Aftermarket in general and Automotive Aftermarket, in particular, is very challenging. With technologies advancing and vehicles getting connected, the amount of data is growing. If we add up the data related to all types of vehicles and change of ownership & other vehicle information, it is evident that this sector contains an enormous amount of information. A typical service network indeed has to deal with 20 times more SKUs than manufacturing functions. In an industry where accurate data is often business-critical, getting an overview and managing all of this information can be a real challenge.
Also, the entire market is completely unpredictable and inconsistent, because demands are likely to crop up unexpectedly and sporadically. Not to forget that the companies have to deal with returned parts which include write off parts. Parts are written off due to damage either at source or workshop/Garages. We know the European aftermarket primarily has two channels, the authorized and the independent. The authorized channel is composed of vehicle manufacturers (VMs), dealer networks, and repair shops. And the independent channel largely consists of independent service providers working for multiple brands.
Now, if we were to look at the kind of end customers who eventually enable growth within the market, it involves:
- Customers who are loyal and always rely on you for their aftermarket needs.
- Customers for whom you are a second preference, meaning they come to you only when they fail to acquire required parts elsewhere.
As an independent channel player or OEM, it is crucial to achieving long-term growth. At the same time, it is extremely important to address the challenges that arise with new regulations and changing trends. These are some key issues which if left unattended, are likely to cause an unnecessary increase in the cost and resources.
Precise Vehicle Identification (VINVIS)
VINVIS as one of the toughest aftermarket challenges. Identifying the exact vehicle is crucial to identify the exact part. This remains difficult for service providers without the intervention of a technology platform. Also, it is important to keep up with the customers’ demands while keeping the rate of return as low as possible. This is also identified by the authors of an HBR article titled “Winning in the Aftermarket”. It goes on to say that the market currently is inconsistent and highly unpredictable, and it’s better not to hoard a huge inventory, and rather use the “Just in Time” principle.
Embrace Technology Innovation
It is important to make sure that you have the right parts when customers need them. To achieve this, your company will need to leverage the technology which can tell you the exact part that you need to fulfill customer demand and reduce the rate of return. Customers turn to online communities and reviews, among other digital platforms, as a way to improve their purchasing decisions. Multiple platforms for online parts sales exist already. Digital transformation will allow aftermarket players to further increase the automotive aftermarket’s value as connectivity helps them move closer to the end customer and generate big data.
Rate of Returns
The biggest pain area for any automotive business in Europe is Accurate Vehicle Identification – the lack of which leads to as low as 33% parts accuracy – meaning high costs on parts returns & replacements which can also lead to high repair costs, wasted capital on multiple parts, and inaccurate inspection data.
AutoDAP is a Data Accuracy Platform that helps to identify the exact vehicle information based on which parts accuracy is achieved. This digital platform helps identify the right vehicle and parts and know about the exact customer requirement. It will not only free aftermarket service providers of unnecessary hassles and reduce the rate of returns, but also delight customers with extraordinary service. Book a Demo today!