The story you are about to read is true; the names have been changed to protect the guilty.
Recently, I walked into a “Mega Auto Parts” store carrying the battery from my 2004 Mini Cooper S. I placed the battery on the counter and told “Jim” the counterman I needed a new one. After checking the computer he said, “Well, I’ve got a Mega Start that will work for that particular vehicle, that will run you $99.95.”
I remember thinking that he must be trained to lead with the private label brand and almost instinctively I said, “Mega Start, who makes that?”
Without skipping a beat, he said, “Mega Start.”
I replied with something like, “Well, that may be the private label brand you sell, but I was curious if you knew who manufactured it for you.”
He snapped back insistently, “Mega Start.”
At that comment, he became visibly angry and started pounding his finger on my battery on the counter, pointing to it asking, “Well, who made this one if you’re so smart about who makes batteries?”
Irritated, I fired back with both barrels, “Well I don’t know who made it, maybe Bosch, since Mini is made by BMW. But one thing I know for sure is that it wasn’t made by Mini just because that is the brand on it. Just like I know that your Mega Start wasn’t made by Mega Start just because that is the brand on it.”
What happened next stunned even a jaded aftermarket curmudgeon like me. Jim turned and walked the length of the counter, grumbling to himself, and went into the back. I stood there waiting, assuming he had gone to ask a manager or someone who made Mega Start batteries. Stupid me. After about five minutes, I asked another counterman if he knew what happened to the guy who was “helping” me.
“Yeah,” came the reply, “he went to the bathroom.”
Fast forward to me buying a battery from “Acme Auto Parts,” gleefully paying $30 more for the battery to not have to deal with Jim. Out of morbid curiosity I asked Fred, my Acme counterman, if he knew who made my new Acme battery.
“Yes sir,” he said, "Johnson Controls makes our batteries.”
I think there is a profound lesson for aftermarket resellers to take away from this story. It might surprise you that it is not directly attributable to Jim’s outrageous behavior. Every company, no matter how stringent their hiring or training practices are, eventually ends up with a bad apple. The bigger issue in this experience relates to brand strategy.
There is a battle underway between manufacturers and resellers over who owns and controls the brands under which aftermarket parts are sold. National aftermarket brands as we have historically known them have been owned by manufacturers. Increasingly, resellers are attempting to gain the control and margins that ostensibly come with owning their own brands.
Ever since Sears pioneered the concept of “exclusive national brands” like Craftsman, Die Hard and Kenmore, large retailers have been coveting the control and margins that this private brand strategy affords. It is my observation that most aftermarket resellers are going down the private label road thinking they are creating an exclusive national brand. But there is a huge difference between creating an exclusive national brand as Sears has done and merely adopting a private label strategy.
What are the differences between creating an exclusive national brand and implementing a private label branding strategy? It starts with product management. When Sears created their brands they started with established suppliers who had proven themselves capable of producing a reliable and durable product. Through research they made sure their exclusive national brand products had the features and benefits desired by customers. They combined the products with services such as warranties, service programs, replacement parts, etc. Then they marketed the brands individually with specific strategies designed to compete against existing national brands.
They did not slap a one-size-suits-all brand on every product category in the store, like the Costco Kirkland and Wal-Mart Equate private label brands.
They did not simply look for the low-cost provider of a “fit for use” product. They did not leave it up to their sales associates to interpret their strategy for customers. They trained their people continually on the value represented by their exclusive national brands.
Most aftermarket resellers are taking the private label approach instead of developing an exclusive national brands strategy and it may be working to their detriment.
I know first hand from the research I have conducted that most service technicians care who makes the products that are private labeled by resellers. I suspect that today’s increasingly savvy consumers, like me, care who makes the Mega Start battery and that more and more will be asking the question. While I realize that customers form strong brand allegiances with stores, there is still an undercurrent of credibility that remains with the national brands the store carries.
In the case of the experience related above, I don’t know if the management of Mega Auto Parts trains their counter people to respond to queries like mine. I can only assume that is not the case, based on Jim’s behavior. And at least to my own perception, that is a mistake.
I understand the desire of resellers to control their own destiny by the choices they make in suppliers for their private label offerings. But at what point does that desire for control collide with the desires of the customer? In business, as in life, there are things we can control and things we cannot. I believe one way of approaching a good business model is to control everything you can and channel all of the results of that span of control into profitably meeting the needs of your customers. After all, customers are the people who really are in control…and they have choices, too.
