Press Releases

Internet and Extranet sites for requisitioning aftermarket products are becoming more widely available by the day.

Users, too, are growing rapidly according to an online survey completed by Harris interactive Inc. (Nasdaq:HPOL) among respondents who have used the Internet to purchase automotive parts ore accessories.

Both professionals and DIYers increased purchasing activity on the Internet during the spring of 2000 compared to November 1999, when an identical online survey was conducted. Increases were reported both for parts and accessories purchases. David Ogilvie of Walden Consultants Ltd. who designed and analyzed the Harris survey, observes that "Internet users tell us 78% of the time 'Shopping Around' and interacting with vendors is better than conventional methods of buying parts and accessories. Also, 54% of users say 'Price' is better on the Internet."

This is consistent with the general opinion that Internet merchandising can serve to broadly lower unit prices, thus creating a challenging environment for high quality earnings.

Henry Allessio, who along with Ogilvie is a founder of Walden Consultants, points out the Internet opportunity for managing business costs, which in turn creates the potential for earning attractive levels of profit.

"Survey respondents demonstrated a clear tendency for internet transactions to be more accurate than conventional methods of purchasing auto parts and accessories," says Allessio. "Two and a half times more respondents indicated 'better' Internet accuracy than those indicating 'worse.'"

Fewer ordering errors reduce the need for returns - a substantial hidden cost to aftermarket supplier. Among traditional WDs participating in AWDA's Financial Analysis Report, sales returns have increased in 6 of 7 years since 1992.

In 1999, Returned Sales and Allowances were 38% of net sales, about one half of which were "merchandise" returns. Investments in e-commerce can be significant. Moreover, resources invested without first understanding strategic ramifications can devastate a company's competitive performance. Ogilvie reminds us that, "Most Internet investments are intended to attract, interact, and transact with customers. But that's not enough."

"In order to derive full benefit from online customer activities, resources must also focus on the microeconomics of delivering appropriate values," according to Allessio who goes on to say, "many companies are swept up by the beauty of their web sites, and fail to allocate enough thinking to the cost side of strategy development."

Increased speed and accuracy, throughout an organization, is a way in which e-commerce can help reduce unit costs.

Survey results and related analyses are produced in cooperation between Harris Interactive, one of the world's leading Internet research firms, and Walden Consultants which is active in helping clients assess the impact of e-commerce.