Consumers Perceive Them as Convenient Shopping Outlets; Retailers Perceive Them as Major Competitors
In the eighth in a series of articles that review various types of retail chains that sell automative parts and accessories, the mail-order operation is studied. Aftermarket Business takes a look at this major competitor to the automative retail chain. What advantages these businesses have over the retail chain, the type of products that attract consumers to mail order and how the retail chain can compete effectively with these businesses will be discussed.
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Retail chains have enough competition in their own specific marketing area without needing to worry about mail-order operations. However, in a poll conducted by the Specialty Equipment Market Association (SEMA), retailers considered mail-order businesses their strongest competitor.
The 1991 SEMA Market Study defines mail-order operations as retail businesses that sell specialty-equipment products but do not operate retail locations. These operations reach consumers through a variety of advertising means and ship orders directly to customers.
Why are mail-order businesses such a strong contender for the consumer's automotive parts and accessories dollars? According to Jon Hedges of Summit Racing Equipment, Akron, OH, consumers of the '90s are demanding in their shopping habits. In a presentation earlier this year at the SEMA Management Conference in Scottsdale, AZ., Hedges commented that retail sources will have to offer quality, price, service and convenience to satisfy today's consumers, all qualities that mail-order, businesses possess, Hedges contends.
That statement confirms what Hot Rod magazine found during one of its surveys. Consumers were queried about the attractive features of mail order. Pricing was noted as the most attractive feature by 70.4 percent; product selection, 49 percent; convenience, 40.5 percent; and size availability, 15.8 percent.
Aftermarket Business found that specialty equipment seems to be the predominant fare among these catalogs when it reviewed the mail-order outlets that are currently in operation: Summit Racing Equipment, Akron, OH; Jeg's High Performance, Columbus, OH; Speedway Motors, Lincoln, NE; and Danchuck Manufacturing Inc., Santa Ana, CA..
One exception to that rule is J.C. Whitney & Co., which produces catalogs by the authority of Warshawsky & Co., Chicago. The catalog operator, established in 1915, is the pioneer of the mail-order aftermarket and serves as a full-service catalog firm, distributing a variety of aftermarket products from bumper guards for a 1965 Dodge Pickup to performance computer chips for a 1992 Chevrolet Camaro.
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In the 1991 SEMA Market Study, 56.1 percent of specialty-equipment consumers purchasing from mail-order business ranked price as the most important factor influencing where they buy. This had greater importance than the average significance of price--33.5 percent--to consumers in outlet selection, according to SEMA. Product availability ranked second in the association's survey, 18.4 percent, with less than average strength of this factor at 25.8 percent in outlet selection. Product selection, 14.4 percent, is the third most important factor including consumers who purchase from mail-order businesses. This figure compares to an average importance of product selection, 13.4 percent, determining where consumers purchase specialty-equipment products. Convenience, at 8.6 percent, and product knowledge, 2.5 percent; rank fourth and fifth as factors influencing consumers who purchase at mail-order businesses. Each of these factors has below average strength among consumers purchasing at mail-order businesses compared to the importance of these factors in the overall process of outlet selection.
Bill Smith of Speedway Motors, whose firm has been in the business for 40 years, agrees that mail order provides more choice of product availability and allows businesses to niche market specific products for specific applications; i.e. auto racing equipment, custom car parts and accessories, etc.
Smith notes that his firm provides a 98.6% order fill rate, something that the competitors, be it retail outlets or other mail-order businesses, cannot do.
"Our quick-order entry systems turn an order over in five hours," Smith comments.
Quick response seems to be a forte of mail-order businesses as is confirmed with Danchuck Manufacturing. The firm, a producer of reproduction parts for the Chevrolet enthusiast, has found its niche in the mail-order market. The company publishes three catalogs annually, and notes that it normally ships an order within 24 hours.
Car Craft magazine polled consumers on the outlets where replacement parts were purchased. The results: 74.5 percent, auto stores; 50.8 percent, auto dealers; 37.1, percent speed shops; 35.4 percent, performance shops; 30.1 percent chain/discount stores; and 30 percent, mail-order businesses.
Aftermarket Business also asked consumers what types of products they would consider purchasing through mail order. Auto parts, engine accessories, interior components and tools and equipment rated high on the list. Other automotive items found on the consumers' mail order shopping list were tires, wheels, transmission parts, best car speakers for bass, best car speakers under 100, radar detectors and anti-theft devices.
The 1991 SEMA Market Study studied sales share by retail outlet for various product categories and found the following: Car cover sales were highest at mail-order operations with 25.4 percent; body components/accessories had their second highest shopping share at mail-order operations with 21.1 percent; carburetion/fuel system products, 31.9 percent; chassis and brake products, 22.3 percent.
Mail-order operations capture the largest share of bumper sales with 32 percent, second in louver sales with 30.5 percent and first with push bars/grille guards at 26.9 percent, according to the SEMA Market Study.
Mail-order businesses account for 22 percent, which is the second-largest share of consumer purchases of drive train products, and the second largest share of electrical products with 24.4 percent.
These suppliers of auto parts and accessories not only make it easier for consumers to purchase specialty-equipment products when local availability is not convenient, but mail-order businesses also provide the consumer with a wider selection than the typical retailer who is faced with minimal inventory and display space.
