ELEVATE WHOLESALE MARKET SHARE THROUGH DIGITAL SALES

Cynthia Tenhouse, VP, Lexus Guest Experience, delivered a consistent and clear message at the recent Lexus Guest Experience Leadership Summit:

“Elevating the online experience will go a long way in meeting the expectations of our guests and matching the exceptional standards of the Lexus Brand Promise.”

Cynthia Tenhouse
VP, Lexus Guest Experience

The Digital Service Opportunity she described not only applies to the guest’s online service scheduling experience–it also relates to Lexus Genuine Parts sales and represents a significant retail and wholesale revenue opportunity.

IMPROVEMENTS IN THE DIGITAL EXPERIENCE

We have learned from our Lexus Guests that our most significant opportunity for improvement is the digital experience. Gaps in the digital landscape can hinder online service scheduling bookings, reducing service and parts revenue opportunities.

During her Summit keynote presentation, Tenhouse illustrated Lexus’ service growth potential by sharing one month of Lexus Digital Service Opportunity Funnel metrics. The funnel chart follows the guest path through the online service scheduling journey, from total service page visits to scheduling a service appointment.

The numbers reveal an 84% missed service opportunity, resulting in a loss of not only service revenue but also retail parts sales.

CAPTURE LOST RETAIL OPPORTUNITIES THROUGH WHOLESALE PARTS SALES

Lexus Wholesale Parts departments are in a position to recover lost retail parts sales through their wholesale business. Gary Price, Director of DENSO Products and Services Americas, shared compelling numbers regarding the Lexus Wholesale Parts opportunity. In his Summit presentation, he presented the following “Wholesale Math”:

Lexus UIO	5,405,256
Distinct CP VINs in Lexus Dealers (2022)	1,876,465
Vehicles Serviced Elsewhere	3,528,791

Price explained that even if every Lexus owner wanted to service exclusively at a Lexus dealership, Lexus dealers do not have the existing capacity to service 5,405,256 vehicles. Lexus dealership parts departments, however, can provide parts to 100% of those vehicles by maximizing wholesale parts sales to Independent Repair Facilities (IRFs), especially in the mechanical category.

In 2022, the wholesale parts industry recorded $123 Billion in sales.^[1] A breakdown by shop type reveals that 60% of that business was mechanical parts sales. But, as explained in Lexus WIN article Collision and Mechanical Sales Opportunities, Lexus Dealers are only capturing 10% of those mechanical parts sales.

Mechanical Wholesale Parts: The Largest Market Share Opportunity

While insurance company estimates nuance collision parts sales, IRFs purchase parts based upon their and their customer’s choice without directive from an estimate. The result is a more direct digital sales funnel for mechanical parts sales.

Lexus Technology Partner OEC compiled data from its RepairLink mechanical parts sales platform to help characterize IRF digital shopping behavior in the Lexus digital space. The information compares the number of IRFs viewing the platform to the number of IRFs buying. Although the percent conversion is higher than that of the Lexus brand overall, the metrics reveal that an average of only 21% of IRF viewers converted to sales. The story is the same from year to year, illustrating that Lexus Dealers have an opportunity to improve the digital sales experience but have not taken effective steps to do so.

SHORE UP THE DIGITAL SALES FUNNEL

From Lexus owners to IRFs, Lexus guests tell us that our most significant area for improvement is the digital experience. Today’s customers expect a brand’s digital experience to match its standards. For Lexus, that means an exceptional digital experience that offers value, transparency, and unparalleled performance.

An introspective look at your dealership’s wholesale parts digital sales funnel is the first step to improve the process and conquest lost market share. As you step through the IRF’s online shopping experience, look for the following customer pain points:

Participating in a Lexus Wholesale Parts Partner Program should be at the top of your wholesale toolbox. These SaaS platforms provide a seamless online sales experience for parts sales, with certain parts supported by Lexus rebates for price competitiveness.

“Dealers that excel in wholesale parts sales have a few things in common,” explains Dave Rini, OEC Enterprise Customer Success Manager. “First, they participate in one of the Lexus Wholesale Parts Platforms, which allows them to sell more parts more efficiently. That is just the beginning.” Rini then identified these best practices that successful wholesale Dealers share:

• Promote your wholesale program through marketing tools, including those provided by Lexus Partner Programs and Lexus Dealer Ad Builder. https://lexus-win.com/articles/sales-tools-for-market-share-growth. EXPLORE: Sales Tools For Market Share Growth
• Use word of mouth to instill confidence from Dealer to shop. EXPLORE: Denso Feet On The Ground
• Respond immediately through the program or a quick call to eliminate communication gaps.
• Communicate value and expertise but seize upselling opportunities when needed and possible.

THE NUMBERS AND MIND THE GAP!

The numbers paint a clear picture: if you build it, they will most likely come. But that doesn’t mean they will buy! To reduce sales funnel drop off, identify pain points in the digital sales process and close that gap. The process may vary from Dealer to Dealer and platform to platform, but the experience should be the same: an exceptional, responsive Lexus digital sales experience that delivers trust, quality, performance and the promise of the Lexus brand.

Footnote: [1] Auto Care Fact Book, 2022