SEMA News - December 2010
The Chairman of the BTC Talks About Technology, Data and Why SEMA Companies Must Embrace Both
With Steve Campbell
We recently spoke with Moore about his involvement in the BTC and the need for SEMA members to understand the crucial role technology plays in business.
SEMA News: How did you become involved with standardized industry data and the SEMA Business Technology Committee?
Bob Moore: Back in 2003 or 2004, Jon Wyly, who was then on the Board of Directors and an old friend of mine, called me and said he needed my help. He told me that SEMA had to really start getting serious about business technology, so I began to work with him. We formed the Business Technology Committee, and we’ve been trying ever since then to raise awareness and educate the SEMA constituency about the importance of product data and technology in doing business and, really, in surviving. After that initial focus on education, we set about trying to identify the areas where SEMA involvement and assistance would most benefit the membership.
“Over and over again, we find that the more information that is available, the deeper the data is, the greater the likelihood that the customer will buy, whether the customer is a jobbing store or a car owner.”
Our ability to get our best new products to more places—more websites, more points of distribution, more big-box retailers, more auto parts stores—is the key to expanding our total market and greater sales. You can’t do that unless you’ve got good standardized, rich product information online. That might mean images or a wave file to listen to what a cat-back exhaust sounds like on the new Challenger, or it might be product specifications or installation instructions. The need for data is critically tied to our ability to expand our market, to get our parts into more physical and virtual places in order to sell them.
SN: We would assume that one of the biggest challenges is just getting people to accept the idea that good product data will actually sell more parts.
BM: That is the challenge. Many of the industry training programs bill themselves as helping one do things such as “drive more traffic to your website” and “expand your search-engine capability.” But at the end of the day, if consumers can’t find the information they need to help them make a purchase decision, it’s like running a huge marketing campaign to promote your store and then having the door locked when the customer shows up. It’s the same thing with data. You can drive all the traffic you want, but if customers end up frustrated by a lack of product information, no one
To see what I’m talking about just go out and surf the web for electronic equipment—iPods, televisions, any kind of electronic equipment. Start clicking around and looking at the wealth of product information and specifications that’s out there. You can see watts per channel and dynamic ranges and graphs and all kinds of different information. You can drill down even to the minutia on those products. Then go out and shop for auto parts. You will have a hard time finding more than a static picture of a part with a list of some very basic specifications. Very few companies have the product data out there for consumers to really dig in to see everything they need to know to buy a part. More and more, customers for our industry’s products are turning to online sources to gather information before buying. Our industry needs to be there
The general state of product data in almost every other industry is much better than ours. But ours has some additional challenges. When you go into a store to buy a television, the salespeople don’t care whether you are going to put it into a house or an apartment or a condominium. But if you go in to buy a supercharger or a cat-back exhaust, it does matter what make, model and year of vehicle you’re putting it on. That adds a layer of complexity—an application-specific aspect of product data and data management that most other industries don’t have to deal with. Data for a piece of electronics might include its size, color and warranty. We need all that stuff, but we also need to know that it fits an ’08 Ford Mustang with a 4.6L engine.
SN: Has the industry made progress? Are more companies coming to understand the concept and embrace standardized data?
BM: I sometimes feel like an evangelical minister out there preaching the good word. Clearly, we have a choir, the folks who understand it. There are companies, such as K&N, that arguably have some of the best product data in the specialty-equipment aftermarket—maybe in the entire aftermarket, including the replacement side. And, of course, if you go out and look on websites, there is more information available on these companies’ products than on almost anybody else’s. They understand that it’s critical to selling, and their products are available at more places because they make it easy for AutoZone, O’Reilly Auto Parts, NAPA, CARQUEST and the motorcycle stores. Some brands are omnipresent, and one of the reasons—though certainly not the only reason—is that they understand the importance of product data and getting it out.
SN: The SEMA Board of Directors has been evaluating whether SEMA should establish an industry data pool. What is an industry data pool exactly? What should member companies understand about it?
