Opinion: The incoming B2B tech explosion

When it comes to e-commerce, the consumer always grabs the spotlight. Amazon, Walmart and everyone in between are spending billions of dollars every year to win over the individual buyer — people like you and me.

The aftermarket equivalent of the mainstream consumer would be the DIYer. Ever since the first auto parts e-commerce growth spurt during the Great Recession, big North American auto retailers and distributors — NAPA, AutoZone, Advance Auto Parts — have pumped money into their business-to-consumer (B2C) sites and technology to woo the garage tinkerer.

But a strategic shift has been brewing of late.

Aftermarket stakeholders are increasingly aiming their technology budgets at the business-to-business (B2B) set — jobbers, counterpeople, fleet managers and technicians. That is where they see the best revenue results and biggest growth potential.

In a recent investor call, Advance Auto Parts CEO Tom Greco noted that “improvements made in our MyAdvance digital platform led to the highest online B2B penetration rate ever.”

Similarly, AutoZone made tremendous — high double-digit — gains in commercial revenue in 2021 and is pouring in top dollars to improve both the DIY and professional purchase experience.

The trend is consistent with observations from other sectors. A recent study jointly published by the pymnts.com web platform and American Express reported that more than half of U.S. companies now buy through self-serve B2B websites. The pandemic fast-tracked the trend, compelling more and more businesses to embrace digital.

The result? In 2020, B2B e-commerce increased 200 per cent faster than B2C sales, according to the report.

Some of this growth is organic, even in part sales. As professionals get more connected in their personal lives, they bring over some of their habits to their workplace. Numerous surveys have already shown that jobbers and technicians have been steadily ditching the phone, which was the de facto parts ordering process even a few years ago.

Changing demographics are also accelerating the trend. Digital native Millennials and Gen Yers at a part store are far more likely to use digital tools to conduct business than their Gen X or Boomer counterparts.

But a huge part of B2B wins will be earned. Auto repair and service shops and part stores are busy places. As in other industries, B2B technology spending in the aftermarket will target professional pain points, with the goal of adding convenience and increasing productivity.

Here are the four key areas for B2B technology development aimed at jobbers and technicians:

Customer Journey

B2B websites? Amazon they are not. By and large, they are clunky, slow and emphatically unattractive. Aftermarket platforms are no exception. They get the job done, and there have been significant improvements over the years. But using them efficiently still requires a pretty steep learning curve.

Going forward, these platforms will aim to get closer to an Amazon-like experience — making it easy and frictionless enough for the first-day-on-the-job counterperson. That could mean improvements such as interactive content, smart product recommendations, personalization and mobile buying.

Now, large franchises and fleets are rapidly transitioning to a more data-driven approach. But smaller organizations continue to conduct their business the old school way. The status quo can be attributed to inertia. But often the local jobber is too cash-or resource-strapped to invest in data and analytics.

Advanced Analytics

The aftermarket — particularly the lower half of the value chain — has largely run on “gut” strategy for decades. Now, large franchises and fleets are rapidly transitioning to a more data-driven approach. But smaller organizations continue to conduct their business the old school way. The status quo can be attributed to inertia. But often the local jobber is too cash-or resource-strapped to invest in data and analytics.

Future B2B platforms will try to fill this gap. They will provide more insights to customers through free or low-cost subscription-based integrated dashboards: How much they are buying, how far they are from their next incentive level, how well they are addressing they are local demand? For fleet buyers, such information would revolve around their assets. For instance, U.S. chain Discount Tire recently launched a connected vehicle platform for their fleet customers that will provide them insights into various operational metrics of their assets.

Business Management

Each aftermarket service and parts location is a micro-office with its own operational dynamics. Store personnel spend a lot of time managing financial documents, invoices and marketing materials. These activities take away time from the real business of selling parts, or in the case of fleets, the effective deployment and use of vehicles.

Of late, there has been tremendous growth in software (e.g., Epicor Eagle, Autoleap) that specifically aim to digitize business process and documentation at the aftermarket store or shop level. In the future, we will see closer integration of this software with the parts ordering interfaces of national parts distributors and retailers, making these solutions more impactful and user-friendly for the aftermarket professional.

Dynamic Pricing

From airline tickets to Amazon trinkets, most online retail purchases these days are subject to demand and market-based inputs. Prices are constantly optimized based on customer interest, competitive environment, availability and a host of other factors. That TV you are eyeing can often swing by $100 within a few hours.

B2B platforms will not adopt that level of volatility but aftermarket distributors and retailers will react to market conditions more frequently — and dynamically — in the future through increased automation of price inputs in their ordering systems. Buyers will also see more effective integration of incentives and rebates into the digital process.

Kumar Saha is the Toronto-based managing director of the Canadian operations of global aftermarket intelligence firm Eucon. He has been advising North American automotive industry for over a decade and is a frequent conference speaker and media commentator.