As a retired automotive competitor of NAPAs, I always thought NAPA was missing the boat when it came to specialty aftermarket parts as brought to light here a few times. Especially with their buying power. Just go and look at ALL their competitors stores to see the abundance of goodies for trucks, compacts and performance related parts. The market is huge surpassing 50 billion this year! I know this is a HUGE seller these days by my own means, I just retired of late from the industry and the numbers are big for these type of products. Just look around at the truck sitting next to you at the stoplight.
The surprise was that I just attended an event this last weekend in INDY call Goodguys which was a "hotrod" event and could not believe me eyes. A NAPA store onsite at the event! I have seen a store at the Louisville NSRA event before...but now I see a definite trend and was told it was going to continue! This was out of the Indy DC apparently.
The deals on tools and chemicals were great! I myself spent over $150 and The counter help was excellent and people flocked to the tent albeit a bit smallish for NAPA and rain put a damper on things from time to time. The apparent manager remarked that they will be back next year "bigtime" and this was an last minute effort.
Also, a gentleman in the booth told me that NAPA is sponsoring ANOTHER huge car, truck and motorcycle event in INDY this fall (dates escape me but October 1 comes to mind and the web site is www.indycruise.com according to the flyers)on the streets of SPEEDWAY. I will be there to see this event and congratulate the NAPA management in having the forsight and planning to pull off such an endeavor. I wonder if they are doing more in the future??
The reason I am posing this here is because someone is doing something right! Someone is thinking about new markets. I see this as a clear and present danger to other marks. The combination of exposure of their offerings and great deals will give the whole image and products an uplift in my opinion.
Count me in for another 10000 shares just because I think this will catch on and will boost the companies image much like the NASCAR thing has done.
Anyone have any takes on this nuance?
I like your analysis Ancientrodder! YOu have proven to me that you have some sort of intercircle understanding of the business and given this alot of thought.
My take is that NAPA is weak on three fronts for the (what you call) the "retailish" business. First one is that the current distribution chain which has too many steps, which effects price AND profit. Balkamp is considered their "packaging" division and should have prowess in purchasing, but they screw it up running EVERYTHING thru the DCs. The DCs then are the culprit in the "non-competitive" pricing scenerios and profit hogging chain for both jobbers and CO stores. For them (NAPA) to compete one has to go in this chain to compete with direct competitors, catalog and internet sources which frequently carry this stuff. This is NOT an easy thing to change either. One of the experiments that was started last year and I have not heard much about of late was a few 4X4/truck stores out west was funded by GPC carrying Balkamp products in some configuration. While I applaud this experiment, I always thought they started in the wrong niche, should have been strictly regular truck, sport compact and high performance accessories store based in major markets, essentially corroborating your take on these markets. This is what their competitors are essentially doing now with their stores, just stop at a PepBoys or AutoZone to see the chaos.
Secondly, if NAPA is going to put their customary and usual yardstick to the profits of the "retailish" market they can pretty well hang it up. I like your "but it's "next dollar profit" in this case which means they probably would have never had one dollar of those sales if they never made an effort. So, stack it up as free profits, so to speak." analysis. This goes against the mindset that they (NAPA) could be doing something else to make more money given the time and effort. This used to be a good strategy but not anymore in my opinion. Many a company has done quite well on "next dollar profit" strategies.
Third, the lack of real excitement or whatever you want to call it at the jobber level (because they simply will NOT order or carry this stuff for the most part) will hurt the image as well. When jobbers don't carry this stuff, the parent brand always gets hurt from an image point of view.
I see napa's customer base all the time as a counterman. I have at least 5 customers stomp out of the store per week.
The mantra is "I can get it cheaper at ________"
GPC has allowed the other guys to redefine the market in a negative way, while remaining the "parts store your grandpa goes to for tractor parts". The car show appearances and other things are too little too late. The marketing is all very culturally biased also. America has chosen the Large chain with low prices and low quality over independent stores with good parts.
Of course mechanics will continue to buy good parts, but with businesses such as ASCO coming on strong in the wholesale only market, they will edge GPC out.
GPC rode the fence too long IMHO.
