might the manufacturer not be able to provide all of the data necessary?
Kris Harrington: The reality is for many manufacturers, they have the data somewhere, but often it’s still in siloed places. And it hasn’t been set up in a way to efficiently share it and that’s just because there hasn’t been in the past a sense of urgency or a need for it. So the manufacturers had the data, but they just didn’t recognize the need for it. You know, another challenge that resellers have with manufacturers, a lot of manufacturers still wanna control that data. There are manufacturers that are still trying to figure out, do they want to go direct to market and control their branding or do they want to leverage their reseller network and make all that information available to their resellers to broadly distribute and get business, however they can. And that’s a decision that I think many manufacturers are still under and it’s up to resellers to push those manufacturers as well, to make sure that it’s clear if we’re all gonna win in the future, then what data is needed in order to be successful and meet customers wherever they might be searching for product.
Jamie Irvine: Yeah. And I’ve definitely in my consulting work with manufacturers, the whole subject of channel conflict between distributors and going direct, I mean, this is an ongoing, real challenge for manufacturers because as they’re trying to make sure that they ensure their future survival and put themselves in the best position to succeed, but at the same time, they’re not looking to destroy all of the decades of work that has gone into building up their distribution network. So it’s a real challenge. We’re gonna talk about how all of this relates to the user and the buying journey for them when we come back from our break. Don’t have a heavy-duty part number and need to look up a part? Go to parts.diesellaptops.com or download the app on Apple or Android to create your free account. Looking for high-quality fuel injection for heavy-duty applications. Having one supplier for fuel injection allows you to better serve customers by providing them with a complete line, which increases your sales and profitability. Learn more at ambacinternational.com/aftermarket.
We’re back from our break. And before the break, we were talking to Kris from GenAlpha about what is causing this exponential growth in data requirements for both manufacturers and heavy-duty parts distributors. Kris, what mistakes do you see people making commonly, and how do we avoid them when we’re setting up that customer buying journey? You know, we think about our goal, we want to take someone who’s just becoming aware of us for the first time, give them the information they need to decide to do business with us, and then become a repeat customer. That’s the buying journey, but what mistakes are you seeing some people make when they’re trying to set that up with a digital sales channel?
Kris Harrington: Yeah so I’ll start at the very beginning and say that aftermarket customers are gravitating more toward online research and purchasing each day. So the biggest mistake that we still see is that manufacturers and resellers are relying on the old ways of doing business. Email, phone and in-person and pick up, they’re relying on a website with a static image, phone number, and address, and that’s just not gonna work for buyers anymore. So we’ve got to shift away from that. We don’t see enough effort spent on good product data. So we just talked about product data. I always say that we need at least account for the 20% of our parts that are making up 80% of the revenue. We have to start there. I know that some resellers can be dealing with hundreds of thousands of SKUs, right? So we have customers who have over a million SKUs, your product data. Isn’t going to be perfect for a million SKUs when you get started, but you have your high turning inventory.
Jamie Irvine: I’m just doing the math, Kris. I mean 20%, that’s still 200,000 part numbers.
Kris Harrington: That’s right. Well, again, remember it’s the 20% that makes up 80% of your revenue. So it could be potentially something less than that, but you have to make sure for those products that you’ve got good product descriptions, that you’ve got your pricing in line, that you’ve got specifications, a high-quality product image. Don’t forget those things on those parts and then continue to build out. This is an iterative process. This is the new sales channel. So you keep making that better. Another mistake we see is that companies launch without price and availability. So there’s no way for customers to create a quote or to check out. So they make the customer take a step offline if they really want to buy, and this can force your users to look elsewhere.
So I encourage the companies that we work with, don’t just launch an informational site, launch a site where they can see price and availability and be able to take that order. We also see that some companies will launch without allowing guest users to pay with a credit card. So we’ve found that companies will set up a website, they’ll allow customers to log in and pay on account, which is great. That’s a great customer experience for an existing customer, but if you’ve found a way to attract customers to your site because they’re searching something on Google and now they’re making their way to your site, make sure you allow guest user access and make sure that they can place an order with a credit card. Let’s not turn those customers away. And then the last thing that I’ll mention here and mistakes that we see often is that there’s a lot of disjointed systems. I talked about all these systems that are now becoming available. So for those loyal customers that are doing business with resellers, make sure that they don’t have to log in one place to get vehicle information and then log in one place to get parts information. And then if they have a warranty claim, they log in someplace else. And if they’re gonna configure a product, now it’s a whole different system. It’s all these logins and places to go for them to remember if you can create one space or one single sign-on to allow them to do all of the things that they’re gonna do, as it relates to doing business with you, that creates that better buying experience.
Jamie Irvine: That makes a lot of sense. I was thinking about how, when I set up my Amazon account several years ago, I have not yet had to change anything with the exception of when my credit card expired having to update that piece of information. So it’s like I set up my account and I could just buy. That’s a good customer experience. You got it. And, and one of the things I want to talk a little bit about is how important that search component is. See, like, what’s the purpose of all this data it’s so that when people are on our site, they can easily find what they’re looking for. And when I look at some of the statistics about how much of the search traffic on the internet has been taken away from Google by Amazon, Google still is the dominant tech search platform. And YouTube is a close second for search but when it comes to commodities and products, Amazon has taken a massive bite out of Google search traffic because people just go to Amazon and search the product, whether they buy from Amazon or not. If that doesn’t emphasize how important search is, I don’t know what would.
Kris Harrington: That’s right. I think I’ve heard 70% of searches start on Amazon. I mean that is phenomenal. It’s a huge change in the way business is done.
Jamie Irvine: So what’s the economic impact if a parts reseller just decides to put their head in the sand and say, Hey, this is too complicated, we can’t do it. What could be the end result?
Kris Harrington: I say this with a heavy heart, because I love this industry and I love the parts business, but sadly, it’s a slow death, right? It happened in retail to big names like Sears, JC Penney, Borders. The same path is happening. Resellers will continue to lose market share to brands with an online presence. We just talked about Amazon, think about McMaster Car, Grainger. They are expanding their product catalog every day and each year growing business online, more and more marketplaces are opening each year. The digital buyer has entered the workplace and is taking over important purchasing roles across all industries. And as more and more baby boomers are turning to retirement, and, you know, those were really the employees that really appreciated the long-standing relationships and doing business in person. They were typically the people that you knew by name, and they knew your parts counter person by name. They are exiting. They’re exiting faster now, as we see people exit the workplace over the last several months. So I strongly believe there’s a transformation taking place in our industry and larger resellers will potentially buy up smaller ones. You know, they’ll turn those locations into distribution centers and sell their goods online. So all resellers need to find a way to differentiate themselves and do business in this digital age.
Jamie Irvine: You’ve been listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine. And we’ve been speaking with Kris Harrington, the President, and COO of GenAlpha. To learn more about GenAlpha, go to genalpha.com. Kris, thanks so much for being on the podcast. I really appreciate it.
Kris Harrington: You bet, Jamie. It was great to be here.