THE WOODLANDS, Texas (June 13, 2000) — It ain´t your average, everyday "Joe."
Practically every day it seems some company brags that it plans to "revolutionize" the (fill in the appropriate name) industry. Leading that charge are the so-called Internet-based "dot coms."
Depite its name, JoeAuto.com may be a little different because it is a bricks-and-mortar company that is in the initial stages of launching a widespread plan to transform how consumers procure automotive service.
Today, visit the shop in person. In the future? Let Joe do it all.
Based in The Woodlands, a suburb north of Houston, JoeAuto.com uses the tag line, "Invented to not waste your time." It´s using the Internet—hence its dot com name—to make vehicle service more convenient.
Last February, the company opened its first "prototype" shop, a seven-bay affair in Phoenix, and an eight-bay one in the Houston suburb of Tomball in April. The shops repair and service vehicles 24 hours a day, seven days a week.
"We think the customer doesn´t want their day interrupted," said Rick Davis, CEO of CCG Venture Partners, the investment firm behind the JoeAuto.com concept.
Forays into service scheduling on the Internet are increasingly popular. More car dealers and independent service-oriented Web sites—such as myautogarage.com, icarumba.com and greatmechanics.com—offer consumers scheduling options and advice on where to take a car for repair.
Evolution under way
Citing a 1997 USA Today survey that rated auto repair as the "biggest headache" among the paper´s readers, JoeAuto.com set out to "change the game" in the auto service industry. How? According to its Web site, by improving the auto repair experience that has "frustrated" many people—``exactly the kind of customer `pain´ that we see as an opportunity."
The first step toward change, it continued, was to go to customers and listen to their needs. "At JoeAuto.com we have spent the last two years asking customers what they want in an auto repair experience. Overwhelmingly, the answer came down to just two things: 1) Trust; 2) Convenience."
Both are implicit goals of the company, which offers service in the following ways:
A consumer visits the company´s Web site and schedules an appointment. From there, after confirming a convenient time for repairs, JoeAuto.com handles everything else.
If the customers choose, they can leave their vehicles at a JoeAuto.com garage. Or they can arrange to have their vehicles picked up and returned, with a loaner provided for $5 an hour or $25 a day.
JoeAuto.com garages have Web cameras. At any time, consumers can visit the Web site and see real-time images of their vehicles being repaired—assuming they´re in a bay. Customers also can use the site to set up a vehicle "profile" and diagnose what might be wrong with their cars.
On an Internet "virtual tour" of a JoeAuto.com shop, the company´s Web site shows a photo of the service counter, boasting: "As you enter the front door...you are once again reminded that this is not a typical auto garage. Remember, since you never have to come into our facility personally, this may be your only chance to see how clean and fresh our lobby is."
In one corner of the showroom, shown on the Web site, is a "customer information center" that´s provided "to remind you of all the features that were invented for your convenience."
Each JoeAuto.com shop has a "comfortable waiting area" that includes a customer activity center—a computer with Internet access provided exclusively for the use of customers; a TV with DSS satellite reception; and beverages.
Visitors to the actual service area are invited to take a shop tour. "You won´t find any of the annoying signs that tell you that our `insurance company´ prohibits you from seeing our service bays," the company says. "We have nothing to hide, and we invite you to see for yourself how modern and well equipped our facility is."
As repairs continue, JoeAuto periodically provides customers with e-mail updates on the progress, and notifies them when the vehicle will be completed and ready to be picked up or delivered.
Vehicles in the garage by 7 p.m. are worked on overnight and can be delivered to the customer by 7 the next morning.
JoeAuto´s strategy is to provide pricing below that of car dealers, CCG´s Mr. Davis said, and comparable to other "well-run independent shops."
What the company is moving toward, he added, is a way for a consumer to get automotive service fulfilled "by turning to your keyboard´´—that is, online, the way he said he buys all his books.
He pointed out to Tire Business that although the company´s prototypes are "labs where we continually tweak the concept," JoeAuto.coms of the future will actually be 30- to 40-bay "supercenters."
"They will be remote—in other words, will not be visible. They´ll be on cheap real estate off the beaten track."
Ultimately, business will be transacted 100 percent via the Internet.
And JoeAuto "absolutely" has plans to go nationwide, he said. "We think we´ll be virtually everyplace within five years."
According to company research, he noted, "believe it or not, if we go into the top 100 cities, we have accessed 70 percent of the vehicles in America."
CCG has, in fact, rolled out what he called other "big-city business concepts" in locations including Houston, Chicago, Los Angeles, Atlanta, New York and Washington, D.C.
Those ventures include a firm formerly called "Night Rider," which grew to become, in the late 1980s and early ´90s, the fourth-largest document services company in the U.S., he said, serving the legal and corporate worlds. It eventually was acquired and is now called Ikon Document Services.
Those same cities and others are ripe for JoeAuto, he believes.
The company is in what Mr. Davis deemed "Evolution 1," where a customer can access auto service by phone, the Internet or by driving to a JoeAuto store, typically located on roads that average 35,000 vehicles per day.
"Evolution 2," which CCG plans to launch early next year, will consist of the supercenters located not on "retail streets" but rather on major highways that see traffic counts of half a million vehicles daily.
The ultimate "Evolution 4´´—which he predicted the company will reach within about three years—will be much like online bookseller Amazon.com: At that point, most consumers will do business with JoeAuto via the Net.
Because the two existing JoeAuto locations are in the early stages of startup, current sales figures could not be provided. However, "We plan to take $25 million of revenue out of each market we´ll be in," Mr. Davis added. "So if we´re planning to go to 100 markets, we´re looking at a $1 billion to $2 billion a year company."
When the nationwide rollout starts, Mr. Davis and three other company executives will simultaneously launch JoeAuto.coms in the western, central and eastern regions of the U.S.
"We´re planning on opening 28 new locations a year over the next five years," said Randy Vanstory, JoeAuto´s co-founder and vice president of business development.
Thus far, Mr. Davis and his venture capital team have invested $6 million in the operation. But he said the company is currently evaluating other possible financial partners and is considering a public stock offering in 2001.
Two partnering groups he´s willing to consider are what he called "big-time automotive players" and "Tier 1 venture capitalists."
As for other competitors—including large auto service retailers, car dealers and, yes, even independent tire dealerships?
"We´re their worst nightmare," he predicted. "You wait and see."
Some information in this report was contributed by Gabe Fajuri, Crain News Service.