Applying Big Data to the Automotive Aftermarket
Rob is the director of the category management team. Through best practices and developing their own tools, the category management team at Federal-Mogul Motorparts is taking the company to new places. Five years into his tenure with the company, Rob’s energy as an agent of change hasn’t mellowed.
Q: For those of us who don’t know, what is category management?
A: At its most basic level, category management is the process under which manufacturers and retailers collaborate to understand shoppers. It’s about discovering what drives customer purchase choices, and overall trends within a category. An example of a product category in the automotive aftermarket is braking systems. Our category management team collaborates with warehouse distributors and retailers that sell our automotive parts.
Q: We hear the term “Big Data” often. What data is Federal-Mogul Motorparts collecting and how does it affect how the company runs its business?
A: In other industries, there are companies called “data aggregators” to do this work. For example, you go to your favorite retailer and you buy shampoo. They scan the product during checkout. The data collected during the scan is stored in a database for the retailer. Then, a data aggregator, Nielsen/IRI, for example, collects the data from the retailer. They also collect data from the other retailers who sell shampoo. All of that data is aggregated into a complete set of data for shampoo sales within the entire country for all the major players. Companies make business decisions based on this data.
In the automotive aftermarket, that same big streaming data set doesn’t exist yet. So we created our own automated process. We are the data aggregators. Our customers historically had given us access to the data, but we never had the means to collect and store it. Now that we have the right tools, we can analyze all that data, identify specific trends and share what we learn with our customers to help them grow their businesses.
Q: What are some of the big wins Federal-Mogul Motorparts has gained from its ability to make sense of it all?
A: Every area of category management is positively affected. Our customers benefit from our ability to stay on top of product trends, the pricing mix and seasonal influences.
Q: How are customers reacting and where do you see category management going for the company and the industry?
A: Some customers are quicker to adopt the benefits of category management. When they do, it’s as if a light bulb goes on. How could any business not want information to help them make fact-based decisions? We believe this analysis sets us apart to our customers.