Lang Aftermarket iReport: Integrated distribution ‘Do-It-For-Me’ surge

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“Integrated distribution is the largest light vehicle aftermarket channel in product volume and growth. It is also among the most balanced light vehicle distribution channels, with strong positions in both the Do-It-For-Me (DIFM) and Do-It-Yourself (DIY) markets.

“Integrated channel growth is strongest in the Service (DIFM) market. Over the next five years, DIFM volume will generate virtually all Integrated channel car and light truck product growth. See the 2021 Lang Aftermarket Annual for in-depth analysis of all five light vehicle distribution channels.”

— Jim Lang, publisher, Lang Aftermarket iReport

Identifying Characteristic

The Integrated channel has a unique characteristic: products do not change ownership (or franchise affiliation) from the time they are purchased from Manufacturers to the point of ultimate consumption or sale to an Installer (DIFM outlet or DIYer).

Competitive Advantages

Integrated distribution can provide several important competitive advantages in the car and light truck aftermarket.

First, the Integrated channel often has lower distribution costs than most other car and light truck aftermarket channels. This results from the channel’s integration (combination) of distribution levels that eliminates the add-on costs and gross margins that exist in multiple levels.

Second, the Integrated channel generally increases the ease of implementing marketing and sales programs, since it does not incorporate multiple levels of decision makers who may have differing points of view and invested interests regarding some sales and marketing activities.

Third, Integrated distribution can enable large companies to multiply the competitive impact provided by their size in battling with smaller aftermarket rivals.

Sales Expansion

Integrated distribution achieved 50% of total car and light truck aftermarket product growth between 2014 and 2019, recording the largest domestic nameplate product sales share and ranking second in the total share of foreign vehicle aftermarket product volume during these five years.

Service (DIFM) Growth

Service (DIFM) market chains and franchises have long histories with the use of Integrated distribution in the light vehicle aftermarket on a national and regional basis.

Large retail Tire chains are examples of Integrated distribution in the light vehicle Service (DIFM) market.

Many vehicle repair operations engaged in Integrated distribution specialize in a limited array of products and services. Undercar repair (Exhaust, Brakes, Suspension, etc.) was an early focus for some of these Specialty outlest and many have since expanded the breadth of vehicle repair that they offer.

Commercial Growth of Retail Chains

Integrated distribution has been making some of its strongest DIFM market inroads through the product sales by Retail Auto Parts Stores to Installers (commercial) accounts.

Over the past five years, Wholesale (commercial) business has generated most of the sales increases achieved by the major Retail Auto Parts chains in the U.S.

Most Retail Auto Parts chains have recorded Service (commercial) market growth at several times the pace of their DIY sales increases. The Service (commercial) market growth of Retail Auto Parts chains is progressing at a faster annual rate than total DIFM car and light truck product expansion.

Projected Growth

Lang Marketing projects that virtually all of the Integrated channel sales expansion over the next five years will be generated by the Service (DIFM) market.

Much of this Integrated channel growth will be generated by Repair Specialty chains that are expanding the scope of repair they offer and Retail Auto Parts Stores that are increasing their commercial sales.

Six Major Takeaways

  • The Integrated channel has a unique identifying characteristic: products do not change ownership (or franchise affiliation) from the time they are purchased from Manufacturers to the point of ultimate consumption or sale to Installers (Repair Outlets or DIYer).
  • Integrated distribution is adding more annual volume than any other major aftermarket channel, with strong positions in both the DIFM and DIY light vehicle markets.
  • Integrated distribution enjoys several competitive advantages in the light vehicle aftermarket including lower distribution costs, ease of implementing marketing and sales programs, and its adoption by some of the largest organizations in the aftermarket.
  • Integration distribution’s DIFM growth has been fueled by the Integrated distribution activities of large repair chains and the expanding commercial market sales of Retail Auto Parts Stores.
  • Integrated distribution recorded 50% of total car and light truck aftermarket product growth between 2014 and 2019.
  • Over the next five years, DIFM volume will generate virtually all Integrated channel car and light truck product growth. See the 2021 Lang Aftermarket Annual for in-depth analysis of all five light vehicle distribution channels.

Copyright 2020 by Lang Marketing Resources, Inc.

NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.

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