- Parts Town’s new market will help it expand into other verticals, such as HVAC, housekeeping, water filtration, technician supplies, and home appliances.
- The Red Lightning Group division of Parts Town – responsible for creating the Marketplace – formed in 2020 to accelerate its innovation efforts both internally and for its customers.
- Marketplace is available on the Parts Town website as well as the company’s mobile app and integrates Mirakl’s technology and its hybrid ERP.
The Parts Town market platform is in full swing with the official launch of its ecommerce marketplace in September, but the work under the hood began in 2019 when it laid out its market strategy.
The new e-commerce platform, accessible on the Parts Town mobile app and at partstown.com/marketplace, offers customers a one-stop shopping experience for its OEM catering spare parts as well as products in a variety new categories. Instead of logging into multiple websites to find parts and equipment or hopping in the car to do local pickups, customers now have access to Parts Town sellers who will ship their products directly to them through Marketplace.
Parts Town, based in Addison, Ill., Began expanding its investment in the market concept two years ago with the launch of a physical market initiative, Parts In Town, which enables local parts to be picked up. in one hour from independent service companies. Marketplace is an online extension of Parts In Town. However, Parts In Town and Marketplace sellers are different: the former are local, the latter can be anywhere.
Red Lightning Group, a division of Parts Town launched last year to accelerate innovation in the restaurant industry and other verticals, has developed Marketplace. Marketplace is built using Mirakl’s cloud-based e-commerce software platform, but strategy, development, vendor acquisition and other elements are handled by an internal team, according to Emanuela. Delgado, senior vice president and general manager of Red Lightning Group. . To create Marketplace, Mirakl’s technology integrated with Parts Town’s hybrid ERP and Parts Town’s existing e-commerce site.
In addition to parts and catering products, Marketplace will also carry parts and other related products from adjacent market sectors including HVAC, housekeeping, water filtration, technician supplies and appliances. residential. Marketplace currently includes over 23,000 pieces of home appliances from brands such as Whirlpool and Frigidaire, as well as 6,000 janitorial and sanitation products.
Founded in 1987, Parts Town prides itself on providing genuine OEM parts to our customers and a track record of innovating in the B2B distributor arena. The two goals of Parts Town with Marketplace are to improve the supply chain and increase sales of genuine OEM parts. As one of its first eight employees, Delgado has witnessed the growth in Parts Town’s hockey stick revenue over the years, from around $ 3 million per year when it was first established as distributor of restaurant equipment parts to local service companies now over $ 1 billion.
While Red Lightning Group was initially made up of internal Parts Town employees, Delgado said it plans to expand its workforce to 17 employees by bringing in outside talent from other industries, such as B2C, to help. to stimulate innovation. “Parts Town has always been about growth, innovation and technology,” says Delgado. “However, what we decided to do is create a new division so that we can have a team of people who are focused only on that so that we can go faster.”
The growing team is responsible for the strategy, development, vendor acquisition and other elements of Marketplace development, according to Delgado. “Sellers will be able to add their products, offerings or inventory to the Mirakl platform in a number of different ways,” explains Delgado. “It will offer items that are available in stock, and a price will appear on our sites.
“When an order is placed, that order is sent directly to the seller, who can either manually access Mirakl to fulfill that order, or create an API in their system. Mirakl controls a lot of the operations on the seller side to get this order and fulfill it.
Nuts and bolts
While some B2B distributors have moved to Amazon-style marketplaces that feature multiple seller product offerings as a means of attracting new customers, this was not the founding motivation for Parts Town.
Delgado says the Parts Town market is a result of its customers’ demands to enter new verticals, such as HVAC, janitorial, water filtration, technician supplies and home appliances. For new verticals, Parts Town and Red Lightning Group provide the infrastructure and know-how to adjacent vendors of its parts and basic foodservice products.
One of the concerns of a distributor setting up their own ecommerce marketplace is that they put the prices in the hands of the sellers, which can lead to lower prices. This is not the case for Parts Town, as sellers set their own prices which end up falling within a range.
