From the Magazine: The return of the commute
Will the service business boom as more Canadians start driving for work?
Work from home is dead. Long live work from home.
The above statement is of course an exaggeration. Even in 2024, many of us are still managing our business meetings in pajamas.
But recent data from Statistics Canada shows that more Canadians are commuting this year. About 16.5 million people headed to work by mid-year, up 3.7 per cent for the same period in 2023. This number has been steadily increasing since the post-pandemic lows of 2020 and 2021.
Currently, only about one in five Canadians are mostly working from home. The number is still higher than 2016, when less than one in 10 Canadians were staying put, but significantly lower than 2021.
More significantly, commute times are back up across most major cities, close to levels comparable to 2016. The national average for the first half of the year was 26.4 minutes — primarily driven by commutes made in a car or a truck. The stats also show that longer commutes (one hour or more) are on the rise as well.
Overall, every number points to a significant increase in vehicle kilometres travelled — the strongest indicator of the health of the automotive aftermarket. As more companies mandate return to work, or at least more days in the office, the trend will only continue to grow.
Will drivers delay or abandon their regular maintenance activities? Faced with an emergency repair, will they choose to work from home for more days, look at alternative means of transport and defer the repair?
This shift holds the usual benefits for the aftermarket. More vehicles and longer commutes directly equal to wear/tear, regular and preventative maintenance, towing services and so on. But there are a few things to consider for success in the post-pandemic reality. Also, despite more mileage, there might be confounding factors that may keep demand more depressed than normal.
The Canadian economy poses the biggest threat. Financial hardship generally equates to reduction in vehicle kilometres travelled, but currently we find ourselves in a strange situation. Unemployment rates are high and consumer spending is low, but people are driving more.
Will drivers delay or abandon their regular maintenance activities? Faced with an emergency repair, will they choose to work from home for more days, look at alternative means of transport and defer the repair? Whatever the outcome might be, it is possible that the continuing economic climate may dampen the expected service boom.
I think there will still be enough dollars to go around but part stores and service shops might have to get a little creative to attract more customers. Here are some strategies to stand out from the rest:
Offer time-based discounts
Hybrid work is here to stay, which means most office workers spend at least two to three days per week in their home office. These customers may have the flexibility to get repair or maintenance work done on a regular day during regular hours and not necessarily wait for after-hours or on the weekends.
Service shops can attract these vehicle owners with middle-of-the-week deals (think “a buck a shuck” oysters or “happy hour” drinks offered by many restaurants and bars on weeknights). These discounts will be attractive to a majority of Canadian households currently as they still try to balance higher mortgage payments and cost of living increases.
Explore in-commute promotions
In-vehicle advertising is an emerging area. If you have used navigation apps such as Waze, you may have seen fast food or gasoline ads pop up when in active use. As drivers spend more time commuting, there might be opportunities to promote maintenance specials, winter tire packages and comfort/convenience accessories right on to the car dashboard or attached smartphone.
The market is still nascent, especially in Canada and maybe out of reach for smaller shops in the short-term in both access and cost. But regional and national service chains and part stores may want to explore this opportunity to get a head start.
Invest in customer loyalty programs
Service-facing organizations almost always have a loyalty program, but smaller businesses have a harder time rewarding repeat customers. In times of economic hardship when customers are looking for the best bargain, it is especially important for shops to at least have the opportunity to offer them the best possible deal.
Without a way to connect with customers on a regular basis, such chances may get lost. There are plenty of affordable solutions such as Montreal-based Kangaroo and London, Ontario-based DataCandy, to name a few, that can manage customer loyalty for local shops through digital interfaces. When deployed in tandem with e-commerce solutions such as Shopify, they can become powerful tools to track customers and ensure they come back to your shop or store.
Kumar Saha is vice president (U.S.)/managing director (Canada) of global automotive data firm Eucon. He has been advising the North American automotive industry for over a decade and is a frequent conference speaker and media commentator. He is based out of Toronto.
This article originally appeared in the November issue of Jobber News
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