Auto parts panel foresees growth in exchange of products and info - B2C Internet model - Internet/Web/Online Service Information - Brief Article - Statistical Data Included

DSN Retailing Today, June 18, 2001

CHICAGO - The future of B2C sales in the automotives parts industry may be in the billions of dollars, but the B2B potential can be measured in the trillions, speakers at an automotive aftermarket conference near Chicago said last month.

Ohio State University marketing professor Roger Blackwell compared the B2C Internet model to catalog sales, something that will augment traditional sales rather than replace them. "The Internet is not for selling but for searching," he said.

Blackwell cited data showing that B2C sales grew from $3 billion in 1997 to about $40 billion in 2000, and are projected to reach up to $107 billion in the future. However, B2B sales are expected to hit $6 trillion in 2004, still representing less than 10% of all B2B transactions, while reducing the costs of buying for companies. AMR Research predicts businesses will buy 2.8 trillion in supplies over the Internet in 2004.

But the Internet is about more than selling on line, he said. It's also a way to interact with customers, input orders, file expense reports, share employee ideas, instant message with suppliers and process insurance claims. Business-to-business also drives cost and supply chain efficiencies. "Webifying" manual processes can improve order fill rates and accuracy.

"It doesn't change channels, it just introduces more efficiencies," he said.

As far as the auto after-market, e-commerce has the power to cut inventories--a burden on the industry at the moment--by 20% to 30% and raise gross margins, said Bruce Bowen of E-3 Corp. It is already shifting the demand chain from product-centric to customer centric. Distribution methods will be centered more on speed, lower inventories and a digital supply chain. Service centers will use the Net for customer relationship management.

"Managing demand from the store level to the distribution center is key," Bowen said.

E-commerce will change the traditional manufacturer distributor-customer dynamic, David Lennon of Manhattan Associates told the conference. E-commerce portals will include not only commerce Web sites, but also supplier and buyer exchanges. Competitors will share supply chain advantages with each other in e-marketplaces.

Charles Germano of IBM Wholesale Distribution in the Americas offered a picture of a collaborative supply chain with multiple tiers acting together, including public and private-trade exchanges.

Jobbers and parts makers who don't make technology a part of their business plans will be left behind. "E-business will be part of everything you do," Germano said.