Time to ‘Categorically’ Expand both Parts and Services
8 ‘Expansive’ Product Ideas That Can Increase Differentiation
By Bill Wade
Recent developments in the heavy duty truck parts and service landscape have reaffirmed my contention that being first with new technology coverage is one of the best differentiators a distributor can have.
This differentiation in turn is a powerful insurance against the shrinking margins that always accompany a product’s commodization.
A number of distributors have recently asked what ‘new’ parts and service could they add to protect their margin and attract new customers. After discussing some of our traditional favorite high margin lines (hydraulics, push/pull cable makeup, u-bolt bending, tanker parts), we decided to outline some new territory that really has not been explored nor developed.
Here are some growing areas for parts and service leadership that have not been ‘picked over’:
Natural Gas Trucks (CNG, LNG) Power Solutions. Truck sizes from a Ford 150 to an AutoCar are increasingly turning to natural gas (NG) based fueling solutions. Shell just announced a supply deal with T/A. Why not, with new fracturing techniques, it has become obvious that this is an economical alternative to diesel (especially for domiciled fleets).
Dual-Fuel technology from Cummins Westport runs engines on natural gas with diesel pilot ignition. Under normal operating conditions diesel can be as low as 10% of total fuel energy, giving a diesel replacement factor (DRF) of up to 90%.
New parts and service opportunities arise from the difficulty of servicing these ‘gas bombs’ in a traditional shop setup to sourcing vacuum sealed, cryogenic LNG storage tanks.
Security Solutions. It is hard to believe that any truck operator feels comfortable going to the local ‘window tint and alarm’ shop or locksmith to access the broad range of vehicle and cargo security products now available.
Selling and installing commercial service van locks, high security padlocks, GPS tracking systems and accessories, data exchange service devices, Garmin FMI, video event data recorders and data collection terminals can put a distributor or shop in a whole new relationship with nearly every customer.
Owner Operator Accessories. I was surprised to see DAS (a leading truck stop expeditor) at a recent distributor group show offering mobile electronic accessories, CB radios and accessories, as well as a portfolio of general travel merchandise. Why not expand retail space to include items designed to enhance the convenience, safety and comfort of your customers’ work environments.
Hybrids. The value proposition for hybrid trucks (plug-in hybrid and battery electric medium and heavy trucks) is strong, and Pike Research forecasts that sales will surpass 100,000 vehicles annually by 2017.
Different drivetrains and battery technologies will be key drivers of market growth, as will global government regulations regarding diesel emissions… and don’t forget government vehicle purchase incentives.
Underhood Exhaust. Since the advent of the 2007 Diesel Emissions requirements, exhaust temperatures have dramatically increased on commercial trucks equipped with diesel particulate filter (DPF) units. Truck makers were forced to take measures to combat these extreme exhaust temperatures through the exhaust systems.
Underhood exhaust should be treated as a whole new product category. Many OE designs called for stainless pipes, as well as pipes coated with a ceramic barrier inside and out. Add in DEF fluids and parts. These are not just chrome 8 inch stacks anymore.
Aerodynamics. A rapidly increasing bunch of fleets like Fedex, WalMart, Con-way, Frito-Lay and Swift are realizing fuel economy increases of 10% or more through aerodynamics, and new tractor designs like the Pete 579 reduce vehicle drag by up to 25%.
Aerodynamics for trailers on the other hand have been largely ignored until recently and represent the greatest area for potential improvements left on the tractor trailer combination. All kinds of side and under trailer fairings and ‘boat tails’ offer a great profit opportunity.
Telematics Technologies. Telematics has turned to be a reality tool for fleet operators to stay legal and remain profitable. A broad range of products and services at various price points offer fleet operators numerous options.
Safety is likely to be the key telematics business driver. Some other offerings include scalable fleet management system (FMS) platforms. Heavy truck-specific navigation, remote diagnostics, ‘prognostics’ and electronic on-board recorders are the fastest growing product technologies.
Light Truck Accessories. Many smart distributors noticed that their parking lots were full of customer pickups. They added parts (spark plugs, brakes, filters) which were simply extensions of product lines that they were already purchasing.
They have found real profit opportunity in bull bars, floor mats, grille guards, headache racks, ladder racks, loading ramps and side bed boxes / storage drawers.
Don’t be surprised if sales guys or local reps haven’t been beating down your doors to add these categories. These are the leading (hopefully not bleeding) edge of new product-based distributor differentiation… so these are not for the followers.