For Parts Town’s Marketplace, Mirakl also manages the commission rates between Parts Town and its sellers, as well as the categorization of the products offered. Marketplace is also a way to provide sellers and B2B customers with digital tools and e-commerce capabilities without building and developing them themselves.
A tool for other B2B companies
Marketplace “allows us to be more specialized and to differentiate ourselves by trying to help B2B customers get the parts they need,” says Delgado. “Today, many B2B companies are looking for ways to get involved in digital. Many of them don’t have business sites or digital strategies.
Providing the digital infrastructure and tools for the e-commerce market is half the battle, according to Delgado. “We can be a tool for other B2B companies trying to enter the digital space with very little investment and risk,” she says. “The most expensive part is driving this traffic.
“We have the customers. That’s why we focus on the products that our existing customers use. We also have the expertise to drive traffic and our e-commerce and app capabilities. “
To the (physical) market
Interestingly, it was the Parts In Town brick and mortar initiative that served as a phased approach for the e-commerce market. Conceptualized in 2019, Parts In Town allows one-hour local pickup of parts from independent service companies. Instead of Parts Town opening its own branches across its territory, it uses Parts In Town as an extension of its branch network by partnering with sellers who already have local inventory.
“We had a smooth launch in early January 2020,” says Delgado. “We started with only a handful of salespeople because we wanted to learn and refine, and then the pandemic hit. By the end of the year we had a few dozen sellers, and now we’re down to 88 for the Parts In Town model.
While Parts Town has over $ 150 million in inventory for its major customers, Parts In Town locations typically offer the most critical parts for customer operations.
“It was the marketplace’s first use case, and it was to meet a very specific industry need; pick up the parts within an hour on the same day, ”says Delgado. “It also helps our service partners. As an example, we were able to get data from many of our partners and found that 87% of the customers who placed an order for Parts In Town were net new customers for that service company.
“While they can turn some of those customers who come for their share into a potential service opportunity in the future, it’s a lead generation tool for them as well. “
History of innovation
As part of its legacy of innovation, Parts Town launched PartSPIN in 2013. PartSPIN is a 360-degree imaging technology that is equipped with technical diagrams, “smart manuals” and a mobile app to help customers. find and consult equipment manuals and parts when in the field.
“We were the first to create an e-commerce site for our industry,” says Delgado. “We created an app and launched an app in 2010, which was very advanced compared to others in the B2B space.
“We also have this OEM to OCM tool that helps provide advice to customers looking for parts and making sure they are genuine OEM parts. “
In August, Parts Town announced that it had developed a new tool with Davisware that integrates and streamlines the entire parts purchasing process. The tool, called PartsPath, is designed to save service providers a lot of time and money.
PartsPath enables users to automate POs, acknowledgments, and AP invoices in three steps without leaving their Davisware on-site service management software.
“Davisware is an operating system used by many service companies in our industry,” says Delgado. “It also serves part of the HVAC industry. This is something that is really going to help make things easier for existing customers who are on the Davisware platform, but also new customers on Davisware or new customers at Parts Town. This will also help with expansion in the CVC.
On the bridge to the market
As part of its Marketplace strategy, last year Parts Town hired Martin Rohde as President of Parts Town International. Rohde was previously Managing Director of Business Customers for Amazon Business, and he also stopped off in e-commerce at Hewlett Packard Enterprises.
“This is the other big advantage of markets, they can be a tool for some of the other initiatives that we have, and they will definitely be a tool for our international expansion,” says Delgado. “For next year, or the next 18 months, a lot of what we’re focusing on is expanding our Marketplace strategy with things like adding more product categories, adding services and also additional features.
Additional functionality could include the ability for customers to request higher quantities or add different products. While Delgado couldn’t be more specific on Parts Town’s roadmap, innovation will always be at the heart of these efforts.
“We demand of ourselves to keep innovating for our industry,” she says. “We don’t innovate just to innovate. We’re not just looking for the latest news.
“We innovate and build technologies to help solve problems or to help our customers and our industry be more efficient. It’s something we’ve always done and will continue to do, but we can accelerate it even further with the dedicated Red Lightning Group.