Car care merchandise is delivering incremental sales with the help of private labels and impulse purchases.
Customers have long ventured into local convenience stores to grab a bottle of windshield washer fluid or oil for their cars. Years ago, a small display would hold a few bottles of automotive fluids in case of an emergency. Today’s suppliers are stepping it up with private label accessories and automotive fluids (engine oil, brake fluid and power steering fluid) that can save retailers a significant amount over national brands, while delivering higher profit margins than ever.
San Antonio-based Tesoro Petroleum most often gets requests for oil, washer fluid and antifreeze in its western U.S. stores, seeing margins of 36% from the category. The chain uses McLane and Core-Mark products, stocking brands such as Pennzoil and Terex. The car care accessories are merchandised on inline gondola shelving and peg sets, and sell anywhere from 79 cents to $2.49.
“The automotive category is a staple section customers expect to find in a convenience store,” said Scott Huggins, merchandising category manager for Tesoro.
Although, in general, automotive remains a relatively low profit category for Tesoro, making up about 8% of merchandise sales depending on a store location, this category can be one of the most popular sections. Chains scattered along interstates and heavily traveled roads find themselves center stage for customers seeking automotive products during travel. Highway convenience locations, such as TravelCenters of America, have to keep a heavily-stocked automotive section because of the amount of traffic from commercial drivers and motorists that pass through the doors daily.
With so many commuters and truckers hitting the roads this winter season, a good many of them will require some automotive accessories in addition to the usual snacks and drinks when they stop at convenience stores.
Assembling an emergency kit is a smart move, according to AAA, including items such as an ice scraper and snow brush, gloves, hats and a flashlight with fresh batteries—all items that convenience store operators can merchandise effectively to go along with traditional items such as motor oil, air fresheners, light bulbs and fuses.
Furthermore, Millennials, those born between 1980 and 1994 and representing the largest generation of car drivers since the 1960s, have been hard hit by the recession and are increasingly turning to do-it-yourself maintenance and repair to keep their autos running, according to The NPD Group, a market research company.
A store level analysis of sales from over 18,000 U.S.-based auto parts stores tracked by NPD showed that stores in a cluster identified by having a high Millennial population achieved higher dollar sales per store in several key parts categories. Overall dollars per store for total hard parts in the high Millennial cluster were 11% higher than in the cluster of stores with a low Millennial population. In addition to hard parts, the high cluster stores did better in light application categories like filters and spark plugs.
“Having lived through tough economic times and being one of the age groups most impacted by it, Millennials may remain cost-conscious for a long time and, as a result, could represent a new era of DIY repair,” said David Portalatin, industry analyst for NPD’s. “Gaining a better understanding of what Millennials are likely buying today will enable marketers to position their brands, stores, and services for what could be a lifetime of car care purchasing by 65 million influential young drivers.”