BMWs and 800s, Tatas and Toyotas, Hyundais and Hondas, bikes and scooters. Vehicles of all make and size, from almost all countries, run parallel on the same roads in India. Yet, the company’s branded clinic or a roadside hakeem is the only option for them to fall back upon when they fall sick.
Under the circumstance, Reliance emerges as one of the few companies trying to seek a solution to the problem through their Autozone format. Arun Dey, chief executive, Reliance Autozone, unwraps the company’s ‘brand neutral’ concept, in conversation with Ranjan Kaplish and Satrajit Sen.
AUTOZONE IDEA
Q: Although the idea of Reliance Autozone is somewhat understood, can you explain how it struck originally and what were the pre-launch findings?
A: The number of vehicles in India is growing, and so is the demand for their services, spare parts and accessories. However, there are not many reliable options in terms of retailers or service providers for automobiles. You have either an organised service station of a particular manufacturer (who may not provide all services or additional accessories), or an unorganised workshop owner (you may not be willing to rely on his product). Autozone seeks to break the jinx, as it has not only brought experts on board for better services, but also offers genuine products that a customer can rely on.
Market research, being the primary base for a good business model, could not have been avoided at our end. We had done a detailed research to understand the needs of vehicle owners across all segments. All findings were seriously considered, and we’ve tried to accommodate all required services as well as products under one roof. We are open to suggestions that can help us serve our customers better.
Q: Discuss the brand’s USP. How would you distinguish Reliance Autozone from similar product and service providers?
A: We at Reliance Autozone are a brand-neutral auto retail chain, which means owners of all makes of vehicles, be it a car or a two-wheeler, can enjoy our services and get genuine automobile products and accessories.
Firstly, we provide basic and specialised services, primarily those that are required on regular basis. Tyre alignment and balancing, for instance, is required at regular intervals. In addition, we also provide some specialised services. If one wants to incorporate power windows in some base models of cars, we will get the best possible equipment fixed in the car.
Authorised dealers do not provide such services and equipment, and if some of them do, they cannot match our prices.
Other than at the Autozone, some products like tyres, batteries and other accessories are also available at other formats from Reliance. Dedicated spaces have been set up in select Reliance Mart and Reliance Fresh outlets to retail automobile products, giving us a wider reach.
Q: So, specialised services and basic products are on offer at Autozone. What if any of your loyal customers has a major problem with the engine or the car needs major repair after an accident? How will you manage that?
A: Just as there are nursing homes for small ailments and hospitals for major operations, we are a nursing home for cars and aspiring to be a hospital. We do know what the good hospitals are about, and will always recommend our loyal customer to the good ones.
For instance, as of now, we do not offer major services like engine repairs, denting and painting, or re-modelling. The main reason is that these services are very space consuming and should be located in a favourable area. Most of the company-owned service centres are located in far-off places, away from the city proper. This makes it inconvenient for the customer to take the car there for all types of repairs. As soon as we get favourable spots, we will definitely start offering such services.
BUSINESS PROPOSITION
Q: Considering the kind of products and services on offer at Autozone, it seems that the new car owner will not be attracted to come there. Should an owner of a new car, who probably has 1-2 years’ warranty, visit Autozone? If yes, why?
A: We are not here to only sell, but also to guide customers. If the required service is in the warranty period, we will certainly guide the owner to take it to the authorised service station. However, not all the products and services are covered in a warranty, and these will be taken care of for new car owners. For instance, some add-on accessories that are not available at the point of purchase of a vehicle can be obtained from us.
That said, our primary target is the customer who wants to save devaluation of the car after its warranty period is over. Generally, to avoid the high cost of visiting an authorised dealer, a vehicle owner starts going to roadside mechanics. We shall provide better services at lower cost as compared to the authorised dealer.
Q: There could have been another model to work with. For instance, Reliance could have taken authorised dealership of all major automobile makers and provided all sorts of services without voiding any warranty. Does this sound practical?
A: This is a good idea, and in some western countries, similar models are actually functional. The car retailer need not be the service provider, and this part is left to the specialised workshops that provide all kinds of services for vehicles of all makes.
The conflict arises when the brand wants to boasts of the kind of services it provides, claiming these to be better than those provided by his competitor in the market. After-sales service is a selling proposition in itself. Hence, it becomes difficult to arrive at an agreement with all brands and service their vehicles under one roof. For instance, if you are a Toyota franchisee, Honda will not give you his dealership.
Q: How well-experienced are the engineers at Autozone? Do you provide in-house training?
A: Each staff member at Autozone is well qualified for the job assigned. Automobile engineers, for instance, have years of industry experience, and we make sure we know their capabilities before assigning them any job.
Looking at our expansion plans, we will require a big number of trained professionals. So, we shall institute programmes to train the staff whereby somebody handling an average job can probably graduate to do an expert job.
CUSTOMER LOYALTY AND COMMUNICATION
Q: Service providers take years to build brand loyalty. How will Reliance Autozone do that? What will be your medium of communication?
A: Although Reliance in itself is a credible brand name, every format from its retail arm will have to have its own identity. We keep record of our every customer through SAP R/3. Through this system we can track a customer’s vehicle ownership life cycle, while the customised CRM system will help us in scheduling of customer service activities.
Secondly, we have a system of sharing customer database. For instance, a Reliance Fresh or a Reliance Mart loyalist will be able to receive information on offerings at Reliance Autozone as well.
PLANS
Q: What else is due from Reliance Autozone in future?
A: We are already into sales and purchase of pre-owned vehicles, and will soon get into retailing of two-wheelers as well. The company has already obtained authorisation of selling electric scooters. Similar tie-ups are likely to happen in the future to offer multi-brand choices under one roof.
Various other formats of Autozone will also come up soon. While the small formats will offer limited services and products, large-format stores with comprehensive services will also be opened soon.