I feel strongly enough about this that I am returning to college to finish my degree and enter another field. Not to mention selling my GPC stock at the current price.
Graphs or no graphs, this company's thinking is outdated and no longer works in the current market.
KRTArcher: I have been away from the counter a long time, but I have not been absent from the NAPA Stores. Your logic is slightly flawed and your understanding of NAPA's Marketing plan is shallow. You should not assume that your experience on the counter of one store is an accurate cross-section of NAPA's customer base; The economic and racial demograhics of the NAPA stores are as diverse as our country. I also don't think you should cast dispersions on the people who cannot afford quality parts as "stompers" and the only people who buy NAPA parts as "grandpas". America buys only as the individual consumer makes the buying decision. There is as much a "one-size-fits-all" auto parts store as there is a "one-size-fits-all" person. The NAPA marketing plan is not intended to be cultural specific. It is focused on a simple theme "Buy the good stuff". Buying the "good stuff" crosses all cultures but so does buying the cheap parts. AutoZone has chosen to attract those buyers who are interested in price over quality; it is not culturally specific. Their customers are for the most part, unskilled in mechanics and unknowledgable about product quality differences. Can one store represent both worlds; Can Walmart attract the Neiman-Marcus customer? Doubtfully. I'm sorry you are leaving the industry. It needs bright young passionate people. What school will you be attending?
well those are nickel and dime cust that take up all time when we have other things going on if that bothers you than either get use to it or quit. after this being my 24th year ive seen all sides and can tell you that this is going to happen anywhere you go lowes, homedepot or any service sector that services the public suck it up.these nickel and dimers are your profit margin.
you are correct, go back to school and then try fix the things you believe are wrong when you are educated enough to know the difference. NAPA has never been a market leader to the retail customer and probably should not try to be. There will always be knowlegeable wholesale and retail customers that value quality and accept that there is a cost associated with it. these are NAPA's core customers and they have done a good job for them over many years.
Do you feel these efforts to improve the companies position to serve the automotive consumer are a waste of time, come on. The better the position of the company in the retail market the better equiped it will be to serve you as a wholesale customer. The autoparts business is all about cash flow and having wholesale accts who get special terms or discounts takes away from that cash flow. I would think any person who knows the NAPA history would have open arms to the concept of the company making more revenue on the retail side so it can improve services in their other market channels such as,Farmers,Mechanics etc...
Welcome...from one retired guy to another. I won't say your experience was isolated, there are many other shows and car events that NAPA participates in, however they aren't "national" or HQ's sponsored events. The participation is up to the area distribution centers and the GPC owned or independantly owned stores. You are right, they are a great opportunity to get the NAPA logo in the public eyes. Many of those events draw over 100,000 people and both the participants and event visitors are potential customers. I know there are several people at NAPA and GPC hq's that review this site. Maybe they will get the hint that particpating in the street rod and hot rod shows are a money making venture and not just a dead expense. They might even suggest encouraging stores and DC's to sponsor such events ... and maybe offer them some sort of co:op or rebate ... you never know!
Galat, you make perfect sense and I kind of figured that the regions did this. Whoever is in that region has the kind of leadership that I like as a knowledgeable stockholder. I believe that Louisville and INDY are in the same region, so it looks like the same person(s)? Not afraid to try new ideas!
AZ made this leap a few years ago by sponsoring a few major events such as Super Chevy. This is okay but indigneous events would be better and it looks like NAPA is ahead of the curve. All of these events have their own demographics but it looks like the upcoming INDY show is an "open" show with anything on wheels coming and covers more than one show and location. That's the new trend and it's an "entertainment" show which means someone with some knowledge is doing this for them or from inside which I doubt. I think it would be a good move to put a body or entity at-large to do events all over the country for the regions. These events are difficult to accomplish and make successful so it takes a village of people to make this happen.
I like this alot, and as a former exec in the automotive aftermarket field I can tell you that sales in this market will definitely grow the image and moreover the market for them if they pick their parts correctly. NAPA has been traditionally weak in the "retail" end of the business courting wholesale customers. It would be good to have both.
Good job to the region folks that are doing this!