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From: Lance (Oil and Lube Business, Wal-Mart and Competition)
Remote Name: 66.82.48.140
Date: 01 Jan 2004
Time: 13:46:03
So You say; "Wal-Mart is No Competition in the Oil and Lube Business?" I say: BULL !!! In case anyone has not been watching the long lines at Wal-Mart for oil changes and watching the price of $12.99 it is time you ought to take notice. We all took notice in the Early 80's when Jiffy Lube rolled out like thunder with long lines, vacuuming cars and calling out commands in beautiful new state of the art buildings and took the industry by storm. Now we see Wal-Mart has how much? 11% Market Share? WOW, that was fast, but it does not stop there. Unless you are completely in the on-site fleet business of larger trucks or vehicles which do not fit into regular bays you have your work cut out for you. Customers have huge 10 foot ball field waiting rooms all air-conditioned, called the Super Wal-Mart and people can buy groceries, goods and wait until their car is completed. 11% and growing market share is competition to the Industry. Many complain about Wal-Mart price point and say they are doing them cheaper than you can make any money on it. Not so. This division of Wal-Mart turns a healthy profit considering the spac used and the Industry standards for what a fast lube turns a quarter. They are doing fine and it is such a huge and easy thing for them they are adding Wal-Mart Lube centers at any store they can get permission to do it at or any plac there is space to build out. Wal-Mart is even considering code-ing each car with an RFID Tag which tells the type of oil, last oil change and other data, for even faster service all automated so the computer screen has all the information as soon as the car pulls near the bay. HA, you think you are so smart you can beat that? Try it? I would like to see it. And while all the fast lube industry is bad mouthing Wal-Mart, can I remind you that they Bad Mouthed, Microsoft, GE, Starbucks, Kinkos, Fed Ex and even Jiffy Lube before they went on to attain 40% market share in the early 90's. What I think is funny is that the mobile side of the business which services on-site generators, motor homes, large trucks, buses and fleet vehicles on-site is about the only way to compete against the Wal-Mart scenario who really does not even want that business. http://www.OilChangeGuys.com . Anyone who does not have a strategy for maximum referals, community involvement, customer retention and fast and reliable service is doomed. And you must have all those in place, otherwise you will find that 25% of your current customers will migrate to Wal-Mart who are within 10 miles of a Wal-Mart. Is the Industry so arrogant that they believe that a customer wants to pay more? Why would a customer with 2.2 kids, white picket fence, credit card debt, college degree, Mini-van, who is worried about how they are going to send their kids to college; want to pay more for an oil change? Because they like you? HMMM? May I ask you what you have done for them today? Because people forget real fast when the price is double at your Quick Lube, Triple at the Service Station and Quadruple everytime they go to Jiffy Lube for an up-sell and leave with a sore rear end. If you truly are not affected by Wal-Mart then you are doing a wonderful job. But also realize that the number of new cars which have been sold the last three years has increased sales in the after auto service market. Did you have increased sales of 10%, if you did and still have a Wal-mart doing oil changes near bye you are a great operator who knows their customer. If you have not increased sales in a time of more new cars on the road in an industry which tracks the new car market for three to four years out, then you may wish to re-think your entire marketing strategy and focus on educating your customer, making them happy, getting referals and staying leading edge. You may have to work a little harder since the rules have changed a little and that means paying attention and studying the reality and not denying the customer's opinion or what is right in front of your face. Do not kid yourself, Wal-Mart's Oil Change module is producing good profit and it is not going away. Maybe you need to go mobile and stay away from Wal-Mart?
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