digitizing the global automotive parts and service industry
TRANSCRIPT
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Top Transformational Shifts to Shape Future of RetailingCustomers will expect retailers to adopt the latest technologies to enhance convenience and the overall service experience.
Future StoresExpress Service Stores,
Mobile
Omnichannel Retailing‘Bricks and Clicks’ Models
New Business ModelsSocial Commerce
Connected RetailingGamification, LBS, in-
vehicle
Last Mile RetailingClick ‘n’ collect; one-hour
delivery
Engaging RetailingEra of customized
targeting, Peer reviews
Big Data RetailingFrom selling products to
selling information
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Transformational Shift #1– Future StoresSmall format stores in urban locations will help aftermarket participants reach new customers and explore adjacent products.
� Automotive OEMs (eg. Audi, BMW) taking lead in “futurizing” stores, with about 100 digital stores expected to be
opened by 2020. Parts retailers and service shops should focus on express formats that facilitate on-the-fly customers, instant mobile appointments, as well as facilitate cross-shopping (common household items, toys, accessories) and more attractive non-repair formats that attract more women (eg. Pep Boys in U.S.)
Small
Express formats
Ephemeral
Shorter leases / stores within stores
Urban
Centrally located in cities
Big Box Small Box
Retailer store size to be 15% to 20% less than the current average store size by 2020.
Lease and rent discounts of up to 40% expected by 2020
as retailers seek to make stores temporary and rotate
quickly through different spaces.
Future stores will be accessible to all within
walkable distance—2 to 3 miles from city centers and
urban hubs.
Future Store Format (2011-2020)
AMImpact
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Transformational Shift #2 – Omnichannel RetailingBoth the purchase and delivery of service and parts will become increasingly omnichannel in the future.
Department Stores
Supermarkets Hypermarkets Online Mobile Payments Mobile Apps
Bricks (pre-2000) Advent of Clicks (post-2000)
Interactive Stores(Motion sensor displays)
Virtual Stores(Ambient mobile retail)
Virtual Hyper-markets(Amazon)
The Future—Bricks and Clicks (2015 and Beyond)
� Parts purchasing and service fulfilment will likely become more hybrid in the future. Customers will purchase
parts through multiple platforms – both service provider owned (traditional store, pop-up store, mobile store) and
third-party owned (eg. Amazon, eBay). Depending on the nature of repair work, the service could be provided
remotely (i.e. software update) or physically (at service shop, through mobile truck etc.)
AMImpact
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Transformational Shift #3 – Connected RetailingThe ability to always to “reach” customers will create comprehensive feedback and brand management loops currently lacking in the aftermarket
Near-field Communication Augmented Reality
Scanners / Sensors (RFID)
Motion Sensing
Gamification
QR Coding
� Technology is converting buyers, including into multi-channel shoppers, partially shifting the point-of-sale to
online channels. Purchasing service on-the-go, remote participatory service, customer loyalty through app gamification, and augmented-reality repair media will become more common.
AMImpact
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Transformational Shift #4 – New Business Models of RetailingNew types of retail businesses will emerge to provide services to consumers using the data they are generating online.
� Advent of new retail formats. E.g.: Facebook stores, mobile apps for aftermarket services
� Development of new approaches to customer loyalty. E.g.: through the influence of social media, loyalty
reward programs for car servicing will be awarded to users based on ‘recommendations on Facebook’ rather
than number of physical visits
� Convergence of mobile connectivity and telematics will enable in-vehicle purchases, LBS promotions
Degree of ‘Bricks’
De
gre
e o
f ‘C
lic
ks
’
0 1 2 3 4 5 6 7 8 9 10
1
2
3
4
5
6
7
8
9
10
Low
High
Low High
Online Hyper-Markets
Virtual StoresPop-up stores
Social Commerce
Click ‘n’ Collect
Subscription Commerce
Mobile Commerce
Crowdbuying
This image cannot currently be displayed.
This image cannot currently be displayed.
f
Note: The retailing formats have been plotted
based on the degree of bricks and clicks involved
in making the sale. We have used both
quantitative and qualitative reasoning to measure
the degree of impact.
In-Vehicle Purchase;
LBS
AMImpact
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Transformational Shift #5 – Engaging RetailingEngaging customers in the retail process helps in optimized delivery of solutions for varied set of aftermarket customers
Geospatial marketing
Ubiquitous search
Price Transparency
New Channels
Peer-to-peer reviews
Targeted advertising
Long-tail offerings
RaisedAwareness
In-store digital staff
Loyalty programs
Recognition of a need
Information Search
Evaluation of Alternatives
Purchase Post-purchase evaluation
1 2 3 4 5
Technology at each stage of the purchasing cycle keeps the customer engaged with relevant
information, evaluation, assistance and reviews on the product
Ways of engaging consumer with technology
� Information, interaction, and analytics will be used to engage the customer at all stages of the purchasing cycle
E.g.: dealers under the same brand will recognise (returning) customers, with ‘product geniuses’ tailoring their
assistance to personal requirements and previous shopping patterns.
AMImpact
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Transformational Shift #6 – Last-Mile LogisticsFulfilment and delivery (how and when) of parts/service will emerge as a key competitive differentiator.
Central distribution center to customer(packing and last mile delivery outsourced)
Regional distribution center to Shop (In-house)
Bricks (pre-2000) Advent of Clicks (post-2000)
Bricks and Clicks (2012 and Beyond)Special Delivery Options
E.g. Wal-Mart U.S. E.g. Amazon U.S.
Same-Day Night Time Robotic Warehouses Stores as DCs Collection Points
Each distribution
center supports 90
to 100 stores in a
200-mile radius.
Closest central
distribution center
identifies and sorts
product which then
packed and
delivered by UPS
� Advent of ‘Click and Collect’ aftermarket services: development of complete online services for the aftermarket
– customers book a service online with technician inspecting the vehicle at a drop-off point or at home; spare
parts online order with video tutorials or fitting by third party workshops.
AMImpact
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Transformational Shift #7 – Big Data RetailingPredictive analytics enabled by data will work in tandem with telematics offerings (e.g. prognostics, smart alerts, in-vehicle sales)
2012 2020
1.2 Zettabyte
101.2 Zettabyte+40% /
Year
Big Data is growing at
40% annually
Big Data in Retail, Global, 2012 and 2020
Big Data, Types of Services, 2014
Price Differential Vouchers
Mass Customization
On-demand marketing
Geo-fencing customers
Store Inventory Tracking
Engaged employees
Big Data Services in Retail
Supply chain optimization
Custom merchandising
Prioritizing high-value customers
� Analytical tools to collect and segment customer data and to create inter-linkages between information sources. A
combination of big data and location-based capabilities will revolutionize the aftermarket with personalized offers
on services, such as insurance, maintenance, spare parts, entertainment, fuel. Aftersales services will become
more pro-active than re-active through predictive selling based on location, destination, type of vehicle, etc.
AMImpact
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For Additional Information
Kayla Belcher
Corporate Communications
210.247.2450
Stephen Spivey
Program Manager
Automotive & Transportation
210.247.3845
Brian Drake
Vice President
Automotive & Transportation
248.836.8260