Source: www.searchautoparts.com, May 2020
While some industries continue to decline in light of the COVID-19 pandemic, collision industry insiders are predicting that the need to get out and away will drive business back to normal by summer.
Four industry experts — Mike Anderson, Collision Advice; Kristen Felder, Collision Hub; Ryan Marrinan, 3M applications engineer; and Scott Peirce, 3M account manager — gathered on a 3M-hosted webinar to discuss the emerging trends, the COVID-19 impact and predictions on what it will mean for the industry going forward.
Shop trends
Anderson said frustration is everywhere not only from the unknown, but also in working to get PPP loans to keep their businesses up and running.
Felder said a much bigger light is being shone on business management. “In the past, cars got wrecked and they would show up at your door, and for many businesses, they really ran themselves,” she said. “But businesses now are having to think about their management strategy, decisions made and profitability.”
Many are taking this time to improve employee development and build the family environment at the shop.
Anderson said he could “count on two hands” the number of shops he has heard of having to close down, but of those impacted, the largest group seems to be the 5-7 store MSOs. “I think a lot of shops are making it through this. They have a sweet spot doing $250,000-$400,000 in business a month. Those doing $1 million a month are the ones this has hit the hardest,” he said. They have a larger overhead including rent and salaries, and it is harder to get by than for those with fewer expenses.
Anecdotally, he has seen a higher uptick in New York shops closing than in other areas of the country. “Employees don’t want to come to work. They made a conscious decision. It wasn’t that they didn’t have the work or couldn’t get parts. They just made the decision that they didn’t want to play around,” Anderson said.
A very large and reputable shop in the St. Paul area closed down after a technician showed symptoms of COVID-19. “Their concern was for their employees’ safety. They brought in cleaning crews to disinfect the entire facility,” Marrinan said. Despite having a backlog of work, they reached out to customers to communicate their priorities and when the reopened, they put in place new PPE, disinfection requirements and no-touch policies for the safety of both their employees and customers.
Business plans also remain a major indicator of what shops can whether the storm, Felder said. “There are businesses with solid business plans focused on the customer, and those businesses will be OK. And then there are those who had business plans focused on volume. And when the volume is gone, the revenue is gone,” she said. “There were some exposed weaknesses in our industry and it gives us an opportunity to reinvent some things.”
Miles driven
The entire panel anticipates miles driven will ramp up quickly in the coming months.
“Coming out of this, people are going to want to travel and go to work. We’ve seen a correlation with miles driven and accident rates for a long time, so as miles driven increases, accidents are going to increase and that will be good for collision repairers,” Peirce said.
Felder and Anderson also predict a decline in ride sharing service business.
“People are going to want to get out there are start driving. They are going to avoid ride sharing and public transportation,” Anderson said. “We are going to see more local vacations, which means more miles traveled. There is currently more telecommuting, but then people who are on the road drive faster, so there are more accidents.”
Anderson warns that when “the dam breaks” and miles driven ramp up, shops need to be trained, efficient and prepared. All agreed that shop traffic will be back to normal by summertime.
Technology impacts
COVID-19 has shown a strong spotlight on the importance of utilizing and adapting to new technology to stay efficient. Anderson predicts shops with a younger workface may fare better going forward, as they are most likely more tech savvy.
Shops have been forced to adjust to a host of new technology elements, including online appointment scheduling, virtual inspections, touchless signatures and many more. “Shops that were fat on the administration or technician side may learn they can do the same with less people. We have to get smarter about we do and the advancement of technology will be a good thing for us when we look back in 18 months,” Anderson said.
He also predicts a whole new insurance process where photo estimating will be old news and virtual inspections will be rolling out and there will be less micromanagement across the board.
Marrinan also sees growth in how technicians use social media. “Techs work on the fly. This is an opportunity for them to utilize technology, social media and other outlets to better their knowledge and skills levels,” he said. “Figure out how to implement technology into your workflow now because it is going to keep growing.”
“Technicians who take advantage of technology and aren’t afraid to ask questions will be more valuable going forward,” Marrinan said.
