As Japan's largest automotive retailer, Autobacs Seven has the same sort of name recognition there as AutoZone has in the U.S. Judging from what Autobacs has achieved in Japan and its recent acquisition of financially-challenged Strauss Discount Auto, Inc., it's certainly no stretch to think Autobacs may be thinking about building the same sort of stature in the U.S.
Many of you may recall my visit to Japan in 2004 and the report I filed on Autobacs. The quick refresher is this: There is no other automotive retail store on the face of the earth that can match its flare for retail. I'll never forget the Super Autobacs store I visited that featured three movie theaters and a cafe. I felt like I was in a small mall in the 55,000-sq. foot, two-story facility.
There's no doubt that Autobacs will bring excitement to Strauss, which becomes Autobacs Strauss, Inc. The company wisely is choosing to get its feet under itself by concentrating on rolling out new product categories with a heavy tire emphasis rather than quickly trying to open new stores; however, the latter is scheduled to happen in 2009. (A caveat: The Autobacs Stanton, Calif. "super store" (35,000 sq. feet) may have been a little too aggressive even for the West Coast, because it reportedly is running at a loss. Most of Strauss' East Coast stores will be much more manageable at 12,000 sq. feet.)
As AutoZone and Advance Auto Parts and a host of others are planning on boosting their efforts to obtain more commercial business, one has to ask why Autobacs Strauss wouldn't want to do the same. First, that's not what Autobacs is about. The niche they know is hard core retail, and the company they have bought has long been retail-oriented. Together, they can make an even stronger retail statement.
Second, it needs to be emphasized that none of the aforementioned retailers are giving up their retail business in favor of the commercial business. They just want to build their commercial business because it doesn't make sense to just battle for miniscule market share changes in one segment of the business and shut yourself out from the largest part of the business. And, as I have pointed out before, the big box players like AutoZone and Advance have the infrastructure to run with the big wholesale dogs if they so choose.
Third, the DIY market is not going away; in fact, it offers ample opportunity for a retailer like Autobacs Strauss that will attack the segment with religious-like fervor. Just look at what we found in our latest DIY survey (page 16): the average amount of money spent by the average DIYer last year almost doubled. To nobody's surprise, "money saved" was the No. 1 reason cited by DIYers choosing to do their own work.
We can't have this conversation without talking about specialty parts, which is a forte of Autobacs. This part of the market is highly profitable and growing. Just look at what we found when we compiled our February State of the Industry Report: one, 36 percent of the people/businesses that install specialty parts are consumers; and two, eight out of 10 of independent repair shops install specialty parts, many of which are brought to repair shops by consumers.
It's clear that Autobacs is just what Strauss needed. Now we'll see if what Autobacs Strauss offers is what East Coast DIYers want.
Larry Silvey, Publisher & Group Editorial Director [email protected]
