David Meniane, CEO of CarParts.com

“Need-based” DTC Product Market 

The U.S roads see about 280 million cars, a big market to tend to, and varied demands for parts due to average age of fleet currently being 12 years or more—a market of $200 million worth of ‘need based product’ which David’s company is capitalizing on pretty substantially and effectively. Working with the founders not only got him exposed to the business but also helped him build his team to take the business to the next level.

An opportunity to leverage need-based vs want-based market, where “families need to keep their car on the road when the economy gets tight. They need to maintain their car. The majority of the people that we know don’t drive a new car. So right now, what we’re really focusing on is delivering an outstanding customer experience. We’ve made a ton of investment in our supply chain. We’re a direct to consumer (DTC) retailer. So what we do is we source high quality parts globally, and then we ship them direct to consumer. What that allows us to do is offer great quality parts at very competitive prices, which in this economy is very important” – essentially delivering a two step process in an industry that’s predominantly 4-5 steps still in several cases.

Brick and Mortar Shops vs E-commerce

Analyzing the customer experience of someone walking into a brick and mortar shop and asking for a specific solution became the key element in question to fulfill customer needs when compared to the traditional route.

“Why is the customer going to the brick and mortar shop? What they need is, they have a problem and they’re looking for a solution. I drive this car, year, make model, and I need this. And then the counterman or counterwoman goes into the computer, types in and says, this is the part that you need. This is the solution to your problem.

And so what we’ve tried to do on our website is replicate that; where we ask you, year, make, model, what’s the part name or what’s the problem that you’re trying to solve, and we offer you a solution. It’s just cheaper, but it’s the same concept. So do-it-yourself is that, your typical customer that goes on our website, finds a video on YouTube, buys a high quality part, and is comfortable doing the job themselves. The do-it-for-me, you know, you need a friend or a mechanic to help you do that repair. For us, about 80% is do-it-yourself. I think people underestimate how easy it can be to fix a part, whether it’s headlights, or brake pads or a bumper.

The beauty of our business is the supply chain and the data and the customer experience that goes behind it that allows us to service our do it yourself customer that goes on YouTube or someone that’s a little more sophisticated that is more closer to a mechanic.”

Setting up the business model to be omni-channel and building on top of their supply chain has helped target competition in the online market place. With them selling on Amazon, E Bay, and Walmart, chances are, a customer shopping on E bay is “buying from us” as David puts it.

Predictive and Prescriptive Analysis

Data is key. That’s where knowing more about the customer and telling them things, maybe before it happens, or help them self-diagnose and get something they may not have otherwise felt the need for, is crucial.

Carparts.com Inc. has put in 4 million man hours with over 100 people building what they call as their “secret sauce”; their catalog! Clearly pointing out what part fits what vehicle, what year, make, model, sub-model can only be done right with proper data. To surge ahead of the competition calls for few components that can make impact on the customer. That’s where the investments in data science and engineering has helped them be there for the customer and enrich the customer experience.

“Having that accurate data is critical. So the catalog is our secret sauce. Then the second point is, what are some of the external data points that you can tack onto that catalog, to build that predictive analytics ? For example, if you have a VIN number and mileage, you can start guessing what are the next steps for maintenance – for oil change, filters. What’s the likelihood of a certain part name failing after a certain number of years? So if we have a VIN number and age and mileage, there’s a lot of things that we can do and start giving information to that customer. The other thing that we’re trying to do is starting to tack onto what we’re doing, which is selling parts. Originally, it’s just a parts company. And now, how do we become a destination for that customer and give them information, even if it doesn’t have to be monetized? For example, recall information. If our customer has a pending recall, we want to be there and start communicating to them, hey, there’s a pending recall. We can help you connect to the dealer. So there’s a lot of things that we’re trying to do that are based on the data.”

Targeting the DIY customer alone sure wouldn’t suffice. So for the help me fix it crowd, team David has started piloting a new solution called ‘carparts.com get it installed’.

“What it allows us to do is start capturing some of that do it for me or the people that don’t have that expertise in terms of installing parts or fixing a car. So they go on our website, they type in a year make model, and then we start referring them to a trusted mechanic that will do the job at a pre-negotiated price. It allows us to move away from just selling the part to becoming that resource for the customer. and connecting them with a mechanic. We don’t monetize that relationship. We don’t get paid, we just want to sell the part and be there for the customer.”

Now more than halfway to a billion dollar company, the roadmap for the future is execution as portrayed by David – “supply chain, data, investing in customer experience.” Mastering the core vs innovation, doing both collision and replacement parts, but also mechanical parts certainly gives plenty of opportunities for this company that carries “70,000 individual SKUs” in their warehouses. Simplifying branding strategy for the business, focusing long term on couple of big name trademarks like JC Whitney, seems to be a solid strategy in place, as the company marches ahead in its journey.