BM: Recognizing that more product data in more places expands our reach, grows our businesses and sells more parts, it made sense to the Board of Directors that our industry should consider a mechanism that could help all of our participants—manufacturers and resellers—get the product data right so that it can get to more places. It’s kind of a two-step process. One of the key elements of sharing data is making sure that you can put it in a format that the other guy’s computer can read, understand and use. That means working with industry standards—a standardized way of presenting the data and how it’s configured so that one guy doesn’t say Chevy while the next guy is using Chevrolet. A computer won’t see the two as the same thing. It can process data quickly, but it can’t make judgment calls.
One example that seems to work for most folks is their iPod. You load your CDs onto your iPod or into iTunes, and then you try to find the music that you uploaded. You know you put John Mellencamp in there, but where is it? Well, it’s under John Cougar Mellencamp, because that was the name he was using on that particular album. The computer cannot make a rational judgment to say that it’s all John Mellencamp, so put it all in the same folder. A human being has to do that.
“Our ability to get our best new products to more places—more websites, more points of distribution, more big-box retailers, more auto parts stores—is the key to expanding our total market and greater sales.”
The analogy would be a city that provides water to all its residents. Every homeowner could have a filtration system that filtered the city’s water so that it was all clean. But it’s more practical for the city to filter and standardize it once and then make available clean water to those who need it. That’s what a central, industry-sponsored data pool would do. If we can filter the data as it comes in from the source, the manufacturers, then we’re in a position to have available early, clean data to all the constituents, and we can save a huge expense for the industry. That’s the kind of thing that an association ought to do. That’s a good thing for SEMA to do.
SN: Who would fund this centralized and standardized system? Would each manufacturer who took part in the data pool pony up some portion of the cost?
BM: The association would use its resources to get the data pool established. After that, the cost to run it would be shared, since everybody benefits.
SN: How far down do you drill with product attributes and product data? Would the data pool assign part numbers?
BM: Not at all. The originator—the manufacturer—owns the data. How much data is required is again a function of the free market. I talked to one distributor who had leaned on its manufacturers to provide some extra data because the distributor thought that it would sell more if it could provide some extra information to the customers who came to its website. Lo and behold, the distributor was right. Over and over again, we find that the more information that is available, the deeper the data is, the greater the likelihood that the customer will buy, whether the customer is a jobbing store or
a car owner.
Moore is passionate about helping the industry understand the role of product information made available online. “The critical thing is to understand how important data is and will continue to be in doing business,” he said. “Nobody thinks we’re going to sell fewer products on the Internet going forward, and nobody thinks that retailers are going to be answering fewer questions from consumers.”
SN: What is the current status of the pool?
BM: We have come a long way. The crew that has been working on it has been out listening to the marketplace. We’ve talked with literally dozens of manufacturers and dozens of data receivers. We’ve done face-to-face interviews and focus groups with them. We’ve done qualitative web-based studies asking questions about where both receivers and suppliers of data are having trouble and where they think they need help. We’re getting very close to having a complete business plan. We should have enough information to put before the Board for a final vote on the proposal by the first quarter of next year. We are also in talks with the Motor & Equipment Manufacturers Association (MEMA). MEMA has an initiative called OptiCat that is a data service for the replacement parts side of the industry. It is all very preliminary, but we are in conversation with them about joining forces and working together. We don’t want to confuse the industry by having competing services or duplicating efforts.
SN: How can SEMA members help to move the project along?
BM: The critical thing is to understand how important data is and will continue to be in doing business. Nobody thinks we’re going to have less product information online going forward, and nobody thinks that retailers are going to be answering fewer questions from consumers. Products are going to become more technically complex, and we will need to expand our products into places such as sporting goods stores, big-box stores and new-car dealerships. They have sophisticated systems, and we will need to provide them with good data in order for them to sell our products. Data is the new means of exchange. It is going to be at least as important as a great distribution system and great salespeople have been in the past. SEMA members need to understand that this is where things are going, and that business is only going to get more data dependent.
SN: Is the BTC also working on other projects? What are the highest-priority items?
Since its inception, the BTC has really been focused on trying to assess where the specialty market needs to go vis-à-vis business technology. Education is first. So much of what we’ve been trying to do is getting people to understand why technology and data are so important and then working with the community of manufacturers, distributors and technology developers to show how we can apply these tools to improve our processes and expand our markets. That is the primary driver behind everything. Members can find a wealth of archived SEMA webinars on business technology topics as well as online marketing tips at www.SEMA.org/webinars.